Important Stock Investing Ratios
What is the definition of % Price Chg 6m?
This measures the absolute percentage performance of the share price over the past six months.
It is calculated as (Current Price minus Old Price) divided by Old Price x 100.
It is to be contrasted with Relative Strength where the percentage change is calculated and compared to the market or some other standard index.
Along with Dividends, the absolute price performance is the other key component to determining Total Shareholder Return.
What is the definition of % Price Chg 3m?
This measures the absolute percentage performance of the share price over the past three months.
It is to be contrasted with Relative Strength where the percentage change is calculated and compared to the market or some other standard index.
Along with Dividends, the absolute price performance is the other key component to determining Total Shareholder Return.
What is the definition of EPS Gwth %?
The Growth in Earnings per share as a percentage change over the last trailing twelve month period. Earnings-per-share growth gives a good picture of the rate at which a company has grown its profitability.
One of the important differences vs. net-income growth rates is that EPS growth reflects the dilution that occurs from new stock issuance, the exercise of employee stock options, warrants, convertible securities, and share repurchases.
Stocks with higher earnings-per-share growth rates are generally more desired by investors than those with slower earnings-per-share growth rates, though in general high growth rates have a tendency to revert over the longer term to more stable growth rates.
What is the definition of Sales ?m?
This is sales over the last 12 months, translated in Pounds Sterling for all companies.
The sales figure gives a sense for the scale of a company, although companies can have very different profit margins depending on the industry and state of the business, so this may not bear much relation to the earnings figure. Some however argue for the importance of sales, since sales figures are less easy to manipulate than either earnings or book value.
What is the definition of Shares Out?
The total number of Shares that have been authorized/issued by the company, and purchased by investors. They have voting rights and represent ownership in the corporation by the person or institution that holds the shares. They should be distinguished from treasury stock, which is held by the company.
Shares outstanding can be calculated as either basic or fully diluted. The fully diluted shares outstanding count includes diluting securities as options, warrants or convertibles.
What is the definition of OCF PS ??
Operating cash flow - or cash flow from operating activities - refers to the amount of cash a company generates from the revenues it brings in, excluding costs associated with long-term capital investment. It is similar to operating profit but excluding non-cash items and accruals.
Operating cash differs from free cash flow by excluding the effect of investment activities but it does include payments for taxes or interest as well as changes in working capital (unlike EBITDA. It does not take into account any cash raised by borrowing or issuing shares (cash flow from financing). In the long-run, a business must be able to make money from its operations.
What is the definition of P/B?
The price-to-book ratio, or P/B ratio, is a financial ratio used to compare a company's book value to its current market price and is a key metric for value investors. Book value denotes the portion of the company held by the shareholders; in other words, the company's assets less its total liabilities. This is calculated as the Current Price divided by the latest annual Book Value Per Share (The inverse ratio is known as book to market). We exclude preferred shares in the calculation of Book Value.
As with most ratios, it varies a fair amount by industry (companies that require more infrastructure capital will usually trade at P/B ratios much lower than, for example, consulting firms). P/B ratios are often used to compare banks, because most assets and liabilities of banks are constantly valued at market values. This version includes intangible assets and goodwill, unlike price to tangible book value. The price / book value ratio rarely falls below 1
This is a key metric for value investors, whereas growth investors typically believe that book value reveals very little about a company's prospects for future performance.
The price / book value ratio rarely falls below 1.0. As with most ratios, it varies a fair amount by industry (companies that require more infrastructure capital will usually trade at P/B ratios much lower than, for example, consulting firms). P/B ratios are often used to compare banks, because most assets and liabilities of banks are constantly valued at market values.
A company that can't make an ROE greater than its cost of capital may be expected to have a low price to book. Therefore, look for a low PBV combined with a high ROE and low default risk.
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