STOCK PARAMETER

WHAT IS STOCK PARAMETER ?

WHY DO WE NEED THESE PARAMETER?

An investor need to know everthing about the company he/she is going to invest.while investing one need to be aware about the risk involved in investing a particular equity stock.Not only that the investors are very keen about the 'Return On Investment'. (ROI).

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The ROI is the main purpose of any investments. Each investor is really keen on their investment safety first, and make sure it is going to the right hand that tend to appreciate day by day,year after years. The money once invested in a particular stock, we may not have control over our money. Hence, the money is handled by other people through various means.So the investor need to throughly analyse before investing.

Health Check Up- Anlysing a stock like a Doctor who does a complete health check up of the patient like- Blood pressure,Sugar Level and Heart Beat/Pulse Etc.

Here the investors must check up/make sure the pulse of the company before investing,through the company past performance's and so on. This will safe guard the investments they are going to Make.

Here ' STOCK PARAMETER ' will serve this purpose very effectively.

Here the parameters that help the investors are...

Face Value (F.V.)

The nominal value of scrip stated by the issuer.
Like Re.1.00,Rs.2.00 and Rs.5.00 Etc.Look out stocks equity to gain more dividend and bonus shares.

Book Value (B.V.)

Book Value is the net worth (Equity Capital plus reserves and surplus) divided by the number of shares outstanding.

Market Price (M.P.)

The current market price of the security traded on NSE/BSE. The market price is often vary time to time according to the trend of the market.

The investor really need to wait for the right price/buy at low in the market as low as one can.This need some skills of market trend UP/DOWN.

Market Capitalization (M.Cap.)

It is defined as the value of corporation as determined by the market price of its issued and outstanding common stock. It is arrived by multiplying the closing prices of shares with fully diluted equity capital.

Volume

The average quantity of shares transacted over a period of 15-Days on BSE and NSE.The heavy volumes may indicates the demand.

52 weeks High/Lows

The 52 weeks High /Lows represents the highest and the lowest point attained by a share during the immediately preceding 52 weeks.

Price to 52 Week High/Lows

It has been arrived by dividing the current market price of the stock by 52 Week High/Low. It indicates how the stock has performed over the period of 52 Weeks. To interpretate P52WH, the lower the ratio, the more unattractive the stock. Similarly, the higher ratio for ratio for P52WL, the more attractive the stock.

Earning per share (EPS)

EPS is net profit calculated on a trailing 12 months basis (Aggregate net profit of four consecutive quarters ) divided by fully diluted equity capital

Price to Earning Ratio (P/E)

It has been arrived at by dividing the day's closing price of a script by its earning per share (ESP).when you see a high P/E Ratio share it is mant time give low return in the near future.

when a stock seems 'strong ' by using the other parameters One need to also look out the LOW P/E Ratio, so that the chances are there for the future P/E yield will be high.

Promoters Stake

It is the percentage share holding of promoters in the equity capital. It includes government's holding in case of public sector undertaking .

a. if, the Govt/Public Sector investment is strong,this indicates the company creditibility/strength.

b. if, the promoters holding is storng ,it is a good symptom for investors. for e.g.- DLF percentage of promoters holding is very strong.

Beta

Beta is the shares sensitivity to market movement. It indicates how much the scrip move for a unit change in the market scrip. Beta could be positive or negative.

A negative beta -indicates that the share moves in a direction opposite to the market. The beta of the index is 1. A higher beta indicates the stock's movements are sharper than that of the market index.

Stock return

Stock return tells about how much return a particular stock has given over the past 1-month,

3- months and 1-year.

Equity

It is defined as the latest subscribed equity capital.

Networth

Networth determines the value of the company. It is calculated as the difference between total asset and total liabilities. It is composed of primarily of all the money that has been invested since its inception, as well as the retained earning for the duration of its operation.

Book Closure

A company closes its register of member for updating the records to facilitate payment of dividends or issue of rights of bonus shares.

Book closure is the period during which this process is done and deliveries are not effected in the clearing house.

Dividend

Dividend is defined as the distribution of a portion of a company's earnings, decided by the board of directors, to its shareholders.

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Dividend is a boon for long term investors.In many countries the divident is 100% Tax free.So the investor can invest for a long term and enjoy the tax benefits and also enjoy 'ROI' on yearly basis apart from the regular ROI.

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Also see the post who will decide the dividend?..in this same blog.

Link>http://wealthtrainer.blogspot.com/2010/10/what-are-dividends-and-when-theyre.html