Questions tagged [stock-analysis]

For questions related to the analysis of stock prices, stock markets, etc.

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173
votes
21answers
68k views

If a stock doesn't pay dividends, then why is the stock worth anything?

I read somewhere that companies are not required to pay dividends to shareholders (this is correct, yes?). If so, then if company A never pays dividends to its shareholders, then what is the point ...
41
votes
9answers
20k views

Why do people buy stocks that pay no dividend?

Before recently, Apple Inc. did not give dividend to shareholders. This makes me curious why people buy Apple Inc. stocks; while it might be due to the expectation of selling stocks at a higher price,...
20
votes
3answers
2k views

If low-cost index funds are considered the best investment, why are there so many high-cost, managed funds?

The general consensus is that the single best indicator of a fund's future performance is the its expense ratio (source). If you look for more than 5 minutes online you discover the Bogleheads ...
13
votes
4answers
46k views

What does “more buyers than sellers” in technical analysis of stocks actually mean?

I often hear/read technical analysts looking at volume and price action on a chart and claiming that there are "more buyers than sellers" or vice versa. Since every trade requires a buyer and a ...
3
votes
5answers
26k views

Why does selling and then rebuying stock not lead to free money?

From what I understand, stock prices go down when large amounts of the stock are sold (thereby lowering the price to attract buyers), and go up when large amounts are bought (vice versa - buyers rise ...
61
votes
7answers
472k views

Can I trust the Motley Fool?

A while back I checked out The Motley Fool while doing some research on mutual funds. I found their educational content to be a great overview of what to look for and started exploring. While The ...
10
votes
5answers
6k views

What are the implications of a corporate stock repurchase or share buyback program?

Zynga's board recently announced their authorization of repurchasing up to $200M shares of Class A stock. What are the implications when a company repurchases their own stock? Some specific questions:...
4
votes
1answer
473 views

Why do passive ETFs require so much trading (and incur costs)?

As far as I've understood, the idea of passive ETFs is to track an index. Typically, the index is a value-weighted stock market index, such as the S&P500. Now, if I'm not mistaken, tracking a ...
6
votes
1answer
9k views

What does negative Total Equity mean in McDonald's balance sheet?

What does negative Total Equity mean in McDonald's balance sheet? Please refer to https://finance.google.com/finance?q=NYSE%3AMCD&fstype=ii&ei=3ZDCWaDdFcyauATPnb6wBg For "Total Equity" row, ...
4
votes
1answer
4k views

Better way to calculate earning growth rate to have quick glance on company earning quality

I was wondering, what is a better way, to calculate earning growth rate, to have a quick glance on company earning quality? In ycharts, according to https://ycharts.com/glossary/terms/eps_growth , ...
55
votes
9answers
17k views

Is it true that, “just ten trading days represent 63 per cent of the returns of the past 50 years”?

I have fallen down a Wikipedia rabbit hole and landed on the page titled Seven States of Randomness. I can't explain in a single sentence what it is talking about, but my question is about an odd ...
29
votes
5answers
18k views

If I have $1000 to invest in penny stocks online, should I diversify risk and invest in many of them or should I invest in just in one?

I have $1000 to invest. I use Scottrade to invest in penny stocks online, they charge $7 to buy a stock and another $7 to sell it ($14 in total). Given the high volatility of these stocks, what tactic ...
23
votes
5answers
19k views

Why don't SPY, SPX, and the e-mini s&p 500 track perfectly with each other?

These tickers (SPY, SPX, /ES) are all based off the S&P 500 yet the relative lows and highs diverge. Can someone provide a basic explanation what causes this to happen? I feel like it may stem ...
49
votes
2answers
14k views

Why did Tesla's stock value drop by 40 USD for just 5 minutes on August 2nd at 3:20pm?

Google Finance reports that Tesla's stock value dropped by 40 USD for 5 minutes on August 2nd, 2018 at 3:20pm What caused such a drop in stock value in the span of 10 minutes?
6
votes
2answers
51k views

Will a company's stock price be affected when warrants are issued, or exercised?

A company has 500 million outstanding shares, and it issued 100 million warrants 10 years ago. Assume that none of the warrants has been exercised yet. If tomorrow all the holders exercised their ...
8
votes
4answers
2k views

How can I remove the movement of the stock market as a whole from the movement in price of an individual share?

I think it would be useful to have a chart that shows how much a specific share out- or under-performs the composite index, e.g. Apple compared to the Nasdaq-100. I think (though I may be naive about ...
4
votes
3answers
2k views

Why would analysts recommend buying companies with negative net income?

Can anyone explain why some analysts recommend companies in the biopharmacy sector as a "buy" even though they have high R&D costs and no real profit? I followed three companies and I see the ...
2
votes
1answer
1k views

Gauge the strength of the resistance level of a stock just using EMA

Say I calculate the 200-day EMA of a stock to be $25. The stock currently trades at $22. I see from the historical price action that it has touched $25 and failed to break it two times in the past 4 ...
2
votes
2answers
9k views

How do I calculate the quarterly returns of a stock index?

I was reading an article and it stated something along the lines of (not accurate figures): Quarter | Stock Index % Change In Quarter Sep 2011 | 5.21 Dec 2011 | 4.69 Mar 2012 | 3.20 June 2012 | -...
1
vote
2answers
1k views

How can US stocks change so much without any new company activity?

I follow the market every day. It is rushing to recover losses over the last few weeks. However, stock prices are not mirroring the actual activity of the companies, only because liquidity in ...
11
votes
2answers
2k views

How can this stock have an intra-day range of more than 90% on 24Aug2015?

I am looking at this stock BKCC and was shocked at one point at its price of only $0.97. Just within 1 hour of opening, BKCC traded between $0.97 and $9.5. How can this be so, particularly when it is ...
9
votes
3answers
4k views

Are the stocks of competitor companies negatively correlated?

Are the stocks of competitor companies negatively correlated? e.g. if Sony goes up in price, will Samsung fall?
6
votes
5answers
3k views

What could cause a stock to trade below book value?

A company's book value is the worth of all their assets. What would cause a stock to trade below book value?
5
votes
1answer
415 views

Bids and asks in case of market order

Suppose that person A places buy market order with quantity 1000 of firm XYZ. Now in the market there only are various asks of quantity: quantity 100, quantity 2000, quantity 1000. Each ask has ...
3
votes
3answers
1k views

Idea for getting rich using computers to track stocks

Hallo, I have been toying with this idea in my mind for a while now and to me it sounds like a fool proof way of getting 'rich'. I'm sure someone has had the same idea as me, maybe even tried it, and ...
2
votes
1answer
4k views

Why bid and ask do not match the price at which the stock is being traded [duplicate]

For a particular stock, the stats look something like this: Price: 54.55 $ Bid: 54.54 $ Ask: 54.55 $ Now if I place a market order, will it get executed at the Price (54.55 $)? My guess is yes. Now ...
2
votes
3answers
1k views

Which kind of investment seems feasible to have more cashflow every week or month?

My plan is to make close to $2000 a month/$500 a week through investments. For that, I can risk up to $2000 to start with. The following come in to my mind, even if nothing is for sure. 1) If I ...
2
votes
2answers
2k views

Understanding a Trailing Limit if Touched Order

I"m trying to wrap my head around a Trailing Limit if Touched Order that is offered by Interactive Brokers. The order explanation is at Trailing Limit if Touched. What I'm trying to figure out is ...
0
votes
1answer
947 views

Calculating Exponential Moving Average

I looked up EMA on wikipedia, but I could not understand the explanation. Can anyone break it down with an example ?
0
votes
1answer
84 views

How you make decision on a stock purchase after fundamental analysis? [closed]

I am new to investing and just started practising on a simulator. I wrote a program on Matlab and to analyse various fundamental aspects of a company. These are the aspects computed my program, A. ...