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Questions tagged [stock-valuation]

For questions relating to the valuation of stocks, based on fundamental analysis, market conditions, etc.

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4answers
652 views

Does short-selling hurt companies' stock price in the long-term?

Today, I've read a Bloomberg article on latest Musk tweet tantrums, where he, among other things, mentioned this: Short-sellers are value destroyers. Should definitely be illegal. Is that ...
0
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1answer
28 views

How to count average EPS for interval of years if in this inverval was a split?

For example, I want count average EPS for 10 year for company and this company has stock split (2 to 1) in this 10 years. Do I need to take this into account calculating average EPS for this 10 ...
1
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1answer
91 views

What is “corporate drag”?

What is meant by the term corporate drag? Have seen this in some valuation analyses associated with a numerical cost value, but googling terms like "corporate drag" or "corporate drag value" do not ...
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0answers
37 views

How to quantify the cheapness (or overvaluedness) of a stock from dividend yield theory perspective?

Is there a way to quantify the potential cheapness (or overvaluedness) of a stock's price when comparing current and average dividend yield from a dividend yield theory (DYT) perspective? For example ...
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3answers
89 views

Buyback & Split

I receive stock options as part of my compensation package. The stock split a few years ago and rumor has been its about time to split again. Then the company announced a pretty big stock buyback ...
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2answers
61 views

Calculations for stock market target price?

I'm looking at various stocks on finance websites and noticed that some of them don't have a 1-year Target price. How can I calculate estimated target price of a stock myself based on the company's ...
1
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0answers
41 views

Comparing values of 5s and 7% notes

I am a beginner in investment. I was reading Security Analysis (Sixth Edition) by Benjamin Graham, and on page 63 the last paragraph is written that: A third kind of analytical conclusion may be ...
9
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5answers
935 views

Why would a company like Apple be buying back its own shares?

What is the reason that a company like AAPL is buying back its own shares? Does it have too much cash and it doesn't know what to do with it? So it is returning the cash back to investors?
155
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21answers
53k 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 ...
1
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1answer
152 views

Why is there a significant disparity between 409A valuation and fair market value?

I'm at an interesting juncture where I have the opportunity to exercise some ISOs at a startup, and I'm somewhat confused at the disparity between the two valuations. In my case, I can exercise my ...
18
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6answers
1k views

How to evaluate stocks? e.g. Whether some stock is cheap or expensive?

What kind of information do you obtain before buying (or selling) a stock? I know the PE ratio is very important, but not the only thing. Are there any rules of thumb to determine whether some stock ...
1
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5answers
180 views

Why isn't the retained earnings of a public company always distributed back to the shareholders?

Shareholders own a public company, so why shouldn't all of a company's income be distributed back to them? Why are dividends (if any) just a small fraction of a company's retained earnings?
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1answer
499 views

Why can unissued capital stock exist?

Unissued capital stock allows a company to issue shares at any given time, diluting the ownership of current shareholders. This does not seem logical nor fair. At any given time, shouldn't 100% of the ...
1
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3answers
73 views

If a company's “shareholders equity” has been increasing, why would the market value of their stock decrease?

There are companies whose "shareholders equity" in their balance sheet have been increasing due to positive earnings, but whose stock prices in the markets have dropped. Why is this happening? Isn't ...
3
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1answer
50 views

What are the ways to price a holding company?

I would like to know how people value holding companies. I guess the most famous one is Berkshire ($BRK.A - $BRK.B). And others exist. These holdings usually have a lot of exposure to realestate, PE ...
3
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1answer
81 views

P/E as market capitalization / net income

Price/earnings ratio is defined as: P/E = Share Price / Earnings per Share If we multiply both the numerator and the denominator with the number of shares, we get: P/E = Market Capitalization / ...
5
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4answers
433 views

Trying to understand Return on Capital (Joel Greenblatt's Magic Formula version)

I'm trying to understand the Return on Capital formula, as presented in Joel Greenblatt's The Little Book that Beats the Market. Return on Capital = EBIT / (Net Working Capital + Net Fixed Assets) ...
2
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2answers
5k views

What's the most correct way to calculate market cap for multi-class companies?

Yahoo finance shows GOOG as having a market cap of $492.97B, while GOOGL has a market cap of $510.18B. What's Google's total market cap? Is it really $1,003B?
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1answer
95 views

Diversification over Profits?

Everyone claims that its very important to diversify your portfolio to reduce risks and increase the possibility of long time profits. There are basically 3 industry sectors that I know rather well ...
0
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1answer
36 views

Vanguard CRSP total index versus a value and growth combination of the same index?

I am currently researching Vanguard Mid-Cap and Vanguard Small-Cap indexes. The methodology for inclusion in these indexes is outlined in the CRSP Methodology Guide. According to the guide, inclusion ...
2
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1answer
95 views

What forms (S-1, 8-K, etc) and keywords in news headlines signify dilution?

I'm trying to create a program to scan a news RSS feed for stocks that are in the process of getting diluted so that I do filter the market down to a few stocks and then do extra research on them. My ...
1
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2answers
282 views

On what time scales are stock support and resistance levels meaningful?

I recently read about support and resistance levels. The basic idea is that if it is the case that a stock usually rises when its value descends close to a certain number, we call that a support ...
6
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3answers
1k views

Found old paper shares for company that has since merged

My dad recently went through their safe deposit box and found a paper certificate for 4 shares in Northern States Power Company, issued in 1988. In 1998, NSP and New Century Energies of Denver merged ...
2
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2answers
238 views

As an individual investor, does it always make sense to sell a stock that's gone up due to a merger announcement?

Suppose I hold a stock that's recently had a run-up because another company has made a bid to acquire it. It seems like I should almost always sell the stock in this case, because there are only a ...
3
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3answers
181 views

How much will a stock be worth after a merger?

Suppose I own a common stock in ABC Corp that's currently worth $32.00. Now XYZ Inc and ABC Corp have completed a merger agreement, with XYZ Inc agreeing to pay $36 for each share of ABC Corp, ...
7
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3answers
750 views

Volatility indicator

Is there an indicator for the volatility of a stock? When I say indicator I mean like P/E ration, book value etc. If yes, where can I find it? I follow yahoo finance by the way.
3
votes
4answers
291 views

How can I find out what factors are making a stock's price rise?

For example: Fannie Mae went up ~20% today, February 3, 2011. How come? What websites have you found to be useful in returning relevant information? It seems to me Yahoo Finance is not very good at ...
3
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0answers
710 views

Earnings Per Share Metric on Google Finance vs. Yahoo Finance

I'm new to both sites (and investing) and I noticed that EPS on Google Finance is different than that of Yahoo's EPS metric (e.g. GE's EPS as of March 18 is Google: 1.01, Yahoo (Diluted EPS): .89 ). ...
5
votes
1answer
442 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 ...
2
votes
2answers
325 views

Warren Buffet's calculation of the value of the company - very low discounting rate

I was read the book "The Buffett Way". The book claims that Warren Buffett uses a simple calculation to calculate the intrinsic value of a company. The regular way is to estimate future earnings &...
8
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3answers
7k views

Why do volatility stocks/ETFs (TVIX, VXX, UVXY) trend down in the long-term?

I've noticed that stocks/ETFs that measure volatility (TVIX, VXX, UVXY, XVZ) are all trending down massively (eg VXX going from $7000/share on 3/09 and on 6/16 it is around $16/share) in the long-term ...
41
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13answers
27k views

One of my stocks dropped 40% in 2 days, how should I mentally approach this?

Right after the event, I felt shocked and depressed. I've been engaging in stocks for about a year now but I've never encountered such a big jump in such a short time. What I'm planning to do is just ...
31
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2answers
9k views

Is my stock gone forever from a reverse split / bought by another company?

I'm a complete novice in regards to investing and had purchased some shares of OXIS from TD Ameritrade back in March of 2015 (NASDAQ). The company (OXIS International) became very devalued and did a "...
17
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2answers
4k views

Shorting a stock after dividend

Theoretically, the price of a stock should always fall whenever a dividend is paid out to shareholders. Is this true in practice? If it is, I can just short the stock before the dividend is paid and ...
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2answers
142 views

What do you think the fair price of this stock is based on these summarized financial statements? [closed]

I have been trying to make a valuation by reading the financial statements, but I believe I am just guessing. I have an idea, but I do not understand completely. Can I get a valuation and a short ...
5
votes
1answer
178 views

What are the mechanics of tracking stock?

I'm curious about tracking stock. Take, for example, NASDAQ:DVMT. It's a tracking stock issued by Dell for VMWare (NASDAQ:VMW), which is partly owned by Dell. The idea is that people could invest in ...
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3answers
145 views

Does price of stock reflect earnings

If a company's earnings keep rising and the stock price keeps falling because of other factors such as lawsuits, tariffs etc., is there any guarantee that the price will rise eventually? When does ...
-1
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2answers
74 views

Earnings speculation stocks

Is it a good idea to buy a stock before its earnings come out if I believe that there will be a surprise and then sell after the report comes out? Will the gains be substantial enough for me to take ...
3
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2answers
209 views

Why is SHLD trading at ~$2 when it has $-38 book value?

I took a look at SHLD financial statements and I cant understand why SHLD is trading at ~$2 when it has -$38 book value and a highly negative P/E? What am I missing?
3
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1answer
240 views

Does Yahoo finance adjust ETF's historical data for splits and dividends? (not stocks or shares)

On the ETF's graphs I see there are steep falls. There is a legend indicating the ETF was split 1:10. However like Stocks or Shares, I don't see the price being adjusted for splits. Is this correct, ...
2
votes
1answer
1k views

Can I short a stock for a long amount of time?

The next recession is inevitable, if what I read is to be believed. Whether it happens tomorrow, or in 10 years, it's coming. Why shouldn't I short many stocks, and hold on to them for whatever ...
0
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1answer
104 views

Studying for basic finance exam and stuck finding the stock value

I'm not sure if this is the right place to ask a school related question but any help would be much appreciated! Note that this is not an actual graded assignment but I am studying for an exam with ...
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2answers
168 views

How do stocks rise?

If a stock shows great performance on the income statement, will the prices rise gradually or immediately after the release of information to the public?
3
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3answers
102 views

How is a grant of stock treated from an income tax perspective?

If I go to work for a private company and they give me stock in the company how is that treated from an income perspective? Is the value of the stock just its par value (which can be nominal in a ...
0
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2answers
121 views

what kind of stock graph is this?

this is the same pic with time frame I found this stock,but it has an unusual candlestick pattern,it is a pennystock.
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3answers
221 views

How to evaluate a job offer with stock purchase options of a series D company vs series B company?

A late stage series D startup is offering 40,000 shares at a strike price of around $1. I also have another offer from a series B startup offering similar number of stocks at 0.5$. Both these ...
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0answers
36 views

How to calculate revenue generated that is not explicitly mentioned in income statement

There is an income statement that shows the income and expenses like this 1 Revenue(3+16) 2 Product Sales and Service 3 Total Operating Income(2) 4 Generation Expense 5 Distribution Expense ...
0
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3answers
583 views

Should I only look at P/E ratio when valuing a stock?

A company is earning 40 cents per share and is trading at $6.00. From there I get the P/E ratio to be 15. It does not have much growth potential and it's earnings are relatively stable and has been ...
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1answer
85 views

Hypothetically speaking, Stock Price won't change in case there is no Volume? [duplicate]

Hypothetically speaking, let's say there is no trading volume during 1 year for a given stock, does that mean the stock price will remain the same regardless of how the company is performing? Let me ...
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votes
2answers
77 views

What if company total share value are more and assets are less

Suppose If any company have $10m total valueation and issue the shares than when company have total $12m value but shares are selling at more than that value does it affect anything or is it illegal ...