Introduction to basic concept of a stock
- Market capitalization
Market capitalization refers to the total dollar market value of a company's outstanding shares of stock. It means the total value of a listed company's shares at market prices.
Market Cap = Current Share Price * Total Number of Shares Outstanding
- Volume
Volume is the amount of an asset or security that changes hands over some period of time, often over the course of a day. For instance, stock trading volume would refer to the number of shares of a security traded between its daily open and close.
- Share turnover
Share turnover is calculated by dividing the average number of shares traded over a given period by the average number of total outstanding shares for that same period. The percentage result represents what percent of all available shares that could have been traded were actually traded.
- P/E ratio (TTM)
The trailing Twelve Months (TTM) P/E ratio is a relative valuation multiple that is based on the last 12 months of actual earnings and is calculated by taking the current stock price and dividing it by the TTM earnings per share (EPS). The formula of the P/E ratio (TTM) is Trailing P/E Ratio = Current Share Price / TTM EPS.
- P/B ratio
Price to book ratio is a stock valuation metric used to evaluate a company’s current market value relative to its book value. The book value is defined as the company’s total assets minus any liabilities. The P/B ratio is calculated by dividing the company's stock price per share by its book value per share (BVPS).
P/B ratio= Market Price per Share / Book Value per Share
- Market value per share is obtained by simply looking at the share price quote in the market.
- Book Value per Share: (total assets - total liabilities) / number of shares outstanding.
P/B ratios under 1 are typically considered solid investments by value investors. While P/B ratios on the lower end can generally suggest a company is undervalued and P/B ratios on the higher end can mean the opposite, a closer examination is still required before any investment decision is made.
- Dividend rate (TTM)
The dividend rate is the amount of cash returned by a company to its stockholders on an annual basis as a percentage of the market value of the company. The cash returned to investors is called a dividend, hence the term dividend rate. On a per-share basis, the dividend rate is the amount of annual dividend per stock, divided by the current price of the stock.
Dividend Rate = Dividend Per Share / Current Share Price
Dividend rate (TTM) is a company's trailing 12-month dividends per share divided by the company's trailing 12-month current share price. The higher the dividend rate, the more of its earnings a company pays out as dividends.
- Dividend Yield (TTM)
The dividend yield displayed as a percentage - is the amount of money a company pays shareholders for owning a share of its stock divided by its current stock price.
Dividend Yield = Dividend per share / Market value per share
Trailing twelve dividend yield gives the dividend percentage paid over a prior period, typically one year. A trailing twelve-month dividend yield, denoted as "TTM", includes all dividends paid during the past year in order to calculate the dividend yield.
