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Stock Research and Analysis
Learn the tools of stock trading.
Stock Research and Analysis
At a Glance
A stock quote provides essential transaction information of a stock on a particular day. It is usually presented in a table and can be read at a quick glance.
| Column name | Example | What it means |
|---|---|---|
| Stock name | DBS | Name used for trading on the counter/stock |
| Symbol | D05 | Code: assigned to the stock for easier reference and identification of the counter |
| Last | 20.380 | Last traded stock price |
| Chg | +0.030 | Change: change in last traded stock price from the previous day’s closing price |
| % Chg | +0.147 | Percentage change in last traded stock price from the previous day’s closing price |
| Vol | 2,468.5 | Volume: number of stocks (in thousands) traded so far during the trading day |
| Buy | 20.370 | Buying price: stock price at which buyers are willing to buy at |
| Sell | 20.380 | Selling price: stock price at which sellers are willing to sell at |
| Open | 20.350 | Traded stock price at the start of the trading day |
| High | 20.420 | Highest traded stock price so far during the trading day |
| Low | 20.340 | Lowest traded stock price so far during the trading day |
Stock Analysis
- Technical Analysis
Technical analysis is used to determine when and at what price to buy and sell a stock. It involves studying past prices and trading volume to predict future stock price movement. Common tools used include market depth and stock charts.
Stock chart
- Time Interval/duration
The x-axis can display from minutes to years’ worth of stock price history.
- Chart type
Charts can appear in various forms such as line, candlestick, stairstep, to name a few. In this case, it is a bar chart.
- Price
The length of the vertical bar shows the stock price range for that day. The small horizontal dash on the left of the vertical bar indicates the opening price for that day while the one on the right indicates the current price (assuming trading day has not ended) or closing price for that day.
A green bar indicates the closing price is higher than the opening price; a red bar indicates the closing price is lower than the opening price. - Volume
These vertical bars indicate the volume of shares traded for that day. Green represents the stock volume traded was higher than the day before, and red when the stock volume was lower.
- Time Interval/duration
- Fundamental Analysis
Fundamental analysis seeks to determine the growth potential of a stock. Therefore, it looks at external factors such as overall economy and industry conditions the company is subjected to, as well as internal factors such as financials and management of the company. Below are some key financial terms often used in fundamental analysis.
| Financial term | Definition | Significance |
|---|---|---|
| Return on equity (ROE) | Earnings relative to the amount invested by shareholders ROE = Net income / Shareholders’ equity | It shows how profitable a company is, and particularly, how good it is in using shareholders’ investment to generate earnings. |
| Earnings per share (EPS) | Amount of earnings allocated to each common stock EPS = (Net Income - Dividends on Preferred Stock / Average Outstanding Shares) | It shows how profitable a company is, and particularly its ability to distribute dividends or reinvest earnings for future growth. A comparison of EPS over the years will give a sense of a company’s growth. |
| Dividend payout ratio | Ratio of earnings paid out in dividends to shareholders. Dividend payout ratio = Dividends per share / Earnings per share | It shows the ability of a company to continue to pay a certain dividend. A high dividend payout ratio indicates that a company is paying more dividends than keeping its earnings. |
| Market capitalisation (market cap) | Market value of all outstanding shares of a company. Market cap = Price per share x Total number of shares outstanding | It is a measure of the company's worth. |
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