Use technical and fundamental analysis, as well as basic charts to assess stock performance.
If you are keen to invest in stocks, understanding the components of a stock quote is a good starting point. It contains essential transaction information of a stock on a particular day and is usually presented in a table.
Here is a glossary of the components of a stock quote.
|Component||Example||What it means|
Name used for trading on the counter
Code: assigned to the stock for easier reference and identification of the counter
Remark: indicates the stock’s status as suspended, trading halt, delisted etc
Board Lot: standard number of stocks for trading; current board lot size for SGX is 100 shares
Last traded stock price
Change: change in last traded stock price from the previous day’s closing price
Percentage change in last traded stock price from the previous day’s closing price
Volume: number of stocks (in thousands) traded so far during the trading day
Buy Volume: number of stocks (in thousands) buyers are queueing to buy at buying price
Buying price: stock price at which buyers are willing to buy at
Selling price: stock price at which sellers are willing to sell at
Sell Volume: number of stocks (in thousands) sellers are queueing to sell at selling price
Traded stock price at the start of the trading day
Highest traded stock price so far during the trading day
Lowest traded stock price so far during the trading day
Dollar value of stock traded so far during the trading day
Industry in which the stock belongs to
While a stock quote displays the current buying and selling prices of a particular stock at any one time, a market depth chart shows real-time orders bidding to buy or asking to sell the stock at different prices at a single point in time during a trading day.
When there are many traders queueing to buy and sell a stock at various prices, this stock is considered liquid. This is good for investors because higher depth suggests better liquidity.
Technical analysis is used to determine when and at what price to buy and sell a stock. It involves studying statistics generated by market activity such as historical prices and trading volume to predict stock price movement.
Tools used in technical analysis include market depth and stock charts, which present essential transaction information of a stock over a time period.
Fundamental analysis attempts to measure the intrinsic value of a stock. It takes into consideration the macroeconomic environment of the overall economy, industry conditions, as well as financials and management of companies. The goal of fundamental analysis is to identify stocks with growth potential.
Here are some important financial terms to understand in fundamental analysis.
Return on equity (ROE)
Earnings generated relative to the amount invested by shareholders
Net income /
ROE is a measure of a company's profitability. It is useful for evaluating the company's efficiency in managing its shareholder's equity. A high ROE indicates the company is effective in using shareholders' investment to generate earnings.
Earnings per share (EPS)
Earnings of a company allocated to each outstanding share of common stocks
(Net Income - Dividends on Preferred Stock) /
It determines a company's profitability and its ability to distribute dividends or reinvest the funds for growth.
Price-to-earnings ratio (P/E ratio)
Ratio of a company's market price in relation to its earnings per share. It is also known as price multiple or earnings multiple.
Market price per share /
It indicates how much an investor is willing to pay per dollar of earnings. It is also an useful indicator of expectations of growth opportunities. When comparing P/E ratios, it is important to compare companies of the same industry and characteristics.
Price-to-book ratio (P/B ratio)
Ratio of a company's market value in relation to its book value.
Market price per share /
P/B ratio is one of the factors that can help determine if a stock underpriced or overpriced when compared to its book value.
Dividend payout ratio
Ratio of earnings paid out in dividends to shareholders.
Dividends per share /
It can be used to determine the sustainability of a company's dividend payout.
Annual dividend payout relative to company’s share price
Annual dividend paid per share /
Measures the rate of return a shareholder receives for each dollar invested.
Operating cash flow ratio
The number of times a company can pay off its current liabilities with its operating cash flow.
Cash flow from operations /
It can measure a company's ability to cover its current liabilities with cash generated from operations.
Market capitalisation (market cap)
Market value of all outstanding shares of a company.
It is a measure of the company's value.
A company's total assets minus its total liabilities.
It is also known as the book value of a company. A company with a positive shareholders' equity will generally be a safer investment choice.
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