Presentation is loading. Please wait.

Presentation is loading. Please wait.

Beta The beta is a measure of a stock’s price volatility in relation to the rest of the market. In other words, how does the stock’s price move relative.

Similar presentations


Presentation on theme: "Beta The beta is a measure of a stock’s price volatility in relation to the rest of the market. In other words, how does the stock’s price move relative."— Presentation transcript:

1 Beta The beta is a measure of a stock’s price volatility in relation to the rest of the market. In other words, how does the stock’s price move relative to the overall market. Example: DNB.67 Less than 1 means that the risk is lower than the market average

2 Beta Stocks that have a beta greater than 1 have greater price volatility than the overall market and are more risky. Stocks with a beta of 1 fluctuate in price at the same rate as the market. Stocks with a beta of less than 1 have less price volatility than the market and are less risky

3 Beta - Risk Risk also implies return. Stocks with a high beta should have a higher return than the market. If you are accepting more risk, you should expect more reward. Investors can find the best use of the beta ratio in short-term decision-making, where price volatility is important. If you are planning to buy and sell within a short period, beta is a good measure of risk.

4 Book Value - definition The value at which an asset is carried on a balance sheet. To calculate, take the cost of an asset minus the accumulated depreciation. Example: DNB & WFM Read more: http://www.investopedia.com/terms/b /bookvalue.asp#ixzz1nL4tw3S1http://www.investopedia.com/terms/b /bookvalue.asp#ixzz1nL4tw3S1

5 1. It is the total value of the company's assets that shareholders would theoretically receive if a company were liquidated. 2. By being compared to the company's market value, the book value can indicate whether a stock is under- or overpriced. Read more: http://www.investopedia.com/terms/b/bo okvalue.asp#ixzz1nL59N9w6market valuehttp://www.investopedia.com/terms/b/bo okvalue.asp#ixzz1nL59N9w6

6 Price – Earnings Ration (P/E ratio) A valuation ratio of a company's current share price compared to its per-share earnings. Calculated as:current share Market Value per Share Earnings per Share (EPS) For example, if a company is currently trading at $43 a share and earnings over the last 12 months were $1.95 per share, the P/E ratio for the stock would be 22.05 ($43/$1.95). Read more: http://www.investopedia.com/terms/p/price- earningsratio.asp#ixzz1nL7DuZPXhttp://www.investopedia.com/terms/p/price- earningsratio.asp#ixzz1nL7DuZPX

7 Earnings per Share (EPS) portion of a company’s profit allocated to each outstanding share of common stock. For instance, a corporation that earned $10 million last year and has 10 million shares outstanding would report earnings of $1 per share. Read more: http://www.answers.com/topic/earning -per-share#ixzz1nL9pK2Czhttp://www.answers.com/topic/earning -per-share#ixzz1nL9pK2Cz


Download ppt "Beta The beta is a measure of a stock’s price volatility in relation to the rest of the market. In other words, how does the stock’s price move relative."

Similar presentations


Ads by Google