|
Growth Companies
In finance, a growth stock is a stock of a company that generates substantial and sustainable positive cash flow and whose revenues and earnings are expected to increase at a faster rate than the average company within the same industry. A growth company typically has some sort of competitive advantage (a new product, a breakthrough patent, overseas expansion) that allows it to fend off competitors. Growth stocks usually pay smaller dividends, as the companies typically reinvest most retained earnings in capital-intensive projects. Criteria Analysts compute return on equity (ROE) by dividing a company's net income into average common equity. To be classified as a growth stock, analysts generally expect companies to achieve a 15 percent or higher return on equity. CAN SLIM is a method which identifies growth stocks and was created by William O'Neil a stock broker and publisher of ''Investor's Business Daily''. In academic finance, the Fama–French three-factor model relies on bo ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Finance
Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of financial economics bridges the two). Finance activities take place in financial systems at various scopes, thus the field can be roughly divided into personal, corporate, and public finance. In a financial system, assets are bought, sold, or traded as financial instruments, such as currencies, loans, bonds, shares, stocks, options, futures, etc. Assets can also be banked, invested, and insured to maximize value and minimize loss. In practice, risks are always present in any financial action and entities. A broad range of subfields within finance exist due to its wide scope. Asset, money, risk and investment management aim to maximize value and minimize volatility. Financial analysis is viability, stability, and profitability asse ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Investor's Business Daily
''Investor's Business Daily'' (''IBD'') is an American newspaper and website covering the stock market, international business, finance and economics. Founded in 1984 by William O'Neil as a print news publication, it is owned by News Corp and is headquartered in Los Angeles, California. Holding a conservative political stance, ''IBD'' provides news and analysis on stocks, mutual funds, exchange-traded funds, commodities, and other financial instruments aimed at individual investors and financial professionals. It also provides tools for financial literacy. The publication focuses on the CAN SLIM investment strategy developed by founder William O'Neil. Every Monday in its weekly edition, the publication publishes the components of ''The IBD 50 Index'', a list of 50 growth stocks that are most attractive based on earnings, stock price performance, and other criteria used in the CAN SLIM strategy. It is the basis for an exchange-traded fund (ETF) called the Innovator IBD 50 ETF (Tic ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Benjamin Graham Formula
The Benjamin Graham formula is a formula for the valuation of growth stocks. It was proposed by investor and professor of Columbia University, Benjamin Graham - often referred to as the "father of value investing". Published in his book, ''The Intelligent Investor'', Graham devised the formula for lay investors to help them with valuing growth stocks, in vogue at the time of the formula's publication. Graham cautioned here that the formula was not appropriate for companies with a "below-par" debt position: "My advice to analysts would be to limit your appraisals to enterprises of investment quality, excluding from that category such as do not meet specific criteria of financial strength". Formula calculation In Graham's words: "Our study of the various methods has led us to suggest a foreshortened and quite simple formula for the evaluation of growth stocks, which is intended to produce figures fairly close to those resulting from the more refined mathematical calculations." ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
PVGO
In corporate finance, Alex Stomper (N.D.Finance Theory I MIT OpenCourseWare the present value of growth opportunities (PVGO) is a valuation measure applied to growth stocks. It represents the component of the company’s stock value that corresponds to (expected) growth in earnings. It thus allows an analyst to assess the extent to which the share price represents the current business, and to what extent it reflects assumptions about the future. As a proportion of market cap, PVGO can then also be used in relative valuation, i.e. when comparing between two investments (see similar re PEG ratio). PVGO is calculated as follows: : This formula arises by thinking of the value of a company as inhering two components: (i) the present value of existing earnings, i.e. the company continuing as if under a "no-growth policy"; and (ii) the present value of the company's growth opportunities. PVGO can then simply be calculated as the difference between the stock price and the present va ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
PEG Ratio
The 'PEG ratio' ( price/earnings to growth ratio) is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share ( EPS), and the company's expected growth. In general, the P/E ratio is higher for a company with a higher growth rate. Thus, using just the P/E ratio would make high-growth companies appear overvalued relative to others. It is assumed that by dividing the P/E ratio by the earnings growth rate, the resulting ratio is better for comparing companies with different growth rates. The PEG ratio is considered to be a convenient approximation. It was originally developed by Mario Farina who wrote about it in his 1969 Book, ''A Beginner's Guide To Successful Investing In The Stock Market''. It was later popularized by Peter Lynch, who wrote in his 1989 book ''One Up on Wall Street'' that "The P/E ratio of any company that's fairly priced will equal its growth rate", i.e., a fairly valued company will have its PEG equal ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Earnings Growth
Earnings growth is the annual compound annual growth rate (CAGR) of earnings from investments. For more general discussion see: Sustainable growth rate#From a financial perspective; Stock valuation#Growth rate; Valuation using discounted cash flows#Determine the continuing value; Growth stock; PEG ratio. Overview When the dividend payout ratio is the same, the dividend growth rate is equal to the earnings growth rate. Earnings growth rate is a key value that is needed when the Discounted cash flow model, or the Gordon's model is used for stock valuation. The present value is given by: :P = D\cdot\sum_^\left(\frac\right)^ . where P = the present value, k = discount rate, D = current dividend and g_i is the revenue growth rate for period i. If the growth rate is constant for i=n+1 to \infty, then, :P = D\cdot\frac + D\cdot(\frac)^2 +...+ D\cdot(\frac)^n+ D\cdot\sum_^\left(\frac\right)^ The last term corresponds to the terminal case. When the growth rate is always the sa ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Value Stock
Value investing is an investment investor profile, paradigm that involves buying security (finance), securities that appear underpriced by some form of fundamental analysis. The various forms of value investing derive from the investment philosophy first taught by Benjamin Graham and David Dodd at Columbia Business School in 1928, and subsequently developed in their 1934 text ''Security Analysis (book), Security Analysis''. The early value opportunities identified by Graham and Dodd included stock in public companies trading at discounts to book value or Tangible common equity, tangible book value, those with high dividend yields, and those having low PE ratio, price-to-earning multiples, or low price-to-book ratios. High-profile proponents of value investing, including Berkshire Hathaway chairman Warren Buffett, have argued that the essence of value investing is buying stocks at less than their Intrinsic value (finance), intrinsic value. The discount of the market price to the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Turnaround Stock
A turnaround stock is a stock of a company that has hit some trouble and very well might get things better. This makes the stock go up quite a bit. See also *Value stock Value investing is an investment investor profile, paradigm that involves buying security (finance), securities that appear underpriced by some form of fundamental analysis. The various forms of value investing derive from the investment philoso ... External linksTurnaround Stocks Of The Forbes 400 {{econ-stub Valuation (finance) Stock market Investment ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Book-to-market Ratio
The price-to-book ratio, or P/B ratio, is a financial ratio used to compare a company's current market value to its book value (where ''book value'' is the value of all assets minus liabilities owned by a company). The calculation can be performed in two ways, but the result should be the same. In the first way, the company's market capitalization can be divided by the company's total book value from its balance sheet. The second way, using per-share values, is to divide the company's current share price by the book value per share (i.e. its book value divided by the number of outstanding shares). It is also known as the market-to-book ratio and the price-to-equity ratio (which should not be confused with the price-to-earnings ratio), and its inverse is called the book-to-market ratio. As with most ratios, it varies a fair amount by industry. Industries that require more infrastructure capital (for each dollar of profit) will usually trade at P/B ratios much lower than, for example, ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Fama–French Three-factor Model
In asset pricing and portfolio management the Fama–French three-factor model is a statistical model designed in 1992 by Eugene Fama and Kenneth French to describe stock returns. Fama and French were colleagues at the University of Chicago Booth School of Business, where Fama still works. In 2013, Fama shared the Nobel Memorial Prize in Economic Sciences for his empirical analysis of asset prices. The three factors are (1) market excess return, (2) the outperformance of small versus big companies, and (3) the outperformance of high book/market versus low book/market companies. There is academic debate about the last two factors. Background and development Factor models are statistical models that attempt to explain complex phenomena using a small number of underlying causes or factors. The traditional asset pricing model, known formally as the capital asset pricing model (CAPM) uses only one variable to describe the returns of a portfolio or stock with the returns of the market ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
William O'Neil
William J. O'Neil (born March 25, 1933) is an American entrepreneur, stockbroker and writer, who founded the stock brokerage firm William O'Neil & Co. Inc in 1963 and the business newspaper ''Investor's Business Daily'' in 1984. He is the author of the books ''How to Make Money in Stocks'', ''24 Essential Lessons for Investment Success'' and ''The Successful Investor'' among others, and is the creator of the CAN SLIM investment strategy. Early life and education O'Neil was born March 25, 1933, in Oklahoma City and raised in Texas. In 1951, he graduated from Woodrow Wilson High School in Dallas, Texas. He studied business at Southern Methodist University, received a bachelor's degree in 1955 and served in the United States Air Force. Career Early career In 1958, O'Neil started his career as a stockbroker at Hayden, Stone & Company, and developed an investment strategy which made early use of computers. In 1960, he was accepted to Harvard Business School's first Program fo ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Stock
In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company is divided, or these shares considered together" "When a company issues shares or stocks ''especially AmE'', it makes them available for people to buy for the first time." (Especially in American English, the word "stocks" is also used to refer to shares.) A single share of the stock means fractional ownership of the corporation in proportion to the total number of shares. This typically entitles the shareholder (stockholder) to that fraction of the company's earnings, proceeds from liquidation of assets (after discharge of all senior claims such as secured and unsecured debt), or voting power, often dividing these up in proportion to the amount of money each stockholder has invested. Not all stock is necessarily equal, as certain classe ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
