Guide to the Stock Market

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How To Read Stocks

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Right now all those numbers seem to be Greek language to you perhaps, but if you know what each one stands for and how these numbers relate to each other, it will become easy to understand.



The Wall Street Journal, Investor's Business Daily, and the business section of most dailies show charts and tables from different major stock exchanges such as the NYSE, the Nasdaq, and AMEX. Information about penny stocks is found in the Russell 2000, and S&P 600 stock tables. Understanding stocks investment tables is helpful if you are looking for a worthwhile stocks investment opportunity, or if you want to track the stocks that you have bought.

52 week high - This is the highest price that the stock has reached in the last 52 weeks. This price will give you an idea of where the stock is now in reference to its performance in the past.

52-week low: This is the lowest price that the stock has reached in the last 52 weeks. This is information is helpful in analyzing the stocks performance over a period of time.

Div: A div, or dividend, is a payment made by the company to the stockholder. If the company pays a dividend, it will show in this column. The price you will see here is the annual dividend per share of stock.

Yld: This means Yield, and refers to the percentage of the dividend over the stock price. If a company did not give any dividends, the value would be zero.

P/E: This is the ratio between the price of the stock and the company's earnings. The figure is reported as per single share of stock. The P/E ratio is also called earnings multiple or multiple, and is used to determine whether a stock is expensive and therefore a good stocks investment. For large cap stocks, a P/E of 10 to 20 is ideal, and for growth or small caps stocks, this should be 30 to 40, not more.

The P/E ratio is one of the most important figures on the stock table because it will tell you whether your smart caps stock is a good buy or not. If you notice that a company has no P/E ratio, this means that the company reported a loss in the last year and would probably not be a good stocks investment.

Vol: This refers to the trading volume of the stock, meaning the total number of stocks of the company that were bought and sold for the day. What you would have to watch out for is a highly active activity - positive or negative - for that stock. If the trading volume has an excessive difference from that stocks normal range, then something must be going on.

It may be that the company has just entered into a new deal with another company or introduced a new product, or it may experiencing financial problems.

High/Low: The high and low figures indicate the highest and lowest price at which the stock was bought and sold for a particular day.

Day Last: This figure tells you the price at which the stock ended during the trading for the day.

Chg: This number refers to the Net Change between the stocks performance at the end of today, compared with the end of the previous day.

There are many more figures and codes to a stock table, but these are the most common. Some stock exchanges and electronic quotation systems will show more figures than others. If you can begin to understand these figures, after a while you will find yourself getting out that paper, pen and calculator to do work out your own computations and estimates.
How To Read Stocks
To begin, you'll notice that there are about twelve columns across the table, and each stock has its own line. The first two columns (usually labeled something like "52W High" and "52W Low") are dealing with the stock's performance over the past year. "52W High" shows the highest point the stock has reached in the past 52 weeks, and "52W Low" shows the lowest.

In the following column you'll see the actual name of the stock. This will be followed by another column that shows the stock's ticker symbol. There's a unique combination of letters for each stock. In fact, you might be able to recognize some of them. Maybe you've seen the tickers running across the bottom of the screen when you watch the news.

By the way, watching some of the financial shows could be a good idea. It will further your knowledge even more on how to read stocks and understand the way the market works.

Next to the ticker column is a column labeled "Div." This indicates the stock's annual dividend paid out per share. Many rows will have this column blank, which means they don't currently pay out dividends. The same goes for the next column - "Yield %" - the percentage return on the dividend.

The earnings ratio is indicated by P/E. You get this number by dividing the current stock price by the earnings per share for the last four quarters.

"High" and "Low" are the next two columns. You'll be able to see the lowest and highest point the stock has reached in the day's trading. "Net Change" shows the change from the day before; "Close" tells you the point when the stock closed for the day.

With a basic understanding of how to read stocks, you can now move on and start learning more about the market itself.
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Both Nir Dotan & Carlie Eviee are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Nir Dotan has sinced written about articles on various topics from Argentina Travel, Penny Stocks and Pink Sheets. Nir Dotan is a writer and promoter ofStocks Investment services, andStocks Investment. Nir Dotan's top article generates over 74000 views. Bookmark Nir Dotan to your Favourites.

Carlie Eviee has sinced written about articles on various topics from Stock. Visit How to Buy Stocks and get the free resources you need in discovering. Carlie Eviee's top article generates over 1900 views. Bookmark Carlie Eviee to your Favourites.
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