How To Read A Stock Table

This is a continuation of the stock market series of articles. In this article, we will learn how to read a stock table.

If you have picked up a newspaper and wondered what the P/Es, highs and lows meant then this post is for you.

The stock market and ownership of stocks used to be a mystery to most people but things have now changed. More and more people are now involved in the stock market.

Further, the ordinary man sees the stock market as a specialist area for the rich and the experts who can read the stock tables, etc.

As an Accountant, I can confidently tell you that it is possible to learn how to read these tables.

Once you learn how to read these tables then you can be in a position to understand how some stocks are performing.

You can then make up your mind on which stock is suitable for your situation.

I will in the next few weeks try to explain the best ways of picking stocks.

Below is an example of a stock table from the Nasdaq

Nasdaq stock table 11/12/2019

What might you use a stock table for?

Stock tables can serve two purposes. Firstly if you are an investor you can use stock tables to monitor the performance of your stocks. If you are a potential investor or looking to buy more stock then stock tables can be used to gather the relevant information that you need before you make your mind up.

How to read a stock table?

1. Name and Ticker Symbol

Here the name represents the name of the company being reported. The Ticker symbols are the abbreviations of the company name.

2. 52 Week high

This column shows the highest price the stock reached over the past 52 weeks.

3. 52-week low

This column shows the highest price the stock reached over the past 52 weeks.

4. Dividend

The value shown here represents the annual dividend for each share of that stock in the last financial year.

5. Volume

This represents the number of shares of a particular stock that were traded on that particular day.

It is an indication of the liquidity of a stock. Liquidity in this case meaning how easy it is to buy and sell.

In most cases, it is preferable to go for stocks with a high volume. You, however, have to take into account the size of the companies as small companies are traded less heavily than large firms.

Volumes of stocks traded can also go higher when a company makes an announcement.

6. Yield (Dividend Yield)

This shows the percentage return on the stock. It is calculated by dividing the dividend by the current stock price.

This part of the stock table will help you understand how the market values the company.

A low dividend yield indicates that the market views the company as a secure business with a high growth rate.

However, you need to be careful here as there is no rule on how much dividend a company can declare.

Every company decides on its own how much of its profits it is going to declare as dividends.

This makes the formula not a very reliable indicator of the company’s health or value.

Because of the arbitrary nature of the dividend figure, an investor needs to consider the price/earnings ratio.

The price/earnings ratio is a much better indicator as it is independent of arbitrary company decisions.

7. P/E (Price/earnings ratio)

The is the market price of the stock divided by the companies earnings (profits) per share in the last 12 months of trading. This compares a company’s stock price with its annual earnings. It indicates the number of years that it would take for the company, based on its current earnings, to earn an amount equal to its market value.

It is one of the most important ratios used by analysts to analyze any stock. The higher the ratio they highly regarded the stock is by the market.

8. Day last

This column represents the stock’s ending price for that particular day.

9. Net change

This compares the stock price end today with the prior day stock price end. For example, if the stock price at the close of business yesterday was $20 per share and today’s close of business price is $25, the net change is $5 ($25-$20). Therefore the stock table to be in tomorrow’s stock table will show +5 net change.

10. Dividend Cover

This is calculated by dividing the earnings (profits) per stock by the dividend per stock. It shows the number of times a firm’s dividend to ordinary shareholders could be paid out of net earnings (profits).

11. Market Capitalisation

This shows the stock market valuation of the whole company in millions of dollars. It is calculated by multiplying the number of stocks by their market price. For example, let’s take a company that has 1 million shares of stock and has a market price of $20 per share of stock. Here the market capitalization is 1 million shares of stock times the $20 which comes to $20 million as the market capitalization.

Conclusion

It is my hope that this post has addressed some of your questions on how to read a stock table. Please let me know if you need more help in these areas.

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