Ticker Symbols and Stock Quotes - PowerPoint Presentation

Slide1

Ticker Symbols and Stock Quotes

Mr.

ISlide2

Ticker Symbols

To buy or trade a stock, a person must know the ticker symbol for the stock, mutual fund, or ETF.

Stocks listed on the NYSE typically have 1 to 3 letters

Stocks listed on the NASDAQ typically had 3-5 letters

You can look up stock quotes and symbols on google and many other financial websitesSlide3

Vocabulary

P/E Ratio

: Stands for price-to-earnings ratio. The P/E is the relationship between a company's earnings and its share price. It is calculated by dividing the current price per share by the earnings per share

.

Volume

: The number of shares traded in a company's stock. Unusual market activity, either higher or lower than average, is typically the result of some external

event

Share

: A

share is a unit of ownership in a corporation or mutual fundSlide4

Rights and Responsibilities as Stockholder

Owners of common stock have the right to

all non-patented information

about the company

.

In fact most corporations have corporate customer relations departments to provide information to and hear from investors

. (Don’t need to know this-don’t write this)

They also have the right to a share of the profits of the corporation in the form of

dividends

They

have the right to vote for the members of

the board and vote and issues coming before the board.

Have the right to learn about board members and various issues that are going to come before the board.

They

have the right to submit their own proposals

.

Shareholders

also have the right to sell

and buy shares anytimeSlide5

What is a Company?

A company is a business or an association that is setup to manufacture, refine, or supply services for a profit.

Can be :

1) A partnership – between 2 people

2) A Limited Liability Partnership (LLP) – Much of the profit and loss is transferred from the partners to the partnership owners. 3)Corporation – Can be private or public. Company is broken up into stockholders who share in the profit and losses of the company.

4) Single Owner – Baller Status ?? Owns their own businessSlide6

Public Companies

A public corporation is a company with publicly traded shares that anyone can buy in a stock market.

A

public corporation is also legally separated from the stockholders who own it and the managers who run it.

A

corporation offers these advantages:

•

Stockholders’ are not responsible for the company’s debt

;

•

A corporation continues to exist even if its stockholders or managers change

;

•

Stockholders can easily sell their ownership shares through the stock

market

.

Public companies are run by a CEO- Chief Executive Officer (Makes this big $), the finances are run by the CFO – Chief Financial OfficerSlide7

Private Companies

A private corporation may be owned by an individual or privately sell stock to fund the business.

The

partners in the company are called shareholders.

They

receive shares for their contributions to the business.

Shareholders

have ownership and some decision making power in the company. The company does not sell shares to the public; you cannot buy shares of a private company on the stock market.Slide8

Difference in Investing in Public and Private Companies

If you are investing in a public company, you need the share price to increase over time and possibly to receive a dividend.

For a companies share price to increase the following must happen:

Earnings per a share increase

Revenue increases

Gross Margin Increase

Other Metrics –

All of the above relate to the companies GROWTH or ability to INCREASE DIVIDENDS.

Private companies on the other hand just need to make a profit that it can then split between its shareholders. Slide9

What is the DOW?

Stands for Dow Jones Industrial average

The

Dow is comprised of 30 of the largest companies in the U.S. across a range of industries except for transport and utilities

. Known as BLUE CHIP stocks – suppose to be very stable

criteria for a company to get on the Dow is vague;

the

companies are leaders in their industry and very large.

The

components in the DJIA do not change often as it takes an important change in a company for it to be removed from the

index

If the index

comes up for review, the 

Wall Street Journal

 editors often replace more than one company at a time

. (Don’t write this)Slide10

What is the S&P 500?

500 largest companies throughout a variety of industries

Based on following criteria :

Market Cap of over 5 Billion

4 Quarters of continuous profit

Adequate liquidity

Public Float of more than 50% - (Public Float – number of shares available for public to trade)Slide11

Russel 2000

An index measuring the performance approximately 2,000 small-cap

companies

serves as a benchmark for small-cap stocks in the United States

.

The weighted average market capitalization for companies in the Russell 2000 is about US$1.3 billion 

The

Russell 2000 Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that

index.

The

Russell 2000 is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set.Slide12

Russel 1000

The Russell 1000 Index measures the performance of the large-cap segment of the U.S. equity

universe.

 It is a subset of the Russell 3000® Index and includes approximately 1000 of the largest securities based on a combination of their market cap and current index membership

.

The Russell 1000 represents approximately 92% of the U.S. market. 

The Russell 1000 Index is constructed to provide a comprehensive and unbiased barometer for the large-cap segment and is completely reconstituted annually to ensure new and growing equities are reflected.Slide13

Russel 3000

The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market

.

The Russell 3000 Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad market and is completely reconstituted annually to ensure new and growing equities are reflected.Slide14

What is the use of these Indices?

They show people at a glance how the overall market is doing.

You can track sectors and make trades accordingly. (See what is working and what is not)

Modern day trading is mostly done by buying baskets of stocks, called ETF’s and Mutual Funds. These are made and traded based on these indexes.

For instance if the Dow goes down 1% in a day, these funds like the

iShares

Dow Jones U.S. ETF (IYY

) would be down about 1% roughly based on their holdings of the Dow.

http://money.usnews.com/funds/etfs/large-cap-funds/ishares-dow-jones-u.s.-etf/iyy