Part of a companys profits earnings paid periodically to stockholders Stands for pricetoearnings ratio The PE is the relationship between a companys earnings and its share price It is calculated by dividing the current price per share by the earnings per share ID: 738820
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Slide1
Identifying symbols and interpreting stock quotesSlide2
Part of a company’s profits (earnings) paid periodically to stockholdersStands 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.
A share is a unit of ownership in a corporation or mutual fund
Dividend
P/E Ratio
Share Slide3
A type of security that signifies ownership in a corporation and represents a claim to a part of the company’s profits or losses. Companies usually issue stock to raise money for a variety of reasons, including expanding or modernizing their operations.
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.
Stock
volume Slide4
Would you buy stock in the companies that make these products? Why? Why not?Slide5
General Electric
GE
General Motors
GM
Dell
DELL
General Mills
???
Ticker symbolsSlide6
CCLAYCCLAF
KO
KOFCCHOFCCHCCHBF
COKE
CCE
GO TO
HTTP
://
FINANCE.YAHOO.COM
TO PERFORM A SYMBOL SEARCH FOR COCA COLACAN YOU IDENTIFY THE TICKER SYMBOL FOR THE COCA COLA COMPANY?Slide7
PARENT
COMPANIES
VS.
SUBSIDIARIESSlide8
Google Yum! Brands, Inc.Do you recognize some of its subsidiaries?
YUM! Brands, inc.Slide9
Activity sheet 1: reading a stock quoteSlide10
What is stock?Slide11
What is the best sneaker on the market? Why?
How do you know it is the best?
If it is the best, would you want to own all or part of that company?Slide12
Why did the founders
of
companies like Nike, Apple
and
Sony
give up a portion of their ownership to sell shares to the public?Slide13
Activity sheet 1: what is a stock?Slide14
Select 5 products in which you are familiarWhich companies make the products?
Which are publicly traded or privately held?
What other products do the companies make?
You have 1 tool needed when purchasing stock:
knowledge of products people likeSlide15
Activity sheet 2: Stock market calculationsSlide16
What is a company?Slide17
A business or association usually formed to manufacture or supply products or services for profit
Can be a partnership, LLP, corporation or a proprietorship
All companies are setup in accordance with government regulations
Company Slide18
A company with publicly traded shares that anyone can buy in a stock marketLegally separated from the stockholders who own it and the managers who run it
Public corporation Slide19
A corporation that doesn’t sell shares to the public. You cannot buy shares of a private company in the stock market
Private corporationSlide20
What do these people have in common?Slide21
Each is a company that makes products or provides services to customers. The Trump organization is owned by one person but Microsoft and Martha Stewart Living Omni Media were founded by one person but became public corporations.
They all started their own famous companies!Slide22
Why would a company change its ownership?
Why would a private company want to become a public corporation?Slide23
Activity sheet 1: P&g – production & growthSlide24
What is diversification
?Slide25
It’s hard to predict how a company will perform over time.Diversification is a way to protect your money.
It’s a successful way to reduce risk.
diversificationSlide26
The clothes your wear?
The classes you take?
The food you eat?
What are the pros and cons of being diversified in these areas?
How is your life diversified?Slide27
How diversified are these portfolios?Slide28
How many different industries are represented in each portfolio?
What do you notice about the portfolios? Are any “heavy” with one particular industry?Slide29
Portfolio A=very diversified, contains stocks from a variety of industries
Portfolio B=not as diversified, several technology related companies
Portfolio C=not as diversified, several companies that sell or create personal luxury itemsSlide30
Industry/sector Research
http://www.nasdaq.com/markets/barchart-sectors.aspxSlide31
Select investments from at least 3 different industriesDiversify holdings evenly within an industry (for example: invest in the stock of high cap company such as Disney vs. start-up, low cap, animation company that appears to have potential for growth)
Rules for the gameSlide32
What causes stock prices to change?Slide33
Stock price = what investors believe a company is worth
Supply <
Demand
$$$$
Supply >
Demand
$Slide34
Internal corporate activityIndustry trends
National/international events (political, social, and scientific news)
Good
or
badSlide35
Go to an online news website, read through Economy/Business headlines and answer the following questions:
1. Do any of the headlines affect the portfolio your team is managing in The Stock Market Game?
2. Does any of this news make you want to investigate industries or companies you hadn’t considered investing in before?Slide36
P/E ratiosQuarterly earnings results
Earnings projections
Data
Slide37
How do you think this situation impacted both companies and prices of the shares of stock in their companies?Slide38
Influences on the marketSlide39
A. cut into earning, legal fees to cover the investigation and a lawyer in court
B. could make parents buy from other companies with a good reputation
C. as sales decrease the price of stock will go down
D. bad headlines=falling stock price
E. could take awhile to bounce back and rebuild reputation
F. it will drop but not as much until found guilty
G. guilty or innocent???
Toys for everyoneSlide40
Earnings will go down to pay for further tests and because they can’t sell it for 10 years
Hurt the company short term but if approved help in the long term
Price will drop and stay low until approved to sell
Price will stay low until they can get another drug approved
It will increase as long as it is popular and doesn’t have bad side effects
I would not due to high risk and long time for approval
The Good health pharmaceuticals companySlide41
Price will go up because materials costs will go up, huge demand and same supply of materials
Put pressure on the company to work quickly, they will need to increase productivity
Huge demand for new homes, they will have to hire more workers and buy more equipment
They will make a lot more money but also have greater expenses for supplies
They will become bigger and more profitable
Price of stock will go up as investors see potential
It would have gone up but not as fast
Yes, they will be making a lot of money
The good house builders companySlide42
High interest rates will make cars more expensive to finance, so demand for Ford cars will decrease
As sales decrease, so will earnings for the company
The company will have to come up with a way to make it cheaper to buy a car, may have to sell more cars overseas where costs are lower
People will sell their shares if sales decrease, so stock prices will go down
Hurt sales and make it more expensive for the company to borrow money to finance the development of new cars or open new showrooms
Yes, they need to find a way to decrease expenses
Stop production on least profitable models, close some plants, or provide lower interest loans to customers
No, they are facing some tough challenges
ford motor companySlide43
Stocks are easily influenced by world events. Select a stock in your portfolio that is most likely to be influenced by the news. Explain how current events may increase or decrease the value of the stock.
In your SMG teams…Slide44
Stock presentation