Understanding Share (financial) tables?

Question

Hi,
I'm having difficulties understanding the financial chart for shares. For instance I looked up for Microsfot and found the details below but didn't quiet understand it: I've been to many sites (like investopedia) to understand it but of no help. Could you please go through the details step by step and let me know how to use this data to buy good shares

MICROSOFT CP (NasdaqGS:MSFT) Delayed quote data

Last Trade: 29.23
Trade Time: Nov 14
Change: 0.00 (0.00%)
Prev Close: 29.2285
Open: N/A
Bid: 28.65 x 100
Ask: 29.20 x 100
1y Target Est: 31.26

Day's Range: N/A - N/A
52wk Range: 21.46 - 29.46
Volume: 0
Avg Vol (3m): 56,732,100
Market Cap: 287.33B
P/E (ttm): 23.36
EPS (ttm): 1.251
Div & Yield: 0.40 (1.40%)

Thanks for your help.

Answer 1

Allow me to add just a little bit to the first responder. This data is not very helpful in determining good stocks to buy. The only helpful data presented is the P/E and the dividend and market cap. The pe only tells you how expensive the stock is in relation to its earnings. That is helpful. For example Microsoft is a fairly expensive stock. The average pe of the S&P 500 is around 17, so MSFT is considerably more expensive than the average. The pe is sometimes used in conjuction with the expected growth rate. The pe is divided by the expected growth rate to give a peg ratio. The lower the peg ratio, the better value a stock is considered to be. The only problem is the expected growth rate may not materialize. The market cap tells you the total value people have placed on the company. In general the larger a company the less likely that the company will experience rapid growth but the more likely the company will experience consistantt earnings, with the exception of the U S automotive manufactures.

The target price is a bunch of crap. That is the projected price based on analysts' projections. Most analysts can not find their rears with both hands. If you look at all the analysts ecommendations for a stock you will find them scattered all over the map, from sell to strong buy, with a preponderance of buy recommendations because that is how brokerage firms make their money, selling stocks.

Yahoo finance has a very decent site for researching stocks. If you have an on line stock broker, they will also have research materal. Some more than others. Fidelity, I believe, has the most. Fool.com has a CAPS section where you can find out what 26000 investors think are the best stocks to buy and the worst. I find it very interesting and the basis for further research.

Answer 2

Sure... here we go...

"MICROSOFT CP (NasdaqGS:MSFT) Delayed quote data"
This tells you the name of the company, in this case it's Microsoft Corporation. The next part tells you what exchange it is traded on (or at least what quote this one is coming from in cases where a stock is traded on more than one exchange). In this case, Microsoft is trade on the Nasdaq market. The next part "MSFT" tells you its ticker. The ticker is unique to the security so you don't get confused with similar sounding stocks or related securities. The last part is just to warn you that the price is not current.

"Last Trade: 29.23"
This tells you the latest price the stock traded at. If the market is officially closed, this is the closing price.


"Trade Time: Nov 14"
This tells you what date the last trade was.


"Change: 0.00 (0.00%)"
This tell you the change that the stock had from the previous close in terms of dollars and percent.

"Prev Close: 29.2285"
This is the previous day's close. In this case, a stock can't trade in fractions that small. This is due to an order that had multiple price for smaller amounts of shares, but the trade was recorded as a summation of the number of shares at an average price.


"Open: N/A"
This is the first traded price of the day. Since the market is closed, it is not applicable.

"Bid: 28.65 x 100"
Buyers bid a price that they are willing to sell. Here someone is bidding to pay $28.65 for each for 100 shares. The market is closed, so this price is using an "after-market" ECN like Instinet. After market usually has very few people trading and the bid is often well below the closing price. This small amount is just a backstop in case somebody is dying to sell 100 shares in the aftermarket.

"Ask: 29.20 x 100"
Someone is asking a price of $29.20 to sell their 100 shares. When the bid equals the ask, you have a transaction and shares trade hands.

"1y Target Est: 31.26"
This is a target price for Microsoft shares one year into the future. I am not 100% sure how this is calculated. It might be what the price would be if the Microsoft stayed at the same PE ratio and they earned the consensus of equity analysts.

"Day's Range: N/A - N/A"
This tells you the highest and lowest trade of the day. Since the market is closed, this is not applicable.

"52wk Range: 21.46 - 29.46"
This is the 52-week range lowest and highest closing price.

"Volume: 0"
This is the number of shares that were traded. The market is closed, so this is zero.

"Avg Vol (3m): 56,732,100"
This is the average daily volume that Microsoft has traded over the last three months. The share trades about 57m shares per day.

"Market Cap: 287.33B"
Market capitalization of US$287.33b is equal to the number of outstanding shares multiplied by the current price. It is theoretically how much the whole company is worth (to equity holders).

"P/E (ttm): 23.36"
Price/Earnings ratio for the trailing 12 months = Market Cap / Net Profits over the last 4 quarters. Also, it is price/EPS. This tells you how expensive or inexpensive a stock is. A P/E of 1 means that the company earned 100% of its market cap in earnings last year. This compares to a stock that trades at 40x P/E, which will take 40 years to make is market cap back in earnings (assuming no growth).
Most people look at future P/E, but that needs some estimation since nobody knows exactly what the company will earn in the future.

"EPS (ttm): 1.251"
Earnings per share for the trailing 12 months.

"Div & Yield: 0.40 (1.40%)"
This is the dividend the company paid out last fiscal year and yield (dividend/current price). Yield makes it easier to compare against bonds.