Net profits. Called earnings. Think about it. What increases the capital of a company? What are you buying with the price you pay for the stock? All possible good reasons to buy a stock come from the earnings. And then how exactly you use the number. Definitely look at it as a earnings per share (EPS). Yes, do compare with the price - the P/E ratio. But more importantly look at the trends of developing of the earnings either on a graph (or table) of EPS or simply as net earnigs (for example in the income statements).
Very very importantly see how this trend (possibly going up nad accellerating) compares with other comaonies especialy one in the same industry and/or sector.
2007-01-23 13:44:46
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answer #1
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answered by investor 2
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Earnings. The stock price is actually determined by earnings.
This guy above said p/e ratio. Disregard that because unless you know how to use the p/e ratio the right way (that is to compare and contrast with historical data such as other p/e ratios in the
same industry) it will serve no purpose to you and instead confuse you.
It is without a doubt earnings. No earnings and all else is obsolete
as the stock will tank.
2007-01-23 13:31:20
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answer #2
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answered by desolate_misanthrope 2
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Sorry but there is no ONE best thing. There are many things to consider. Why? Because no one measure or standard will tell you whether buying the stock will likely give good results.
2007-01-23 13:30:37
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answer #3
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answered by DelK 7
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P/E Ratio. It tells the value and there is a forecasted future value. anything under 20 is healthy.
2007-01-23 13:29:58
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answer #4
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answered by Anonymous
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I told someone else about this site and they liked it too. lots of information http://www.thestockfather.com its like $20 for some books but its worth it. we both learned a lot from them
2007-01-23 14:00:35
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answer #5
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answered by ibfa7 2
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it depends on what kind of stock you are talking about
hogs,cows or chickens
2007-01-23 13:37:16
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answer #6
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answered by Anonymous
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