A stock quote is a compact representation of all the relevant pieces of information attached to a stock. They can be accessed either in newspapers or online. Irrespective of the source, most stock quotes always describe a few basic parameters concerned with a stock. Following is a stock quote of American Express Co. taken from Yahoo Finance. This post draws meaningful inferences out of a stock quote.
Each stock quote contains the name of the company whose stock is under consideration along with the ticker symbol (AXP). Below the ticker symbol is the name of the stock exchange on which the stock is listed (NYSE in this case). The number in bold represents the price at which a single share of a particular share sold at. It is also known as last trade. The arrow represents the direction of change in price. An upward green arrow symbolises an increase in the price of stock while a downward red arrow indicates a decrease in its price. The increase and decrease are calculated between the last trade price and the price just before that. The percentage value of the magnitude of change in prices can also be seen at the top of the stock quote. The various terms are explained below:-
Previous Close- The previous trading day’s last trade price recorded during official trading hours.
Bid– The highest price currently being offered for a block of stock.
Ask– The lowest price currently being asked for a block of stock.
1y Target– The analyst’s projection of the price of the stock one year from today.
Day’s Range– The difference between the highest selling price the stock has achieved and lowest selling price the stock has fallen to during the official trading day.
52 Week Range– The difference between the highest selling price the stock has achieved and the lowest selling price the stock has fallen to during the official trading hours during the most recent 52 week period
Volume– The total number of shares of the stock traded on the listing exchange during the current trading day.
Average Volume- The number of shares of the stock traded on the listing exchange during a specified time (3 months in this case).
Market Cap– The market capitalization is the total market value of a public company. It is obtained by multiplying the price per share by the total number of shares outstanding. Companies with a market cap greater than $10 billion are classified as large-cap, the ones with the market cap between $2 billion and $10 billion are called as mid-cap and those with less than $2 billion are referred to as small-cap.
P/E Ratio– A ratio calculated by dividing the price of a stock by the reported actual earnings per share of the issuing company. It is an indicator the amount an investor needs to invest in a particular stock in order to receive $1 of the company’s earnings.
Earnings Per Share (EPS)– EPS represents the portion of a company’s profit allocated to each outstanding share of common stock. It is usually reported quarterly and yearly. It is calculated using the following formula: –
EPS = (Profits – Dividends)/No. of shares outstanding
Div. & Yield– A dividend is a payment that a company pays to its shareholder based on its profits.
Dividend Yield = (Annual dividend per Share)/Price per share