Glossary

 

1. 52-Week High/Low - The highest and lowest price at which a stock has traded in the past 12 months, or 52 weeks.

2. Annual Report - An annual publication that public corporations must provide to shareholders to describe their operations and financial conditions.

3. Bear Market - A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining. A downturn of 20% or more over at least a two-month period is considered an entry into a bear market.

4. Blue-Chip Stock - Stock of a well-established and financially sound company that has demonstrated its ability to pay dividends in both good and bad times. These stocks are usually less risky than other stocks.

5. Bull Market - A financial market in which prices are rising or are expected to rise. The term "bull market" can be applied to anything that is traded, such as bonds, currencies and commodities.

6. Dividend Payout Ratio - The percentage of earnings paid to shareholders in dividends, calculated as; Yearly Dividend per share/Earnings per share.

7. Earnings Per Share - EPS - The portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serve as an indicator of a company's profitability. Its calculated as (Net Income - Dividend)/Total Outstanding shares.

8. Fundamental Analysis - A method of evaluating a security that entails attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors. Fundamental analysts attempt to study everything that can affect the security's value, including macroeconomic factors (like the overall economy and industry conditions) and company-specific factors (like financial condition and management).

9. Initial Public Offering - IPO - The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.

10. Interim Dividend - A dividend payment made before a company's AGM and final financial statements. This declared dividend usually accompanies the company's interim financial statements.

11. Market Capitalization - The total market value of a company's outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determining a company's size. Frequently referred to as "market cap".

12. Minority Interest - A non-current liability that can be found on a parent company's balance sheet that represents the portion of its subsidiaries owned by minority shareholders.

13. Net Margin - The ratio of net profits to revenues that shows how much of each amount earned by the company is translated into profits (typically expressed as a percentage). Net margins can be calculated as: Net Margin = Net Profit/Revenue.

14. Ordinary Shares - Any shares that are not preferred shares and do not have any predetermined dividend amounts. It represents equity ownership in a company and entitles the owner to a vote in matters put before shareholders in proportion to their percentage ownership in the company.

15. Payout Ratio - The amount of earnings paid out in dividends to shareholders. Investors can use the payout ratio to determine what companies are doing with their earnings. Calculated as; Payout Ratio = Dividends Per Share/Earnings Per Share.

16. Preferred Stock - A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights. Also known as "preferred shares".

17. Price-To-Book Ratio - P/B Ratio - A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share. Also known as the "price-equity ratio".

18. Price-Earnings Ratio or P/E Ratio - A valuation ratio of a company's current share price compared to its per-share earnings. Calculated as; Market Value per share / Earnings per share.

19. Profit - A financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs and taxes, needed to sustain the activity. Calculated as; Profit = Total Revenue - Total Expenses

20. Ratio Analysis - A tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, the industry, or even the economy to judge the performance of the company.

21. Stock - A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings. Also known as "shares" or "equity". There are two main types of stock: common and preferred.

22. Technical Analysis - A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity.

23. Trailing - A term used to describe the most recent time period. Most often used term is "trailing 12 months", denoted by the acronym "TTM".

24. Yield - The income return on an investment. This refers to the interest or dividends received from a security and are usually expressed annually as a percentage based on the investment's cost, its current market value or its face value.