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Where Are the Investment Markets Moving Now?
Some of the market participants call the current situation a “crisis” others are starting to be convinced that we are in a bear market. While others just don’t know how to call it. Well, I call
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Valuation Multiples
Valuation multiples are stock ratios that include in the calculation share price and show whether stock is cheap or expensive compared to similar stocks. Valuation multiples (or just multiples) ar
http://www.investingforbeginners.eu/valuation_multiples
P/E Ratio
P/E ratio is the most popular valuation multiple that is used for stock analysis. This ratio shows the price of the stock compared to its earnings. The multiple is so popular because of its simplicity and im
http://www.investingforbeginners.eu/p_e_ratio
stock valuation
stock valuation is very important part of investing in stocks, and this part is the most time consuming and knowledge requiring. stock valuation is a necessary and main step at stock picking process. The only way
http://www.investingforbeginners.eu/stock_valuation
Relative Valuation
Comparative analysis Relative valuation is stock valuation method that gained its popularity because of simplicity and practical importance. The key principle of relative valuation is about valuation multi
http://www.investingforbeginners.eu/relative_valuation
DCF Valuation
Discounted Cash Flow Analysis DCF valuation might be applied to any asset that generates positive free cash flow or is expected to generate that cash flow in the future. DCF valuation might be directly applied t
http://www.investingforbeginners.eu/dcf_valuation
Replacement Cost Valuation
Replacement cost valuation method is not very popular at stock valuation. Most of the investors are picking stocks with help of relative valuation or DCF valuation. Only when those two methods aren’t possib
http://www.investingforbeginners.eu/replacement_cost_valuation
CAPM
CAPM (Capital Asset Pricing Model) is method widely used for equity cost calculation. Equity cost should show the return that investor should expect/seek from an investment that contains specific level of risk.&n
http://www.investingforbeginners.eu/capm
Earnings Per Share
Earnings per share (EPS) shows how much of net earnings are allocated to one common share. EPS might give some guidance about the value of the share for shareholder. Share price compared to EPS is equal to P/E ra
http://www.investingforbeginners.eu/earnings_per_share
ROE
ROE (Return on Equity) shows profitability of company’s book value. Company’s book value (equity) is equal to company’s assets less liabilities, and ROE is usually higher if company ha
http://www.investingforbeginners.eu/roe
Outstanding Share Number
Outstanding share number is an important characteristic for the stock value of every stock company. This number represents all the issued shares in the company except the shares that are held by the company itsel
http://www.investingforbeginners.eu/outstanding_share_number
Valuation Methods
There are three main valuation methods used for business valuation or stock valuation: Relative valuation is very easy to use and is the fastest method. That is why this method is so popular among fina
http://www.investingforbeginners.eu/valuation_methods
Company Valuation
Company valuation is the same as business valuation. The only difference between company valuation and business valuation may occur if value of company’s stocks has to be determined instead of the whole bus
http://www.investingforbeginners.eu/company_valuation
Investment Fund Management
Investment fund management is not much different from simply investment management or asset management. Investment fund is large investment portfolio and the composition of that portfolio depends on particular fu
http://www.investingforbeginners.eu/investment_fund_management
Investors ABC
Investor’s ABC includes all the main topics that are necessary for every investor to avoid the most popular failures in investing and to achieve good investment results. If you want to be rea
http://www.investingforbeginners.eu/investors_abc
Investment Management Process
Investment management process has several functions: Macroeconomics analysis and estimates Research of industry sectors Security picking Asset allocation Market timing Financial news covering Securitie
http://www.investingforbeginners.eu/investment_management_process
Undervalued Stocks
Undervalued stocks are called those stocks that are believed to have higher target price than their stock price on the exchange. The higher is the difference the more stock is undervalued. If stock price in the m
http://www.investingforbeginners.eu/undervalued_stocks
Overvalued Stocks
Overvalued stocks are those stocks that cost in stock market more than their target price is. Target price of the stock is calculated market value of a stock using stock valuation methods. The most popular method
http://www.investingforbeginners.eu/overvalued_stocks
Net Income
Net income (net profit) is a financial indicator of the company that shows the real profitability of the business in accordance to its capital structure. Net income is equal to all revenue and gains less all expe
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Financial Analysis
Financial analysis is an important part of investing, especially if investor wants better results from his investments. Of course it is possible to ignore financial analysis and make investment decisions based on
http://www.investingforbeginners.eu/financial_analysis
Investment Formula
If you are looking for some perfect investment formula, you should get disappointed because there is no secret investment formula that would be profitable for every investor. If there would be such perfect formul
http://www.investingforbeginners.eu/investment_formula
Financial Ratios
Financial ratios are ratios that are used in financial analysis or in other words that are using financial data of a company. Such financial data usually is found in financial statements (income statement, balanc
http://www.investingforbeginners.eu/financial_ratios
Fundamental Analysis
Fundamental analysis is the type of financial analysis that relies on company’s fundamentals. Those fundamentals depend on the target of the analysis. For example, fundamental analysis of stock depends on i
http://www.investingforbeginners.eu/fundamental_analysis
Market Risk Premium
(Equity Risk Premium) Every investment carries some level of risk and some level of potential return. Those two measures are closely related in investment finance and are used in CAPM which calculates cost of eq
http://www.investingforbeginners.eu/market_risk_premium
