Summary
Highlights
This video will teach you how to research a company's stock using key financial information like previous close price, 52-week range, PE ratio, beta, charts, trends, and company news. We will use Netflix as an example throughout the video.
To find a company's stock quote, use a financial news and information site like Yahoo Finance. Search for the company name and select its ticker symbol to access its stock quote page. Key information to analyze includes previous close, 52-week range, PE ratio, beta, charts, and company news.
Previous close is the stock's closing price from the preceding trading day. Stock market trading hours are Monday to Friday, 9:30 AM to 4:00 PM Eastern Standard Time. For Netflix, if its current price is $97.55 and its previous close was $97.18, you can see the change and percentage change provided by the financial site.
The 52-week range, also known as the year-long range, shows the highest and lowest stock prices over a 52-week period. Consider where the current stock price falls within this range (bottom, middle, or top) to help assess if the stock is peaking or has potential for growth. Visual charts and recent company news, such as new products or industry competition, also provide crucial context.
The PE (Price-to-Earnings) ratio measures a stock's price relative to its earnings (profit), calculated as stock price divided by earnings. It indicates how investors perceive a company's performance and how much they are willing to pay for a dollar of its earnings. When comparing, ensure you contrast companies within the same industry. A low PE can suggest undervaluation or selling pressure, while a high PE can signify investor confidence in future growth or overvaluation.
Beta measures a stock's volatility compared to the overall market, which has a beta of one. A beta less than one indicates lower volatility than the market, while a beta greater than one indicates higher volatility. Netflix, with a beta of 1.25, is considered slightly more volatile than the overall market.
When analyzing stock quotes, consider what you believe is the most important factor: previous close, 52-week range, PE ratio, or beta, and be prepared to explain your reasoning. You should also brainstorm companies you are interested in investing in.