{"id":892,"date":"2023-07-12T17:57:50","date_gmt":"2023-07-12T17:57:50","guid":{"rendered":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/?post_type=chapter&p=892"},"modified":"2023-07-12T17:59:15","modified_gmt":"2023-07-12T17:59:15","slug":"reading-stocks","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/chapter\/reading-stocks\/","title":{"raw":"Reading: Stocks","rendered":"Reading: Stocks"},"content":{"raw":"\"prices\r\n

The term stock market<\/strong> refers to several exchanges in which shares of publicly held companies are bought and sold. Such financial activities are conducted through formal exchanges and via\u00a0over-the-counter<\/a>\u00a0(OTC) marketplaces that operate under a defined set of regulations.<\/p>\r\n

Both \u201cstock market\u201d and \u201cstock exchange\u201d are often used interchangeably. Traders in the stock market buy or sell shares on one or more of the stock exchanges that are part of the overall stock market.<\/p>\r\n

The leading U.S. stock exchanges include the\u00a0New York Stock Exchange<\/a>\u00a0(NYSE) and the\u00a0Nasdaq<\/a>.<\/p>\r\nValue of a Stock<\/strong>\r\n

The most common way to value a stock is to compute the company's\u00a0price-to-earnings (P\/E) ratio<\/a>. The P\/E ratio equals the company's\u00a0stock price<\/a>\u00a0divided by its most recently reported earnings per share (EPS). A low P\/E ratio implies that an investor buying the stock is receiving an attractive amount of value.<\/p>\r\n

As an example, let's calculate the P\/E ratio for\u00a0Walmart<\/b>\u00a0(WMT<\/a>\u00a00.48%<\/span><\/span>). For its fiscal year that ended Jan. 31, 2023, Walmart reported\u00a0diluted earnings per share<\/a>\u00a0of $4.27. At the time of this writing in April 2023, the company's share price is $151.73.<\/p>\r\n

To obtain Walmart's P\/E ratio, simply divide the company's stock price by its EPS. Dividing $151.73 by $4.27 produces a P\/E ratio of 35.53 for the retail giant.<\/p>","rendered":"

\"prices<\/p>\n

The term stock market<\/strong> refers to several exchanges in which shares of publicly held companies are bought and sold. Such financial activities are conducted through formal exchanges and via\u00a0over-the-counter<\/a>\u00a0(OTC) marketplaces that operate under a defined set of regulations.<\/p>\n

Both \u201cstock market\u201d and \u201cstock exchange\u201d are often used interchangeably. Traders in the stock market buy or sell shares on one or more of the stock exchanges that are part of the overall stock market.<\/p>\n

The leading U.S. stock exchanges include the\u00a0New York Stock Exchange<\/a>\u00a0(NYSE) and the\u00a0Nasdaq<\/a>.<\/p>\n

Value of a Stock<\/strong><\/p>\n

The most common way to value a stock is to compute the company’s\u00a0price-to-earnings (P\/E) ratio<\/a>. The P\/E ratio equals the company’s\u00a0stock price<\/a>\u00a0divided by its most recently reported earnings per share (EPS). A low P\/E ratio implies that an investor buying the stock is receiving an attractive amount of value.<\/p>\n

As an example, let’s calculate the P\/E ratio for\u00a0Walmart<\/b>\u00a0(WMT<\/a>\u00a00.48%<\/span><\/span>). For its fiscal year that ended Jan. 31, 2023, Walmart reported\u00a0diluted earnings per share<\/a>\u00a0of $4.27. At the time of this writing in April 2023, the company’s share price is $151.73.<\/p>\n

To obtain Walmart’s P\/E ratio, simply divide the company’s stock price by its EPS. Dividing $151.73 by $4.27 produces a P\/E ratio of 35.53 for the retail giant.<\/p>\n","protected":false},"author":107,"menu_order":10,"template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-892","chapter","type-chapter","status-publish","hentry"],"part":843,"_links":{"self":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/892","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/users\/107"}],"version-history":[{"count":3,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/892\/revisions"}],"predecessor-version":[{"id":896,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/892\/revisions\/896"}],"part":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/parts\/843"}],"metadata":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/892\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/media?parent=892"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapter-type?post=892"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/contributor?post=892"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/license?post=892"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}