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There are numerous ways to value investments, and many investors prefer a specific valuation method. Yield investing is one way to value a stock by comparing the current price to various factors. Yield by definition means to give way to or produce. There are many ways to measure yield - three common ones are dividend yield, earnings yield and free cash flow yield.
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In the insurance space, accurate predictions of metrics such as ROE are important, and paying a low P/B can help put the odds in investors' favor.
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STRIPS provide an alternative form of bond for fixed-income investors who need definite cash flows at specific times. Read the article to find out how.
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The main purpose of equity valuation is to estimate a value for a firm or security. There are three primary equity valuation models: the discounted cash flow (DCF), cost and comparable approaches. The comparable model is a relative valuation approach and is explained in more detail below.
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Rather than relying solely on net profit figures to evaluate a company's performance, seasoned investors will often look at gross profit and operating profit as well.
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An academic study, published several years after the peak of the dot-com bubble in March 2000, accurately described just how whacky internet valuations grew until the bubble burst. The study's first sentence basically stated that valuations lost touch with reality.
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There are different ways stock traders attempt to profit from market movements. Which of the strategies do you use?
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In the dramatic world of M&As, battleground terms meld with bizarre metaphors to form the language of the game.
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Learn to decipher the secret language of the IPO prospectus report - it can tell you a lot about a company's future.
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What people buy and where they shop can provide valuable information about the economy.
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Appreciate the different methods used to describe how book value is "used up".
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Get a piece of Warren Buffett's profit by using Form 13F to coattail his picks.
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The most common types of price to earnings ratios are forward P/E and trailing P/E. Find out how they differ and the advantages and drawbacks of each.
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Running financial analysis on a company or industry is a key skill every investor must learn and understand how to undertake without which an ineffective financial report and investment recommendation ensues.
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Take a look at how this effective ratio can be influenced by certain critical factors.
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The P/E ratio is a simple tool for evaluating a company, but no one ratio can tell the whole story.
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Look at the big picture when choosing a company - what you see may really be a stage in its industry's growth.
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Learn what pundits mean when they say that stocks are undervalued according to the Fed model.
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We go over the concepts behind the excitement over the most important figure in the stock market.
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Wall Street tends to focus on large cap stocks, leaving other stocks under-followed and undervalued.
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A profit/loss plan helps investors recognize mistakes and invest logically, rather than emotionally.
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If these numbers have you in the dark, these easy calculations should help light the way.
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Discover the key elements of a good long-term investment and how to find them.
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Getting big quickly looks good, but companies can get into trouble when they do it too fast. Find out how to spot this trouble.
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Picking these potential winners is all about sizing up risk. We show you how.
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Goodwill represents an acquisition amount over and above what the purchased firm’s net assets are deemed to be valued at on the balance sheet.
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If a company is strong enough to survive tough times, it is more likely to provide long-term value.
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This straightforward ratio measures whether a company is efficient, money-making or neither.
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Find out how to look at the big picture - even when the market's short-term outlook is less than rosy.
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Learn how to read these formations of horizontal trading patterns.
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Find out how to analyze the way a company spends its money to determine whether there will be any money left for investors.
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This calculation will serve up your portion of the shareholder pie.
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To analyze retail stocks, investors need to be aware of the most common metrics used. Find out what they are.
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ACOs have the components required to securitize. Can your health become an instrument that can be traded?
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Learn how enterprise value can help investors compare companies with different capital structures.
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A company's retained earnings matter. Be investment-savvy and learn how to analyze this often overlooked information.
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Make informed decisions about your investments with these easy equations.
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A careful review of a bank's financial statements can help you identify key factors in a potential investment.
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These metrics can help you better understand the information found on balance sheets.
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These figures can either shed light on a company's performance or skew it. Find out why.
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Calculate whether the market is paying too much for a particular stock.
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Find out how to put this important component of equity analysis to work for you.
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The metrics for the Statement of Cash Flows is best viewed over time.
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Here are some industry-impacting innovations that could potentially belong in the famed Carousel of Progress.
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Understanding and analyzing OCI greatly improves financial analysis, especially for financial companies.
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The tech sector can provide fantastic returns for investors with a little know-how in the field.
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Sometimes positive announcements can mean bad news for a stock. Find out why.
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Learn how to think big by investing in smaller stocks.
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Learn how to capitalize on the predictable behavior of others during breakouts and breakdowns.
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Here are some U.S. companies that have historically competed with one another for market supremacy.
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Often the most attractive companies are also a little fierce - learn how to spot healthy corporate aggression.
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The investing world loves to talk about fundamentals, but do you know what it means?
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From pre-market to after hours, see what you need to do to capture gains quickly.
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Helium is a non-renewable resource in an industry dominated by an unusual infrastructure.
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More common risk theories can lead to missed opportunities. Find out how margin of safety can propel your portfolio.
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Intrinsic value reduces the subjective perception of a stock's value by analyzing its fundamentals.
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The relatively modest amount of time it takes to build these models can pay for itself by leading you to better investment decisions.
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Dividend payments may reveal information about the future prospects of a company.
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Impairment charge is a term for writing off worthless goodwill, but you need to know what its potential impact is on EPS.
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Big-money sponsorship might make a company look good, but it's not always a reliable gauge of stock quality.
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Predicting sales growth can be something of a black art, unless you ask the right questions.
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We outline reasons that may show why enforcing more sell ratings isn't guaranteed to increase Wall Street's objectivity.
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Valuing firms in this sector can seem like a black art, but there is a systematic way to pin a price on potential.
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These income statement red flags may not spell a company's downfall. Learn why here.
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Learn how to correctly analyze a company's liquidity and beat the average investor.
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Discover how companies decide how to spend their cash in a variety of market conditions.
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Learn about the components of the statement of financial position and how they relate to each other.
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Three useful indicators for measuring a retail company's efficiency are its inventory turnaround times, its receivables and its collection period.
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Not sure how to determine your equity allocations? Read about a system that can help.
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Learn one of the most common methods of finding support and resistance levels.
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If these companies are looking for growth and cost-cutting, the best bet might be to look to their main competitors.
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Learn to distinguish between a temporary price change and a long-term trend.
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Video rental customers have gone from using video stores to streaming selections available at home. Here's how it happened.
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Discover some of the contributing factors in determining what stocks are best for day trading.
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There are two possible candidates to be the next Warren Buffett. Find out who it could be.
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This strategic move may just shoot Samsung to an uncatchable spot in the consumer technology sector.
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LinkedIn currently trades for $10 more than its IPO price. Find out if the rise is justified.
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Discover why traders use swing charts, how they construct them and how they use them.
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Companies are increasingly turning to spinoffs for a variety of reasons, including improving performance.
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Discover whether analyst recommendations are really worth listening to.
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Here are two opinions to help you decide if trading earnings announcements will work for you.
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With the fast food market feeling the pressure to offer healthier choices, the industry is being revolutionized.
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Find out what affects the price of silver, the types of investments that can be made and the methods in which it is traded.
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Find out how to build these charts showing buy, sell, stop-loss and take-profit points, and even estimate length of trade.
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Being familiar with composite presentations will help you better assess the quality of an investment manager's performance.
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Facebook intends to grow to a staff of 9,600 over the next few years, which will require a lot of capital.
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Learn about neural networks, which is software designed to simulate the human brain in order to make better trading decisions.
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Health insurance companies work a little differently than most companies. Here's what you need to know as an investor.
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The battle of the burger giants has recently taken a turn after nearly 40 years. Find out why.
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Before investing in gas and oil stocks, consider such factors as political and geological risks.
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Find out if you can build a strategy around the behavior of the market in the presidential cycle.
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Learn about the purpose of the IFRS, as well as its benefits, goals and fundamental difference from the U.S. GAAP.
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The biotech sector is more than just medical research. Read this before you invest.
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New names may be popular, but old tech is still the place to put long-term money. Find out why.
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Here are some ideas to help you identify stocks that have a good chance at making you money.
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This rare metal is being used in the industry more and more. See how you can get exposure.
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Find out if mutual fund managers can successfully pick stocks or if you're better off with an index fund.
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Read between the lines to decipher a company's true financial condition.
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These statistical measurements highlight how to mitigate risk and increase rewards.
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The Department of Justice has warned Apple that it intends to pursue a suit alleging price-fixing.
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