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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 ...
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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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Large amounts of debt can cause businesses to become less competitive and, in some cases, lead to default. To lower their risk, investors use a variety of leverage ratios - including the debt, debt-to-equity and interest coverage ratios - to identify firms with unhealthy debt levels.
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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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Weighted average cost of capital may be hard to calculate, but it's a solid way to measure investment quality
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Pairs traders wait for weakness in the correlation, and then go long on the under-performer while simultaneously going short on the over-performer, closing the positions as the relationship returns to its statistical norm.
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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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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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Goodwill is more than just benevolence - it also refers to an accounting term frequently used in M&A. Learn more about it here.
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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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Learn more about this method used in inequity valuation and corporate finance.
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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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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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To analyze retail stocks, investors need to be aware of the most common metrics used. Find out what they are.
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This calculation will serve up your portion of the shareholder pie.
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Learn about this metric that measures a company's financial performance based on its residual wealth.
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Find out how and why this performance metric is so valuable in analyzing stock.
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Learn how enterprise value can help investors compare companies with different capital structures.
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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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A company's retained earnings matter. Be investment-savvy and learn how to analyze this often overlooked information.
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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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Make informed decisions about your investments with these easy equations.
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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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Find out how to put this important component of equity analysis to work for you.
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CAPM is a model that describes the relationship between risk and expected return.
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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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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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