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Navigate the Investment World with Yahoo Finance
The world of investing can be challenging to navigate, especially with the endless amount of data and information at our fingertips. In this blog, I will introduce one easy-to-use platform that is free to access for everyone. Yahoo finance has the financial and stock performance of all public companies. It also has tips on personal finance along with trends and news updates on various markets. Let’s explore the summary features on yahoo finance to help you better assess your investment interests.
Once you navigate to the yahoo finance page, at the top of the page, there is a space bar to help you navigate to any stock. For today’s purposes, we will be using Costco as a demo company. Please type in “COST” (Costco’s ticker symbol) and hit enter.
We will land on the Costco stock summary page. At the top, you’ll see the Costco company name along with its ticker symbol (COST) in parenthesis. Above that is the stock market in which the company is being traded on (please look forward to our upcoming in depth analysis on the various stock markets). Costco is being traded on Nasdaq. The big black numbers indicate the current stock price that the company is trading at ($885.67 when this blog was written). The numbers written in green or red besides the stock price show how much the stock price has gone up (green) or down (red) for the day, with a percentage version in the parenthesis. Below that, it will show whether the market is open or closed. For example, the Nasdaq within which Costco is sold, is open Monday through Friday from 9:30am to 4:00pm EST. The second set of numbers are the after-hours trading prices.
Below the summary page, let’s go through all the key metrics and explore their significance:
Using Costco as an example, we’ve explored how to interpret various key metrics such as the P/E ratio, EPS, trading volume, and more. By understanding these metrics on the stock summary page, investors can gain valuable insights into a company’s performance and make more informed decisions.
Previous Close: the last price Costco shares were sold at before closing for the weekend.
Open: the price the stock price opened up at on the previous day. You might be wondering how the stock price opened up at a higher or lower price than which is closed at. That is because of the after-hours trading.
Bid: the highest price anyone will ask for a security.
Ask: the lowest price anyone will sell a security for. Ideally, investors look to buy shares close to the ask price and sell close to the bid price.
Day’s range: the day’s range shows the highest and lowest prices the stock reached today.
52 week range: the year’s range for stock prices. The stock price in the image above of $885.67 is very close to the high end of the 52 week range at $886.94.
Volume: the number of shares that have been traded today. Large cap companies like Costco typically trade in millions of shares per day.
Avg. volume: the average number of shares traded per day over a period of time, typically 3 months. In the image above, the volume for the trade is much higher than the average volume, meaning today is a great day for Costco with increased interest from investors.
Market cap: the value of the company (392.6B). Calculated by multiplying the price of the share with the number of shares the company has. For Costco, if we calculate backwards, we find that the company has approximately 0.443 billion shares.
PE ratio: PE = price / earnings ratio. It is used to determine the value of the company. The lower the PE ratio, the more the company earns in revenue in comparison to its share price. Higher PE ratios indicate that investors are willing to pay a premium on the share (at a rate that is higher than the actual revenues of the company) because they expect future growth. Since PE ratios are quite difficult to read, many compare PE ratios of companies with their competitors and with the industry average (S&P’s PE ratio) of 24.79. We will further explore PE ratios in future blogs!
EPS: EPS = earnings / share. We want eps to progressively increase as it shows that the company is consistently generating greater profits per share.
Earnings date: public companies must report their earnings to keep investors informed about the company’s financial performance. This date indicates when the company is said to report their next earnings estimates.
Forward dividend and yield: reveals how much the company paid out in dividends in the previous year.
Ex-dividend date: you have to be invested in the company before this date for you to be eligible to receive a dividend.
1y target est.: an estimate of the stock price in a year (created by various analysts)
As you continue to explore and utilize Yahoo Finance, remember to consider these metrics in conjunction with broader market trends and company-specific news. This holistic approach will enhance your ability to make strategic investment choices! Stay tuned for more in-depth analyses and tips in our upcoming blogs, where we’ll delve deeper into stock markets, financial ratios, and other essential investment topics. The Bullish Advisor thanks you for stopping by!