Pick up the financial section of any major newspaper or log onto a financial site online and you’ll find a stock market report. This report details the performance of hundreds of stocks in various exchanges, including the New York Stock Exchange and Nasdaq. In order to condense a lot of information into a small space, stock market reports use abbreviations and codes. Learn to decipher these codes and read the report and you can track the performance of stocks you own on stocks you’re interested in purchasing.
Find the stock symbol. Stocks are listed by symbols, in alphabetical order. You can learn the symbol of the stock by visiting the company website. The stock symbol may or may not be in the first column of the report, depending on the format used by the publication or website which publishes the report.
Read across the line until you come to the column labeled Close. This is the price of the stock at the close of business the previous day. A real-time report online may have a column labeled Last Trade. This shows the current price of the stock if you traded it right this minutes.
Find the column labeled Change. This is usually right next to the Close or Last Trade information. Some reports include an arrow next to this column. The arrow will point up or down, indicating the direction of the change. The number in the change column indicates how much the price of the stock has changed from the previous day or the previous trade. This helps you determine if the price of the stock is increasing or decreasing.
Note the number in the column labeled Volume. This is the number of shares of the stock traded the previous day (for a stock report in a newspaper) or that day (for a real-time report online or on television). Volume is one indicator of interest in a stock, and in volatility. A stock with a lot of shares traded is one in which investors have a great deal of interest. Some reports will employ an asterisk or underline to indicate stocks that are trading at a higher volume than usual.
Find the columns labeled YTD%Chg. and 52-wk High and 52-wk Low. These columns indicate the percentage increase or decrease in the stock’s value so far this year, and the highest price and lowest price for the stock in the past year. These numbers give you an indication of whether the stock is trending up or down, gaining or losing.
Scan across the line until you come to the column labeled PE. PE stands for price to earnings ratio, which is the price of the stock as a ratio of the company’s per-share earnings for the last quarter. A high PE can be one indication of investors’ confidence in the company’s performance, but other factors can affect PE, including whether or not the company is a start-up, performance of the industry as a whole, and even the company’s accounting methods. Use PE as the starting point for doing more investigation into the company.
Lay a ruler across the report to make it easier to read across the lines.
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