ChatterBank1 min ago
Stocks and Shares......... HELP
6 Answers
My son is 15 yrs old and is doing a GSCE Business Studies Course, his assignment is for him to have a VIRTUAL �5,000 and put this in stocks and shares or in just one Company. We need help and advice if at all possible as to which Comapny/Companies are good at the minute to "buy" shares. He also needs to check on a daily basis how his shares are doing, whether they are increasing or decreasing in value, how or which website would he be able to check these? Any replies would be most appreciated and thanking you in advance.
Answers
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Well there is the FTSE 100.
http://www.moneyextra.com/stocks/ftse100/
The coloured arrows relate to whether they've gone up or down.
If he clicks on the company initials (underlined in blue) there is more info including a graph as to how the company is going.
If he invests in a prominent company he is more like to be able to find updates in the financial sections of newspapers. Someone he knows for the interest such as British Airways, Barclays, Tesco, Sainsburys, Morrisons.
He could have a look at the financial times for some information too.
He also needs to decide his risk strategy, whether to go high risk in an up and down company or play it safe.
http://www.moneyextra.com/stocks/ftse100/
The coloured arrows relate to whether they've gone up or down.
If he clicks on the company initials (underlined in blue) there is more info including a graph as to how the company is going.
If he invests in a prominent company he is more like to be able to find updates in the financial sections of newspapers. Someone he knows for the interest such as British Airways, Barclays, Tesco, Sainsburys, Morrisons.
He could have a look at the financial times for some information too.
He also needs to decide his risk strategy, whether to go high risk in an up and down company or play it safe.
Some up to date info here..
http://www.telegraph.co.uk/money/
Have copied and pasted some selected info from www.thisismoney.co.uk which may help...
Here's some basic questions to ask about a company you're interested in:
Is it in a sector you think will do well? What are your reasons for thinking this?
Does the company offer something unique, or are there many competitors in the same field?
What kind of track record does the company have to date?
Is the company growing? (Look at its year-on-year performance figures)
How much cash does it have in the bank?
If it is not yet in profit, is it at least increasing its revenues in a healthy way?
Is it showing growth in the dividends it pays out?
How highly valued is it? (The price-earnings ratio is one measure of this - see earlier explanation). Is this based largely on future expectations or on past performance?
How volatile is the share price? (Study its share price charts over different periods)
How is the company viewed by City analysts, the press and other commentators?
Is it considered to be a high-growth, high-risk sort of company, or stable and slow-growing?
Price-to-earnings ratios
The primary tool is to compare a company's share price with its earnings, known as the price to earnings ratio or p/e. This is done by dividing a company's price with its earnings per share (EPS). Cheaper companies have lower p/e ratios.
However, p/e ratios should be compared only within sectors because some areas of the stock market are more expensive than others with good reason. For instance, a technology company may enjoy a rating of 70 because of its future earning potential but a more mundane utility with little growth opportunities might have a rating of just 10. That does not necessarily m
http://www.telegraph.co.uk/money/
Have copied and pasted some selected info from www.thisismoney.co.uk which may help...
Here's some basic questions to ask about a company you're interested in:
Is it in a sector you think will do well? What are your reasons for thinking this?
Does the company offer something unique, or are there many competitors in the same field?
What kind of track record does the company have to date?
Is the company growing? (Look at its year-on-year performance figures)
How much cash does it have in the bank?
If it is not yet in profit, is it at least increasing its revenues in a healthy way?
Is it showing growth in the dividends it pays out?
How highly valued is it? (The price-earnings ratio is one measure of this - see earlier explanation). Is this based largely on future expectations or on past performance?
How volatile is the share price? (Study its share price charts over different periods)
How is the company viewed by City analysts, the press and other commentators?
Is it considered to be a high-growth, high-risk sort of company, or stable and slow-growing?
Price-to-earnings ratios
The primary tool is to compare a company's share price with its earnings, known as the price to earnings ratio or p/e. This is done by dividing a company's price with its earnings per share (EPS). Cheaper companies have lower p/e ratios.
However, p/e ratios should be compared only within sectors because some areas of the stock market are more expensive than others with good reason. For instance, a technology company may enjoy a rating of 70 because of its future earning potential but a more mundane utility with little growth opportunities might have a rating of just 10. That does not necessarily m
Even within sectors other factors can explain wildly differing ratios. Among retailers, for example, M&S tends to command a ratio double the sector average. That is because investors rate the company's brand and customer loyalty so highly. The p/e ratio, however, can be a useful guide.
Yield
Another measure of whether a stock is fully valued is a company's yield. This is the dividend paid per share divided by the share price (in pounds rather than pence). It works in reverse to p/e ratios � the higher the yield, the cheaper the stock. However, because dividends are set by a company board, they are less accurate than p/e ratios based on exact earnings.
Both sets of figures appear in most broadsheet newspapers but yields appear more frequently.
PEG ratios
To take measurement of value a step further, investors must look at price to earnings to growth, known as PEG ratios. These measure a company's value at present against how quickly it may grow in the future. It is calculated by dividing the p/e ratio by forecast EPS growth.
So a company with a p/e of 20 and expected earnings growth of 10% would have a PEG of two.
As with p/e ratios, the lower the PEG ratio the cheaper the shares.
There are various other more complex ways of measuring a stock�s fair value. But there are simpler ways to predict price movements.
Yield
Another measure of whether a stock is fully valued is a company's yield. This is the dividend paid per share divided by the share price (in pounds rather than pence). It works in reverse to p/e ratios � the higher the yield, the cheaper the stock. However, because dividends are set by a company board, they are less accurate than p/e ratios based on exact earnings.
Both sets of figures appear in most broadsheet newspapers but yields appear more frequently.
PEG ratios
To take measurement of value a step further, investors must look at price to earnings to growth, known as PEG ratios. These measure a company's value at present against how quickly it may grow in the future. It is calculated by dividing the p/e ratio by forecast EPS growth.
So a company with a p/e of 20 and expected earnings growth of 10% would have a PEG of two.
As with p/e ratios, the lower the PEG ratio the cheaper the shares.
There are various other more complex ways of measuring a stock�s fair value. But there are simpler ways to predict price movements.
Even professional fund managers uaually get it wrong - most underperform a basic tracker fund where no active decisions are made.
I would say buy companies you know or like, shops you use or a football club or something like that. At least then you'll be interested in how they are doing.
www.ft.com has loads of info and you can watch prices there.
I would say buy companies you know or like, shops you use or a football club or something like that. At least then you'll be interested in how they are doing.
www.ft.com has loads of info and you can watch prices there.
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