Stock buyback is a transaction whereby a company repurchase its own share from market at a fixed price. Due to this process, the number of outstanding shares reduces resulting higher earning per share (EPS) and return on equity for shareholders. Stock buyback is also known as share repurchase. Stock buyback is not mandatory for the … Read More » "What is Stock Buyback or Share Repurchase – is it good for investors?"
One of the most popular ways to categories stocks is based on its market capitalization as it defines the size of the company. Even mutual fund schemes are divided based on in which type of company they invest. Before knowing the difference between small cap, midcap and large cap, you must understand how market capitalization … Read More » "Difference between Small cap, Midcap and Large cap stocks"
Every stock has two prices: the intrinsic value and the market value. Value investing is an investment strategy in which investors buy stocks that is trading at a price lower than the estimated intrinsic value. Intrinsic value is known as the company’s true worth. Whereas, market value is the price which other people are willing … Read More » "What is value investing in the stock market and how it works"
Margin of safety in investing is first introduced by Benjamin Graham and then followed by many value investors including Warren Buffet. As per margin of safety principle, value investor should purchase stocks when their market price is lower than their estimated intrinsic value. The difference between estimated intrinsic value of a stock and its current … Read More » "What is margin of safety in investing – Explained with examples"
A company can be classified as private or publicly listed based on whether it’s stocks can be traded in financial markets or not. Organizations whose shares are traded in the financial markets (stock exchanges) are known as publicly listed companies. Organizations whose shares can’t be traded in the financial market is referred to as a … Read More » "Private company versus publicly listed company – what is the difference"
It’s important to carefully research fundamentals of every company in which you are planning to invest or invested to know its true value. In this article we will be discussing how an investor can sense when a stock is overvalued or undervalued by using Price to earnings or P/E ratio. Before we start, let us … Read More » "How to sense when stock is overvalued or undervalued by using P/E ratio"