Investment Terminology: 16 Key Terms Club Members Should Know
This is the next stop on our financial literacy tour.
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In recent Action Alerts PLUS Alerts, we've shared with members key items of interest when it comes to investing and financial literacy.
We discussed examining a company's income statement as well as its balance sheet and statement of cash flows. We also reviewed basic items when it comes to dividends.
With that base built, we'll now move to investing terminology, before wrapping up this week of boosting member financial literacy by reviewing the valuation metrics we use to examine contenders for the Action Alerts PLUSportfolio as well as keep tabs on its current holdings.
Beta
Beta is the monthly price change of a particular company relative to the monthly price change of the S&P 500. We previously did a deep dive on beta, which you can find here.
52-Week Change
The percentage change in price from 52 weeks ago.
52-Week High
This price is the highest price the stock traded at in the last 12 months. This could be an intraday high.
52-Week Low
This price is the lowest price the stock traded at in the last 12 months. This could be an intraday low.
50-Day Moving Average
A simple moving average calculated by dividing the sum of the closing prices in the last 50 trading days by 50.
200-Day Moving Average
A simple moving average calculated by dividing the sum of the closing prices in the last 200 trading days by 200.
Fiscal Year
The date of the end of the firm's accounting year. For most companies, this tends to match the end of the calendar year, but there are those, like retail companies, whose fiscal year end may end in January. We have to factor this into our thinking when comparing EPS from different companies so we can have an apples-to-apples comparison. This is what has given rise to and leads us to focus on calendarized EPS.
Most Recent Quarter
Date for the most recent quarter-end for which data is available on the Key Statistics page. This period is often abbreviated as "MRQ."
Average Volume (3 month)
This is the average daily trading volume during the last 3 months. We tend to utilize this metric when evaluating a portfolio contender's liquidity.
Average Volume (10 day)
This is the average daily trading volume during the last 10 days.
Shares Outstanding
This is the number of shares of common stock currently outstanding-the number of shares issued minus the shares held in treasury. This field reflects all offerings and acquisitions for stock made after the end of the previous fiscal period.
Float
This is the number of freely traded shares in the hands of the public. Float is calculated as Shares Outstanding minus Shares Owned by Insiders, 5% Owners, and Rule 144 Shares.
Shares Short
This is the number of shares currently borrowed by investors for sale, but not yet returned to the owner (lender).
Short Ratio
This represents the number of days it would take to cover the Short Interest if trading continued at the average daily volume for the month. It is calculated as the Short Interest for the Current Month divided by the Average Daily Volume.
Short % of Float
Number of shares short divided by float.
Shares Short Prior Month
Shares Short in the prior month. See Shares Short.
For more on short positions, you should visit our prior discussion with members, which you can find here.
Action Alerts PLUS has no position in any stocks mentioned.