The price of the last trade, called the closing price, gets quoted in the papers the next morning.
A lot of information is packed into a single line.
365-Day High-Low
62 - 37
Stock
Disney
Div
0.36
Yld %
0.625
P/E
23
Sales
11090
High
57
Low
56
Last
57
Chg
+1
So, in the last 12 months, there's a wide range of prices that people will pay for the same stock
- In fact, the average stock on the NYSE moves up and down approximately 57 % from its base price in any given year.
- More incredibe than that, one in every three stocks traded on the NYSE moves up and down 50 to 100 % from the base each year, and about 8% of the stocks rise and fall 100% or more.
- That's a 100% move: from $16 to $8.
- Clearly , some investors pay a lot less than others for the same company in the same year.
In the 4 columns:"High," "Low," "Last," and "Chg"(Change), you get a recap of what happened in yesterday's trading.
- In this case, nothing much.
- The highest price anybody paid for Disney during this particular session was $57, and the lowest was $56, and the last sale of the day was made at $57.
- That was the closing price that everybody was looking for in the newspaper.
- It was up $1 from the closing price of the day before, which is why +$1 appears in the "Chg" column.
"Div" stands for dividend. Dividends are a company's way of rewarding the people who buy their stock. Some companies
- pay big dividends,
- some pay small dividends, and
- some pay no dividend at all.
The number shown 0.36 means "thirty-six cents." That's Disney's current annual dividend - you get 36 cents for each share you own.
"Yld% (Yield), gives you more information about the diividend, so you can compare it, say to the yield from a savings account or bond. Yield = curren dividend divided by the closing stock price.
- The result is 0.625 % - the return you're getting on your money if you invest in Disney at the current price.
- This 0.625% is a very low return, as compared to the 3% that savings accounts are paying these days.
- Disney is not a stock you'd buy just for the dividend.
P/E is the abbreviation for "price-earnings ratio." You get the P/E ratio by dividing the price of a stock by the company's annual earnings. The P/E can be found in the paper every day.
- When people are considering whether to buy a particular company, the P/E helps them figure out if the stock is cheap or expensive.
- P/E ratios vary from industry to industry, and to some extent from company to company, so the simplest way to use this tool is to compare a company's current P/E ratio to the historical norm.
In today's market, the P/E of the average stock is about 16, and Disney's P/E of 23 makes it a bit expensive relative to the average stock.
- But since Disney's P/E ratio has moved from 12 to 40 over the past 15 years, a P/E of 23 for Disney is not out of line, historically.
- It is more expensive than the average stock because the company as been a terrific performer.
Finally,l there's "Sales": (Volume) the number of shares that were bought and sold in yesterday's session at the stock exchange.
- You always multiply this number by 100, so the 11,000 tells us that 1.1 million shares of Disney changed hands.
- It's not crucial to know this, but it makes you realize that the stock market is a very busy place.
Thanks to home computers, electronic tickertape and other technologies, people no longer have to wait for tomorrow's newspaper to check their stocks. All this technology has a drawback: It can get you too worked up about the daily gyrations.
- Letting your emotions go up and down in sympathy with stocks can be very exhausting form of exercise, and it doesn't do you any good.
- Whether Disney rises, falls, or goes sideways today, tomorrow, or next month isn't worth worrying about if you are a long-term investor.
