| Earnings Per Share, And Price/Earnings
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| | results in a ratio ranging from 10 to
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| Ratio Two Tools For Determining Stock
| |
| | 15, with a few undervalued stocks hitting
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| Viability
| |
| | 7 to 8 years. One of the hallmarks of
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| There is far more to owning a stock than
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| | the dot-com boom was the absurdly high
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| its share price, even if it's the share
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| | price/earnings ratios some shares of
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| price that gets all the coverage in the
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| | stock were selling at P/E ratios of 100
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| financial press. A share price only
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| | or more, during the '90s.
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| shows the price to buy the stock, or how
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| | One thing to be aware of is that there
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| much you can theoretically sell it for,
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| | are multiple ways of calculating earnings
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| but it does little to convey how much
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| | per share; they all boil down to set
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| value is retained from holding the stock
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| | asides of funds that are paid out before
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| for the long term.
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| | earnings are divided up between shares.
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| The key to determining long term value in
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| | If you have any questions about how
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| a stock is it's price/earnings ratio.
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| | earnings per share are calculated for a
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| Price/earnings is, in essence, the price
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| | stock you hold, ask your broker for more
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| of a share, divided by the earnings per
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| | information.
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| share. Earnings per share is calculated
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| | The key to earnings per share is that by
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| by dividing the total profits (less
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| | holding a share of a company, you are, in
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| operating expenses, and preferred stock
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| | theory, holding a piece of a corporation
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| dividends) by the number of outstanding
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| | with a retained value, and you aren't
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| shares in circulation.
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| | speculating on the price going up
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| When looking at price/earnings ratio, a
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| | indefinitely. One method of maximizing a
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| handy rule of thumb is to try to
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| | good PE ratio stock with a stable price
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| calculate how many years of earnings
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| | is to invest in a dividend purchasing
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| would one share have to accumulate to
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| | plan in essence, you're telling the
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| match the price it was originally
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| | company to reinvest your dividends into
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| purchased at. In most companies, this
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| | new shares of the stock.
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