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Saturday, July 30, 2011

Operating Profit Margin Ratio Analysis

Operating Profit Margin (also known as EBIT to sales ratio, return on sales, or operating margin) is a type of profitability ratio used to measure the Operating Profit in relation to the Net Sales. A higher ratio is better because it indicates that the company can keep its costs under control (with lower fixed cost). It can also mean that sales are increasing faster than costs.

Formula:

Wednesday, July 27, 2011

Return on Capital Employed Calculation

The Return on Capital Employed (ROCE) is used as a measure of the net profit generated from the long-term capital invested in the firm. The ratio is expressed in percentage terms as follows:

ROCE = [(Net profit before interest and taxation) / (Share capital + reserves + long term loan)] *100%

Learn how to calculate ROCE with the following example:

COO Ltd has the following information:
$1

A Novice's Guide to Penny Stocks

Penny stocks are low priced and highly speculative stocks that are very risky. They are generally issued by start-up companies with little track record in revenues and earnings. This type of stocks is very popular among small speculators because of its low prices and high earning potentials.

Most penny stocks are not traded on the stock exchange market such as the American Stock Exchange, the

Tuesday, July 26, 2011

Evaluating Potential Stock Investments

There are numerous factors to take into account when evaluating a potential stock investment opportunity. Investors should do proper research on every aspect of the stock market. Relevant ratios (such as ROE, P/E, etc.) need to be interpreted and specially looked in detail. You should know how to apply fundamental analysis to evaluate potential investments for both growth and value.

Some of the

Characteristics of Preferred Stock

Like common stock, preferred stock offers partial ownership in a corporation. Preferred stocks may be participating or non-participating, convertible or non-convertible, cumulative or non-cumulative, redeemable or non-redeemable, or a combination of these features.

Following are some of the main characteristics of preferred stock:

1) Preferred stock has a fixed rate of dividend, which is

5 Reasons to Buy Penny Stocks

Penny stock investing involves significant risks but many people prefer to trade penny stock because of its many advantages over other types of investment.

Following are the main reasons why you should buy penny stocks:

1) Penny stock investing is affordable and easy. It does not require a large initial capital investment, meaning that you can buy more shares with little money invested. For

Monday, July 25, 2011

Characteristics of Bonds

Bonds are known as fixed income or fixed interest securities because the interest payments are fixed in advance and paid on a regular schedule.

Following are the main characteristics of bonds:

1) A bond is a type of security that gives the holder a financial claim on the issuing company. When you invest in bonds, you are loaning money to the issuer, and you are entitled to receive regular

Why Buying High Priced Stocks Work Well

Owning a high-priced stock may imply that you have a very high-quality company stock. You can still make a good return if the stock is in an upward trend during the growth phase.

Instead of buying low and selling high, some investors are attempting to "buy high and sell higher" when the high priced stock is on the move. Of course, investors should develop their own way of determining when to

Stockbrokers Botswana

Established in 1989, Stockbrokers Botswana is a reputable and leading stockbroking house in Botswana. The company was instrumental in the establishment of the Botswana Stock Exchange (BSE) and has been involved in every main board equity listing on the BSE since inception.

Stockbrokers Botswana has established strong relationships with domestic institutional and individual investors, and the

Sunday, July 24, 2011

How to Find Good Penny Stocks to Invest In

Penny stocks/shares are seen as a high risk investment vehicle, but can also be very profitable if you use quality services and resources to find good penny stocks to invest in.

First you should look into the company's financial position and performance, its share structure, operations, growth prospects, etc. Just like buying other stocks, you need to understand everything about the company. It

Characteristics of Common Stock

Stock represents the basic form of ownership of a corporation. It can be broadly classified as common and preferred stocks.

Common stocks are the most common form of equity investment. All corporations issue common stock and are controlled or owned by the shareholders or owners. Following are some of the most important features and characteristics of common stock:

1) Common stocks provide a

All-or-None Orders in Stock Trading

An All-Or-None (AON) order is an order to purchase or sell a stock that must be executed in its entirety, or not executed at all (no partial transaction). In other words, the order will execute only if there are enough shares available in a single transaction to cover it.

For example, when you place an all-or-none order to your stockbroker requesting 500 shares of Company ABC at $12, your broker

Saturday, July 23, 2011

Advantages and Disadvantages of Stock Trading

Stock trading is one of the most effective ways of making money and building wealth. It might seem easy but stock trading can be a risky venture especially for those who are lack of knowledge and experience.

Following are some of the advantages and disadvantages of trading in the stock market:

Advantages:
1) Big returns: There is a huge potential to make big profits in the stock market. Many

Fundamental Concepts of Diversification

Diversification is a technique for reducing investment risk. It is the only way to protect yourself from unsystematic risk, which is the risk associated with a particular company or stock.

The fundamental principle behind this technique is that a portfolio containing different kinds of assets carries lower risk than any other individual investment. There are different ways to diversify your

What is Dow Jones Indexes?

Dow Jones Indexes (DJI) is owned by the CME Group.and is a leading full-service index provider that develops and licenses indexes for use as benchmarks and as the basis of investment products.

In 2010, Credit Suisse and Dow Jones Indexes signed an agreement which covers the calculation, licensing, branding and marketing of the hedge fund indexes. DJI also introduced the Dow Jones Golden

Friday, July 22, 2011

How to Trade Stock Splits

A stock split increases the number of shares outstanding, which decreases the market price per share such that the before and after market capitalization of the company remains the same.

Example:
JKL Company splits its stock 2-for-1. Peter holds 1,000 shares before the split and each share priced at $20. So, Peter has $20,000 worth of stocks (1,000 * $20).
After the split, Peter will own 2,000

Stock Investing Tips for Beginners

Investing in the stock market is always risky. Following are some useful tips and advice for new beginners:
(i) Careful planning is important to successful trading. You should develop a long term investment plan and stick to it.
(ii)You need to know what your financial goals are, and how much you need to invest now in order to reach that goal.
(iii) It is wiser to start off with small investments

How to Gain Maximum Profit in the Stock Market

Nowadays, online stock trading is a very popular way to earn money. Investors can buy and sell securities through Internet which can be accessed on virtually any computer anywhere in the world. How to make a profitable investment in the stock market? This is a commonly asked question by many investors and traders. It is always best to do some rigorous research on the Internet and choose the best

Thursday, July 21, 2011

How to Calculate Stock Split

A stock split or stock divide increases the number of shares but reducing the total value of each share. To calculate stock splits, you will need to determine the rations like 2-1, 2-3, 2-4, etc.

Learn how to calculate a stock split with the following examples:

(1) If you owned 60 shares worth $10 per share prior to the split, and later the company decided to execute a 2-for-1 stock split, then

How to Find the Best Online Brokers

Finding the best stock broker is a very important part of the trading process. An online broker help you handle everything from tracking your portfolio to buying and selling shares online. You should consider the following factors when finding the best online brokers for your trading needs:

1) Account fees: You should check fees carefully before opening an online brokerage account. It's better

Advantages of Stock Splits

A stock split is an action taken by a company to decrease the price of  shares by increasing the number of shares available, so that the total dollar value of the shares remains the same as before the split. There are a number of ways in which the companies can split their stocks, such as two-for-one, three-for-two, three-for-one, etc. This requires approval from the board of directors and the

Wednesday, July 20, 2011

Stock Options Trading - Understand the Jargon

Trading stock options can be profitable but also risky. If you are interested in trading stock options, you must first learn the jargon and understand some of the basic concepts and terminology. It can be very lucrative if you trade the right way.

The basic concept in stock options trading is that investors purchase the right to either buy or sell a particular stock for a predetermined price

Bonus Issue vs Right Issue

What is the difference between bonus issue and right issue? A bonus issue (also called a capitalisation issue or a script issue) is an issue of ordinary shares to existing shareholders at no charge.

For bonus issue, new shares are issued by transferring company's reserves into share capital. The number of free shares is usually distributed pro rata to existing stockholder. For example, if a

Find the Best Penny Stock Investments

The are several important factors to consider when finding the best penny stocks for your investment. You need to understand what these penny stocks actually are, and be aware of the risks of trading such securities.

Penny shares/stocks are speculative small value stocks (below $5) and can be very risky. You can purchase a large amount for a small price and make a good profit if the price goes

Tuesday, July 19, 2011

Examples of Stock Splits

A stock split increases the number of shares outstanding, thereby reducing the price per share such that the before and after market capitalization will remain the same.

Example 1 (2-for-1 Stock Split):
CPU Company has 10,000 shares of stock priced at $20 per share. The market capitalization is 10,000 * $20 = $200,000.
Later, the company decided to execute a 2-for-1 stock split. After the split,

How to Use a Stock Screener

A stock screener is a very useful tool that helps traders to find new potential stocks for consideration. You can use stock screener to search stocks that meet a specific criteria such as Market Cap, Beta (Volatility), etc.

The Yahoo Finance website has a stock screener that allows you to sort through many stocks quickly under different conditions. You can use it to search stocks by industry,

Examples of Rights Issue

Rights issue is an issue of additional shares by a company to raise capital for expansion or to solve a liquidity problem. With the issued rights, existing shareholders have the privilege to buy new shares of a company in proportion to their existing holding, and at a discounted price.

Example 1:
MAA Company has 400,000 $1 ordinary shares as at 30 June 2011. The company decided to make a rights

Monday, July 18, 2011

Why Options Are Better Than Stocks

Options are financial instruments that can provide individual investor with the right, but not the obligation, to buy or sell a specified amount of an underlying asset at a predetermined price within a specified time period.

Following are some of the reasons why options trading is better than stock trading:

1) Options give you huge leverage and a much better control of risk.

2) Using options

Keys to Trading For a Living

Investing in stock market is one of the best ways to make money, and it is possible to make a living from trading. One of the most important keys to stock trading is to gain the knowledge and skills you need to succeed as a trader. You can do this with stock market training programs that are available on the World Wide Web.

Trading for a living can be done in different ways, you can either

Sunday, July 17, 2011

Picking Your First Stocks (For Beginners)

Picking your first stock can be a difficult and challenging task, and if you do not have the confidence in your ability to find a good stock, consider getting some help.

A few beginner tips for picking the right stocks and shares:

1) The first step when buying stocks is to do your research on what company to buy stocks in. Before picking a stock, you should find out some relevant details about

How to Calculate Book-to-Market Ratio

Book-To-Market Ratio is a financial ratio used to measure the value of a company by comparing the book value of a company to its market value. If the ratio is more than 1 then the stock is considered undervalued; if it is less than 1, the stock is considered overvalued.

Formula:
Book-To-Market Ratio = Book value of a company / Market value of a company

Note: The market value of a company is

Saturday, July 16, 2011

The Best Way to Learn Stock Trading

To be a successful stock trader, you should take the time to learn how to invest in the stock market effectively. What is the best way to learn stock trading? This is a commonly discussed question on many forum sites. If you are a new beginner, you definitely want to learn some basic knowledge about stocks and shares.

Following are some of the best ways to learn and understand stock market

How To Sell A Stock You Don't Own

How do you sell a stock you do not own? First you borrow the stock from a third party (your broker) and sell it to someone else. Later, when the share price drops you buy it at a lower price and return to your broker, thus making a profit. This is known as short selling.

Short selling (also known as going short or shorting) is the practice of selling stocks that have been borrowed from a broker,

Friday, July 15, 2011

How to Get Rich in the Stock Market

Can you get rich by investing in the stock market? The short answer is yes. Understanding the stock market is a key to becoming a successful trader. If you do adequate research and invest wisely, you can make money quickly.

The following advice will help you start a successful trading and make a good profit:

- Analyze the stocks thoroughly: Which industry does the company belong in? How does

Advantages and Disadvantages of Penny Stocks

The term "penny stocks" generally refers to low-priced stocks of very small companies, usually under $5. They are traded over the counter through the OTCBB and Pink Sheets exchanges.

Following are some of the major advantages and disadvantages of investing in penny stocks:

Advantages:

1) Penny stocks can double or even triple their value in a single day.

2) This is the easiest way to make

Thursday, July 14, 2011

Knowing When to Sell Your Stock

Knowing when to sell stocks is as difficult as knowing when to buy. This is one of the most difficult decisions that a stock trader has to make.

If you don't know when is the best time to sell your stocks, you should consult with a professional investment advisor. Following are the main reasons that you might want to sell a stock.

1) If the stock is not moving as hoped (e.g., growing slower

Advantages and Disadvantages of CFD Trading

Contracts for Difference or CFDs are leveraged instruments that allow investors to participate on the movement of shares and index prices without the need for ownership of the underlying asset. CFDs are available in countries such as The Netherlands, Poland, Portugal, UK, Singapore, Germany, Spain, Switzerland, Italy, South Africa, Canada, New Zealand, Australia, Sweden, Norway, France, Ireland,

Wednesday, July 13, 2011

How to Pick a Good Stock For Investment

There are various factors that you need to take into account when picking a good stock for investment purposes, such as the company's profitability, operational efficiency, and so on. It is essential to learn about the stock market, how it works and how trading is done. You can easily find these useful information via the Internet, online articles, newsletters, reviews, etc.

It is always better

Best Electronic Trading Platform

FXall was named 'Best Electronic Trading Platform' at the FX Week Best Banks Awards 2010 voted for by corporate treasurers, investors and banks. The FXall platform offers clients with an edge at every stage of the trade lifecycle from execution to post-trade, providing deep liquidity, flexible execution mechanisms, robust infrastructure and market-leading solutions capable of meeting the most

Tuesday, July 12, 2011

How to Trade Penny Stocks Online

Nowadays it is quite convenient and easy to trade penny stocks on the web.

The first step to trade penny stocks online is to find a brokerage firm. You need to do some research and compare a number of online brokers, and look at transaction costs, speed of execution, and other relevant factors. It is critical to find a good broker who specializes in penny stocks and offers you great service,

Best CFD Brokers in Australia

The best CFD Brokers in Australia include IG Markets, International Capital Markets, MF Global Australia Limited, City Index, Macquarie CFDs, to name a few.

IG Markets is Australia’s number one CFD provider. According to the Investment Trends May 2010 CFD Report, 29% of CFD traders choose IG Markets as their main provider vs. 20% for the next largest provider. It is also the Winner of Best CFD

Monday, July 11, 2011

Advantages and Disadvantages of Mutual Funds

What are the advantages and disadvantages of investing in mutual funds for investors?

Mutual funds offer several advantages over direct investing in individual stocks or securities, such as the follows:
1) Using mutual funds can help you diversify your portfolio with minimum investment.
2) Mutual funds are managed and supervised by professionally qualified fund managers who are in a better

A Trading Plan Increases Your Success As a Share Trader

A properly constructed trading plan is your road map to trading success. It is absolutely essential to have a written, well-defined trading plan before you begin trading in the share market.

Without a plan, you will be likely to make mistakes and get distracted by just anything that comes along. To increase your chances of success, you need to develop a good trading plan, stick to it and set

Sunday, July 10, 2011

5 Methods of Share Issues

Following are the five common methods of share issues:

1) Public Issue - This involves a corporation making an invitation to the general public to subscribe or purchase its shares. For instance, a listed company made a public issue of 1,000,000 New Ordinary Shares of $1 each at an issue price of $1.20 per ordinary share payable in full on application.

2) Offers for sale - This method involves a

Types of Equity Funds

An equity fund (or stock fund) invests in equities such as common and preferred shares. Equity funds are considered to be the more risky than most other types of funds but they provide higher returns to investors.

There are many different types of equity funds, such as as the follows:

1) Aggressive Growth Funds: This type of funds invests in small companies and businesses that are expected to

Saturday, July 9, 2011

The Secret to a Hot Stock Pick

A successful investor should learn how to find hot stock picks to make good money on investing. There is a lot of information on the web available free of charge. It is advisable to find a reliable website that provides you with daily stock tips and stock picks that are based on technical analysis not on guesswork.

Another great way to start searching for hot stock market picks is by using

How to Buy Stocks Easily

Are you thinking of buying stocks for long term investment? These days, you can easily buy and sell stocks through a discount brokerage, a full-service discount brokerage, or a traditional brokerage.

If you want to buy stocks online, then you need to set up an account with an online brokerage firm. When you login to your account, you can easily buy stocks online. For new beginners and those who

Friday, July 8, 2011

How To Invest In Mutual Funds

A mutual fund is a very popular type of investment that pools investors' money to make multiple types of investments including stocks, bonds, money market instruments and other securities.

Trading mutual funds can be done through placing orders with a broker or contacting the fund companies directly. Investors can purchase the funds from a discount brokerage firm that handles different families

Stock Market Investment For Beginners

Investing in the stock market can be extremely lucrative but it can also be very risky and costly for those who are not well prepared. First of all, beginners need to know what the stock is and its associated features. Understanding the basics of the market and knowing how stock market works is a key to success for new beginners.

Stocks (also known as equities or shares) represent ownership in a

Thursday, July 7, 2011

Types of Bond Mutual Funds

A bond mutual fund is an investment scheme that invests in bonds and other debt securities with the purpose of providing income through dividends or as a balance to a portfolio.

Following are the different types of bond mutual funds to choose from, depending on your risk tolerance:

1) Corporate Bond Funds: These are made up of a selection of bond issued by different corporations. Most corporate

Stocks Vs Bonds

What is the difference between investing in stocks and bonds? This is one of the most frequently asked questions by new investors. There are many differences between these two types of investments, which are listed as follows:

Stocks versus Bonds:

1) Investing in stocks is considered more risky than investing in bonds.

2) While buying stock makes you part owner of the corporation, buying bonds

Wednesday, July 6, 2011

Cheapest Stock Trading For Maximum Earnings

Finding the cheapest stock trading sites or services is a key part of being a successful trader. Of course, you do not want to waste your hard earned money on unnecessary charges and fees. If you trade often, commissions can add up very fast, therefore you need to find ways to cut down the peripheral costs so that you can spend your money on stocks themselves, not trading fees.

Obviously,

Different Types of Mutual Funds

There are various types of mutual funds available to individual investors:

1) Money market fund: This is an open-ended mutual fund that invests in short-term debt securities. It has lower risks as compared to most other investments.

2) Stock fund (or equity fund): This is a fund that invests in equities (common and preferred shares).

3) Bond fund: This is a collective investment scheme that

Tuesday, July 5, 2011

Why Invest in Bonds?

Bonds are very similar to bank loan. Investing in bonds means that you are loaning your money to a corporation or government. Bonds are debt, whereas stocks are equity. If you buy stocks, you will become an owner in a corporation.

Investors can choose to invest in short, medium or long term bonds. Longer-term bonds (with maturities of 10 years or more) tend to pay higher interest rates because

Fundamental Analysis Ratio For Stock Picking

Fundamental analysis is a valuation method used to determine the value of a stock by using financial and economic analysis. It is very important for traders and investors to analyze financial data in detail in order to make the right stock picking decision. Many investors use fundamental analysis or in combination with other tools to evaluate and choose stocks to invest in.

Following are some of

Monday, July 4, 2011

Learn Swing Trading

Swing trading is a style of trading stocks that attempts to capture short-term trading opportunities in the market. The other two main styles of trading are: buy and hold trading, and day trading. Buy and hold is a long-term investment strategy usually involves trades being held for several weeks to months and sometimes even years. In day trading, traders usually do buying and selling on small

Disadvantages of Convertible Bonds

Convertible bond is a debt security that can be converted into the common stock of the issuing company at a later date, subject to certain restrictions. This type of investment can offer some disadvantages / drawbacks to the issuers and investors, such as the follows:

1) A convertible bond is riskier. If the issuing company goes into bankruptcy, the holder of the bond has a lower priority claim

Sunday, July 3, 2011

Market Timing Strategy of Buying Stocks

A successful timing strategy will make good returns and exit losses quickly. This requires an investor to know when to buy and sell the stocks in the market. It is very common that investors like to use spreadsheets, charts, and graphs to analyze and find the right timing for buying stocks.

There are market timing strategies that work! Market timing often looks at various moving averages such as

Return on Equity (ROE) Ratio Analysis

Definition: Return on Equity (ROE) ratio (also refereed to as return on net worth) measures the amount of profit that a company generates through the use of shareholders' equity (also known as net assets or assets minus liabilities).

Formula:

Return on Equity Ratio = Net income after tax / Average shareholders equity
Or,
Return on Equity has three ratio components:
ROE = Profit Margin * Asset

Saturday, July 2, 2011

Best Place To Buy Mutual Funds

Consumer Reports MoneyAdvisor ranked Scottrade as the No. 1 place to buy mutual funds online. In addition, Kiplinger's Personal Finance magazine named Scottrade the Best Mutual Fund Selection for 2004, recognizing the firm's first-class service, wide selection of no-load mutual funds, low fees and quick response times.

Scottrade offers one of the largest selections of mutual funds in the

Basic Investor Guide to Stocks and Bonds

This basic investor guide will look at the ways you can make money with stocks and bonds. Investing in stocks is for those who want to get higher returns and are willing to accept risks. Investing in bonds is for those who want to get higher interest with relatively lower risk compared to stock investing.

Stocks (or shares) represent part ownership in a corporation, and are traded on the stock

Friday, July 1, 2011

Understand Equity Market - Common Stocks

Common stocks (ordinary shares or equity shares) are the most common form of stocks held by the public in the market. This is a security that represents ownership in a corporation.

Facts about common stock:

1) Common stockholders have the right to control the company through their votes. They have the right to elect board of directors or to remove the directors from office.

2) There is no

Stock Market Basics - What Is A Stock?

A stock represents ownership of a part of a company. When you buy the stocks, you will receive a stock certificate that shows you own a piece of a corporation. For example, Company ABC issued 1,000,000 shares in total and you owned 10 shares, this meant you owned 1/100,000th of the company. The stock certificate will show the name of the stockholder and the number of shares owned.

As a