There are two main methods you can use to pick stocks for investing or trading.
I'm talking about terms called “fundamental” and “technical” analysis.
You need to understand the differences between these methods - if you are to use them successfully as an investor…
Use them correctly - and you stand to make big profits. Use them incorrectly and you could lose out big time.
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When companies release their results, one figure that investors are interested in is earnings.
Companies usually report earnings on a per share basis. It's easy to compare these figures to previously published ones.
But there are two types of earnings a company reports: Earnings and headline earnings.
So what does a company's earnings tell you? And what's the difference between earnings a... ››› more
If you rely on dividend payments for income or reinvest your dividends to help grow your investment, you want to check if they're safe.
Whether a company's going to continue to pay dividends into the future is an important aspect of your investment strategy.
So how can you check the safety of your dividend payments?
One well-used method is checking a company's dividend cover.
Read on t... ››› more
Have your ever watched Bloomberg TV and you just didn't understand all the gibberish that they talked about?
Or, have you ever been at a braai when your friends started talking investing and you didn't have a clue what they were saying. Did you feel like the odd one out?
Well, what if I told you that thanks to four simple numbers, measuring the value of different shares is easier than you th... ››› more
“What's the best share to buy on the JSE today Francois?”
I get this question a lot… And to tell you the truth the answer changes all the time. Markets aren't static and share prices move - changing what's a good buy all the time.
But if there's a small cap miner that excites me RIGHT NOW, it's the one I'm about to share with you today!
A hot junior miner you need to own right now
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Having a dig through a company's financial statement can leave you a bit overwhelmed if you're not familiar with the terminology used. And none more so than a company's profit. There are a whole host of profits quoted. Let's take a closer look at one of them, net profit…
What is a company’s net profit?
You can look at a company’s net profit like your net salary. It means you’ve paid al... ››› more
In the world of investing, there are a multitude of different financial ratios analysts use to try and whittle out winning shares. One of the most commonly used is the price earnings (PE) ratio. But what does is show you? And how can you apply it to your research? Read on to discover what you need to know about the PE ratio…
Why is the PE ratio so important?
The PE ratio is simply a shar... ››› more
When it comes to buying shares, you want to buy at a good price so you can hopefully sell at a profit in the future. But how do you value a share? Analysts' forecasts aren't always very reliable. So you need to do some calculations of your own to determine a share's value. Read on to find out how…
Become your own analyst
With so much data available online, it makes sense to become your ow... ››› more
Earlier today, Sasol Ltd released its results for the six months to the end of December. The energy and chemical company reported a solid growth in earnings over the period. The weaker rand helped Sasol's performance for the six months. And shareholders will be pleased to hear that it significantly increased its interim dividend. Let's take a closer look at what Sasol's results revealed…
Sasol... ››› more
Share buybacks reduce the number of a company's shares in circulation. By reducing the number of shares, the company technically increases the value of the shares left in the market. And by taking this step, the company boosts earnings per share (EPS). Some investors are sceptical of share buybacks because EPS usually forms the basis of directors' bonuses. So how can you tell if it's for the good ... ››› more
Earlier today, Nedbank released its full-year results to the end of December. These were better than forecast, with earnings beating expectations. Shares in Nedbank responded well to the results. Let's take a closer look at what Nedbank's results revealed…
In its results, Nedbank reported growth in “diluted headline earnings per share (HEPS) by 15%,” reports BDLive. They came in at 1,829c,... ››› more
When companies buy their own shares on the stock exchange and cancel them, it's called a share buyback. And they're becoming popular again. In the States for instance, they're back at levels seen before the financial crisis. And they're picking up in the UK. But why does a company buyback its own shares? And should you be wary of the practice? Read on to find out more about share buybacks…
Sha... ››› more
Share buybacks are an alternate way for companies to return cash to their shareholders. It can replace paying dividends. It increases the value of company shares by decreasing the number of shares in circulation. As good as that might sound for shareholders, these share buybacks can often be very damaging. Read on to uncover the dark side of share buybacks…
Company bosses often like buybacks b... ››› more
When it comes to selecting shares to invest in, what some ‘expert' says can easily sway your decision. But you shouldn't run out and buy or sell a share just because an expert said to on television or in the financial press. Instead, the ideas that you hear should be a starting point for your research, not the end. Read on to find one question to ask yourself before you even think about buying a... ››› more
If you use a company's price earnings (PE) ratio to base investment decisions on, you can be ignoring problems associated with using earnings per share (EPS). But what if you could calculate a smarter PE? This ratio overcomes the problems of using a company's EPS and focuses on the whole company, not just earnings. Read on to find out how to calculate the ‘smart' PE…
A company’s PE is its ... ››› more
The PE ratio is a very popular ratio investor's use. But don't jump the gun! The PE ratio doesn't always reflect the true state of a company. Companies can manipulate earnings, so this affects the PE ratio. Read on to find out two reasons why the PE ratio can mislead you…
The PE ratio takes into account a company’s share price and its earnings, Phil Oakley explains in MoneyWeek.
The PE ra... ››› more
Investors often focus on two key things when they buy a share: How much profit, or earnings, the company is making, and what price the shares are. That's why the price earnings (PE) ratio is so popular. But there are reasons why you shouldn't rely on the PE ratio alone. Read on to find out two problems of using the PE ratio…
The PE ratio simply takes the share price and divides by earnings per... ››› more
You don't want to fall into the trap of paying too much for a share. It will have a negative effect on your expected returns. That's why it's so important to pay attention to a company's value before you jump in. Let's look at the workings of a company's value and the effect on your return…
When it comes to making decent returns from buying shares, one crucial aspect is a company’s value, Ph... ››› more
When it comes to buying shares, you don't want to pay too much for a share. But how can you go about doing that? Let's delve a little deeper into how you can value a share so you don't pay too much…
There are some simple methods of valuing shares that can stop you from paying too much, Phil Oakley explains in MoneyWeek….
When you open a savings account, the bank pays you a rate of interes... ››› more
The price earnings ratio (PE ratio) is a much quoted number in finance. It gives you an idea of whether a share is overvalued or undervalued. Let's have a closer look at how you can calculate the PE ratio…
In your quest to find winning shares, the PE ratio can play its part.
This ratio can tell you if a share is cheap or expensive, Tim Bennett explains in MoneyWeek.
The financial press r... ››› more
Disclaimer Note that FSP Invest, a division of Fleet Street Publications (Pty) Ltd, is a research house and not a registered broker, financial advisor or financial service provider. Our editors and customer services teams also do not give personal investment advice. The advice in this website is general advice only and may not be appropriate to your particular investment objectives, financial situation or particular needs, so before investing or if in any doubt about your personal situation, you should seek professional advice from a stockbroker or independent financial adviser authorised by the Financial Services Board.
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Remember: Never invest more than you can afford to spare and that the value of any investment, and the income derived from it, can go down as well as up. The past is not necessarily a guide to future performance.
Editors or contributors may have an interest in investments commented on in this newsletter. However they have signed restraints to prevent the abuse of their position as contributors to this publication.