Digital Look provides 4 different glossaries, a general glossary covering the general terms we are asked about, a fundamentals glossary covering the fundamentals terms you will find on the site, a technical glossary explaining some of the more technical terms you are likely to encounter and a trades glossary covering the various trade types.
P/E Ratio - Also known as the Price to Earnings ratio is the most common measure of how expensive a stock is. The P/E ratio is equal to a stock's market capitalization divided by its after-tax earnings over a 12-month period, usually the trailing period but occasionally the current or forward period. The value is the same whether the calculation is done for the whole company or on a per-share basis. For example, the P/E ratio of company A with a share price of £10 and earnings per share of £2 is 5. The higher the P/E ratio, the more the market is willing to pay for each dollar of annual earnings.
Digital Look uses the adjusted EPS figure for this calculation.
PEG Ratio - is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company's expected future growth. A stock's price/earnings ratio divided by its year-over-year earnings growth rate. In general, the lower the PEG, the better the value, because the investor would be paying less for each unit of earnings growth.
The PEG is calculated as P/E Ratio/EPS Growth and is expressed as a number.
Placing - A form of issue of securities in the UK, typically with a predetermined number of non-retail investors.
Portfolio – A collection of investments all owned by the same individual or organization. These investments often include stocks, which are investments in individual businesses; bonds, which are investments in debt that are designed to earn interest; and mutual funds, which are essentially pools of money from many investors that are invested by professionals or according to indices.
Preference Shares - Fixed dividend shares that rank above ordinary shares if a company is wound up. Preference shares represent partial ownership in a company, although preferred stock shareholders do not enjoy any of the voting rights of common stockholders.
Preliminary Results – Listed companies have to announce the annual financial results for the company, also know as prelims or finals. They are considered preliminary until they are reviewed, adjusted and approved by audit. They also have to announce interim results and some companies also announce quarterly figures.
Pre-Tax Profit – A company’s operating profit before tax is deducted.
Pre-Tax Profit per share – A company’s profit after expenses but before tax divided by the number of shares in issue.
Profit and Loss account - The profit and loss account provides a record of a firm's trading activities and whether it has made a profit or lost money over a particular period of time. It differs from the balance sheet that records the financial position of the business at a particular snapshot moment in time.
Profit Growth (Average) – this shows how well a company is growing by comparing the net profits to the past net profits over a chosen period.
Profit Warning – When a listed company expects profits to fall below analysts’ forecasts by more then 10%, the directors are required to issue a profits warning through the London Stock Exchange.
Public Offer –The making available of a new securities issue to the public through an underwriting also called offering. The public can ask for a prospectus and apply to buy shares prior to the companies admission.
Reserves – In asset-based lending the difference between the value of the collateral and the amount lent. Also, funds set aside for emergencies or other future needs. Reserves can arise from the retention of profits or from events such as the issue of shares at a premium or the revaluation of assets.
Regulatory News Service – Also known as RNS, a means by which UK listed companies make announcements to the London Stock Exchange.
Revenue Growth (Average) – this shows how well a company is growing by comparing the Revenue from the historical Revenue over the chosen period.
RiskGrade – Helps investors measure and compare the risk of financial investments to other companies at the same point in time. Visit http://www.msci.com to learn more about RiskGrades.
ROCE – (Return on capital employed). This is a measure of the return from invested and borrowed capital. The return is the pre-tax profit earned before charging borrowing costs.
Sales Per Share – A ratio that shows the total revenue earned per share over a 12-month period. This ratio can be compared to the company’s share price to understand the value that the markets are putting on a unit of the company’s sales.
Sectors – A distinct subset of a market, society, industry, or economy, whose components share similar characteristics. Stocks are often grouped into different sectors depending upon the company's business.
SEDOL - The Stock Exchange Daily Official List number, a code used by the London Stock Exchange to identify stocks, especially those that aren't actively traded in the U.S. and don't have a CUSIP number.
Shares – A unit of ownership that is a proportional amount of a company. The standard class of shares are usually referred to as “Ordinary Shares” but a company may have more than one class of share, including Preference Shares.
Share Premium Account – Surplus of proceeds from share issue over the nominal value of shares issued.
Shareholder Funds – The sum of all company assets less all liabilities.
Shares in Issue - This is the number of shares currently issued for that company.
Spread – The difference between the Bid Price and the Offer Price of an investment.
Stock Exchange – is an organization of brokers and investment bankers which has the purpose of providing the facilities for trade of company stock and other financial instruments - usually a central location and recordkeeping. The trading of stock on stock exchanges is called the stock market.
Stocks – The combined value of raw materials, work in progress or under construction and finished goods held.
Note that this is also the American term for ‘shares’.
Tangible Assets – Physical assets owned by a company or individual that can be seen or touched such as buildings, goods for sale or machinery.
Time and Sales - The official record of trades executed on a stock exchange during the day.
Ticker - The three or four letter trading symbol assigned to the share (and some types of fund – investment trusts and ETF’s) by the exchange on which it trades. Investors often refer to shares by their ticker symbols because of their brevity and because they often remain the same even if a company’s name changes.
Total Assets – The sum of all company assets; both fixed and current.
Trading Statement – A statement made by a company regarding current business activities and sales experience.
Turnover – Also known as sales, the amount derived from the provision of goods and services falling within a company’s normal activities after the deduction of trade discounts, VAT, etc.
Volume – The number of shares traded over a given time period, usually one day.
VWAP (Volume weighted average price) - A measure of the price at which the majority of a given day's trading in a given security took place. This is calculated by dividing the value of trades executed by the volume of shares traded over a given period.
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