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Dividend

Stock. shares. Portfolio. IPO. Dividend. Ticket Symbol. P/E Ratio. Understanding Stocks. What are Stocks?. Stocks - a claim on a corporation that gives the purchaser a share, or small percentage or part, of the corporation!. Let’s break it down.

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Dividend

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  1. Stock shares Portfolio IPO Dividend Ticket Symbol P/E Ratio

  2. Understanding Stocks

  3. What are Stocks? Stocks- a claim on a corporation that gives the purchaser a share, or small percentage or part, of the corporation!

  4. Let’s break it down You own a company and it’s doing well but you know you can do better if you had more capital to expand. So you file for an IPO (Initial Public Offering). What you are offering to the public is stock, also called a share, or piece of your company.

  5. The Story continues The idea is that when a person buys a share both parties win. The Shareholder hopes the the value of the share will go up as the company does better. Company gets the capital to expand and grow the business

  6. IPO The day arrives. Your stock will be traded in the New York Stock Exchange (NYSE), one market for buying and selling stocks. The bell rings the public can now own part of your company and you are now considered publicly, instead of privately, owned Will people be interested in buying your stock at the price you set? The market will answer that!

  7. How stock prices work If demand is high for your stock at the price of your IPO and people buy the price of that stock will go up. Say I buy 100 shares of your stock at $10 per share. If lot’s of people like that price, and buy, soon the price is at $17 dollars a share. I just made 7 dollars for every share I bought. A total of $700 dollars profit for me!

  8. People feel like your company won’t do well for some reason and they begin to sell off your stock. Of course the opposite can happen. This brings down the value of the stock from $17 to $8. Now you’ve actually lost 200$ of your initial investment.

  9. How do you buy and sell stocks? You can buy and sell online through a company that works out the transaction for a small fee. Through a broker who will do the same for a larger fee. Or You may also invest in a Mutual Fund in which you give a company money and they invest in a bunch of different stocks they think are good (safer).

  10. The Dow Jones Industrial Average (DJIA) Remember it’s an average

  11. 3M Company (MMM) • Alcoa Inc. (AA) • Altria Group, Inc. (MO) • American Express Co. (AXP) • American Int'l. Group (AIG) • AT&T Inc (T) • Boeing Co. (BA) • Caterpillar, Inc. (CAT) • Citigroup Inc. (C) • Coca-Cola Co. (KO) • DuPont (E.I.) deNemours (DD) • Exxon Mobil Corp. (XOM) • General Electric Co. (GE) • General Motors (GM) • Hewlett-Packard Co. (HPQ) • Home Depot, Inc. (HD) • Honeywell Int'l. Inc. (HON) • Intel Corp. (INTC) • International Bus. Mach. (IBM) • J.P. Morgan Chase & Co. (JPM) • Johnson & Johnson (JNJ) • McDonalds Corp. (MCD) • Merck & Co. Inc. (MRK) • Microsoft Corp. (MSFT) • Pfizer Inc. (PFE) • Procter & Gamble Co. (PG) • United Technologies Corp. (UTX) • Verizon Communications Inc. (VZ) • Wal-Mart Stores, Inc. (WMT) • Walt Disney Co. (DIS)

  12. How people know which stocks to buy? You research a companies stock history and if any factors will change the company in the near future. Some just buy stocks of companies that they know. But mostly it’s all about research. Examples: New managment (steve jobs dies), New products coming out (Iphone 5S), weather (cold weather in Florida and you grow oranges), this company has done well the last few months (reading stock tables).

  13. How to Read the Stock Market listing— NYSE=New York Stock Exchange BBY=Ticker symbol for Best Buy Best Buy Co., Inc (NYSE:BBY) 47.46 +2.92 / +6.56%Sep 18 Prev. Close: 44.54 Open: 46.98 High: 47.56 Low: 45.69 Volume: 24,116,794 52wk Range: 41.85 - 58.49 P/E Ratio: 17.51 Dividend Yield: 1.10% 47.46 = price the stock closed at today +2.92 = the Net Change the difference between the current closing price & the previous day’s closing price. +6.56% = the Net percentage Change the difference between the current closing price & the previous day’s closing price. Volume = the number of shares that were bought & sold today Previous Close = what the stock closed at yesterday 52wk Range = the lowest to highest price this stock has traded at during the past 52 weeks Open = The price it started trading at today P/E Ratio = the price-earnings ratio, & is obtained by taking the latest closing price per share and dividing it by the latest available net earning per share. A high PE ratio usually indicates a stock that is experiencing a higher than average growth in earnings. High = the high price the stock traded for today Dividend Yield: the dividend divided by the closing price Low = the low price the stock traded for today

  14. Now let’s try ourselves Using the “Understanding Stock Tables/Quotes” handout and a partner answer the questions on the back, on a separate piece .

  15. Stock Market Game - You will be in 4 Teams (consider yourselves owners of a mutual fund) - Each person in the group will research at least one stock to buy. - Monday you will have your first board meeting to discuss which stocks to buy in the Stock Market Game. - Each Team will begin with $100,000. - You must have at least 4 different stocks in your mutual fund at all times.

  16. - Over the course of the 10 week game your Team will build a portfolio explaining trades you made, strategies for buying and selling, and a log of your meetings. In a moment I will put you on teams. Once with your team one person will come up and get two (and only two) packets. You and your team will go through the packets together and come up with questions for me which I will answer at the end of the period.

  17. Homework Deeply research one stock for next Monday’s first Board meeting. You will need to bring in the paper filled out to the meeting next Monday.

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