For the uninitiated, getting involved in the stock market is not unlike trying to learn a new language. This is particularly evident in regards to a typical stock quote page. Much like a budding baseball fan looking a box score for the first time, a new investor trying to decipher the abbreviations, numbers, and codes of a stock page could be intimidating and completely overwhelming. Unlike a baseball box score, however, the stakes in misinterpreting the quote page tend to be much higher.
Breaking Down the Columns
The best way to understand a stock quote page is to simplify the data. The best way to do this is to avoid reading the page as one cohesive unit right out of the gate. Rather, it’s wisest to deconstruct the twelve columns that make up the collective stock quote page and learn about each one on an individual level. Once the knowledge is gained on that level, it can become much easier to see the page as a whole based on the data that’s extrapolated.
The columns that you’ll see in a stock page quote are as follows (column abbreviation in parentheses):
1. 52 Week High (52W high): This number is the highest price that a stock has traded over the previous 52 weeks. This does not usually include the trading that occurred the previous day.
2. 52 Week Low (52W low): This number is the lowest price that a stock has traded over the previous 52 weeks. Like the 52 weeks high, it usually doesn’t include the previous day’s trading in the number. When paired with the 52 weeks high, it can provide the investor solid information about the range of stock performance over an elongated period.
3. Company Name and Type of Stock (Stock): This column is divided into two parts. The first part lists the name of the company, albeit in an abbreviated format if the company name is over a certain length. Sometimes, you may need to research the abbreviation to confirm the company name. The second part will indicate what kind of stock you’re working with. Different symbols correlate to different share classes. If a stock doesn’t have a symbol here, it means it’s common stock.
4. Ticker Symbol (Ticker): This is the super-abbreviated code that identifies the stock on a ticker feed, like what you may see running on the bottom of a financial news program. It’s important that you familiarize yourself with the ticker symbols of the stocks you’re invested in as soon as possible so you can ascertain up-to-the-minute information on your stock as efficiently as possible. There are various sites online that can help you match stocks to their corresponding ticker symbol.
5. Dividend Per Share (Div): This column displays the annual dividend payment per share. In other words, it’s the distribution of a portion of a company’s earnings to its shareholders, as is determined by its board of directors. If a company does not currently pay out dividends, their spot on this column will be blank.
6. Dividend Yield (Yield %): This column represents the percentage return on the dividend. This figure is calculated as annual dividends per share as divided by price per share.
7. Price/Earnings Ratio (P/E): This column is determined by splitting the current stock price by earnings per share from the previous four quarters. There are various tutorials available online that you can use to help you break this ratio down efficiently.
8. Trading Volume (Val 00s): This column displays the total number of shares that were traded for the day. The “00s” abbreviation indicates that these numbers are listed in the hundreds. You should add a 00 to the number displayed to get an accurate approximation of the actual number traded.
9. Day High (High): This number represents the maximum price people paid for the stock during the day.
10. Day Low (Low): This number represents the minimum price people paid for the stock during the day. This number can be used in conjunction with the day low to determine a stock’s fluctuation.
11. Close (Close): As the name suggests, this represents the last trading price recorded by the stock at the closing bell. If the number is printed in bold, this means that the price of the stock jumped up or down by at least 5%. While this number may look self-explanatory, it can be somewhat misleading if you’re not careful. The number is simply an indicator of past performance. You aren’t guaranteed to land that stock at the price at the opening bell because the price is constantly in flux, even after the exchange is closed down for the day.
12. Net Change (Net Chg): This represents the change in a stock’s dollar value about the previous day’s stock. Investors will use this column to determine whether a stock is “up” or “down” for the day.
Using these Columns as a Complete Tool
Once you get a firm grasp on the columns by themselves, you’ll start seeing how they work in conjunction with each other to paint a cohesive picture of a stock’s performance and invest-worthiness. This information will also help you latch on to various nuances that may otherwise be buried within the columns that are somewhat easy to interpret.
What’s more, a grasp of this information can be applied to other aspects of following the stock market, such as following tickers. This can be vital, considering the volatility of the stock market. Such knowledge slows down the market to a speed that can be quickly grasped on the fly. Considering the world of investing can move at break-neck speed, any advantage that an investor can use to pump the brakes may be something that is well-appreciated, especially if you’re just getting started into the world of investing. And as investors gain confidence in playing the market and begin to utilize other tools, they may notice that all of the fancy stock-related gizmos tie back to this page. Think of them as different dialects of the language of stocks.