2/11/2024 0 Comments Basic stock lingo![]() This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. and Morningstar, Inc.Ĭopyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606Īt the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. Forbes Media, LLC Investor's Business Daily, Inc. Each of the company logos represented herein are trademarks of Microsoft Corporation Dow Jones & Company Nasdaq, Inc. This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Tune into this week’s podcast to find out. What Other Confusing Investing Terms Should Beginners Know About? ![]() It’s usually not as difficult as it seems. New investors shouldn’t get thrown by fancy investing lingo. Earlier in the year, Warren Buffett announced that he had put on a big arbitrage trade, buying 9.5% of Activision Blizzard in the belief that Microsoft would be able to go through with the deal and he would make the difference. But Activision Blizzard is now trading around $79. Microsoft has an offer to buy Activision Blizzard at $95 per share. He is betting the court orders the deal to go through at $54.20. David Einhorn at Greenlight Capital recently announced he bought a position, with an average price of $37.24. They are betting that the deal goes through and they make the difference.įor example, Elon Musk offered to buy Twitter at $54.20 but the shares recently traded in the $30s. Īrbitrage is when a trader buys shares of a company that has an acquisition offer because those shares are under the buy out price. The first is with Elon Musk’s offer to buy Twitter and the second is with the Microsoft’s ( MSFT Quick Quote MSFT - Free Report) proposed acquisition of Activision Blizzard. There are two good examples of the arbitrage trade occurring right now. What is Arbitrage? Twitter and Activision Blizzardīeginning investors might have heard the word “arbitrage” thrown around recently and wondered what it was all about. Be sure you know which type of P/E you are using. But ExxonMobil’s trailing P/E is more than double, at 16.1. ![]() ĮxxonMobil is expected to grow earnings by 125% in 2022. ![]() It can be a problem when a company has strong year-over-year earnings growth like ExxonMobil ( XOM Quick Quote XOM - Free Report). YahooFinance has the trailing P/E on its main quote page but Zacks has the forward P/E. Just know that it’s not about share price when looking at valuation.Īnother confusing concept for beginners may be on what type of P/E is being used. Yet Apple has one of the highest P/Es among the FANGMAN stocks. When analysts on television say it is “expensive” they are likely talking about its P/E.Īpple’s earnings are only expected to rise 8% this fiscal year. You might have heard analysts saying Apple ( AAPL Quick Quote AAPL - Free Report) is “expensive.” Yes, it’s trading over $150 a share, but the price isn’t what the analysts are talking about.Īpple currently trades with a forward P/E of 26. But you’re confused by some of the terms that are thrown around. Perhaps, you are new to stock investing and have started listening to this podcast and watching CNBC. This week, Tracey is going solo to give some help to beginner investors. to Episode #325 of the Zacks Market Edge Podcast.Įvery week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.(33:35) - Episode Roundup: AAPL, MSFT, XOM, TWTR, TSLA, ATVI, FIVN.(25:30) - The Federal Reserve: Hawkish vs Dovish.(20:15) - What Exactly Is Arbitrage and How Can You Use It?.(6:45) - Understanding How To Use Stock Valuation Metrics.(0:30) - How To Start Investing Right Now: Basic Stock Terms.
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