Good morning peeps and stock bull its good to have you back...

Now, when you're ready to develop a trading strategy, an easy way to get started is to set some specific stock trading parameters to use when detecting or scanning for potential stock to trade in.



Stock Trading Parameters:

1. Return on Investment: Return on Investment (ROI) is simply the money a company has made or lost on an investment. If an individual investor were to invest N100,000 into XYZ's stock and five years later sold it for N200,000, they had a 100% return on investment or ROI. The return is divided by the cost of the investment to produce the ROI. The problem with this metric is that it's easy to manipulate. Although the calculation is easy, what a company chooses to include in the costs of the investment may change.
However, on paper, ROI could not be simpler. To calculate it, you simply take the gain of an investment, subtract the cost of the investment, and divide the total by the cost of the investment. Or:

ROI = (Gains – Cost)/Cost

Example: For example, if you buy 20 shares of ABC for N100 a share, your investment cost is N2000. If you sell those shares for N2500, then your ROI is (N2500-2000)/N2000 for a total of 0.25 or 25%. This can be confirmed by taking the cost of N2000 and multiplying by 1.25, yielding N2500.

ROI is a simple calculation that tells you the bottom line return of any investment. The operative word, however, is simple. One major factor that doesn't appear in an ROI calculation is time. Imagine investment A with an ROI of 1,000% and investment B with an ROI of 50%. Easy call – put your money in the 1,000% one. But, what if investment A takes 30 years to pay off and investment B pays off in a month? This is when time periods come into play

2. Earnings Per Share (EPS):

EPS is a measure of a company's profit. Take the profit, subtract the dividends and divide that number by the number of shares outstanding. Although EPS will tell the investor how much money the company is earning per share, it doesn't provide the expense information. If one company made N100 per share and another made N120 per share, the second company's earnings are more impressive only if they spent the same or less money to generate the income.

3. Price to Earnings Ratio(P.E ratio):

The Price to Earnings Ratio (P/E ratio) compares a company's current price to its per-share earnings. The P/E ratio is calculated by dividing the price per share by the earnings per share. This metric is one of the best ways to gauge the value of the stock.

If you were planning to purchase a new television, you would probably compare the features and price of multiple televisions. You would expect to pay more for more features. If one TV had fewer features and older technology but cost the same or more than other comparable TVs, that TV may not be a good value.

When a stock has a higher P/E ratio than other similar companies, investors may regard the stock as overvalued, unless the company has larger growth prospects or something else that makes the high P/E worth the money. Remember that the actual price of a stock doesn't provide an indication of value. A higher priced stock could be less valuable when the P/E is examined.

4. Return on Equity:
Return on equity (ROE) measures a corporation's profitability. It reveals how efficient a company is at generating profits. To calculate the ROE, divide profit by the amount of equity or total amount of money invested in the company. If company A had profits of N2 million but had received N1 million of equity, they would be considered more efficient than company B who also made N2 million but had N1.5 million in equity. Company A is operating more efficiently because they are able to make more money with less investment.

ROE should always be used in conjunction with other metrics to evaluate the health and earnings power of a company.


Source: http://www.investopedia.com/

I hope this helps in giving us some ideas on some of the parameters being used in the stock market....I couldnt list all because of time frame but i hope it is sufficient..

Happy investing and enjoy..

@born2be rich, this is a lovely piece and will be very useful.... So guys, what's up for this new week. Want to see how today unfolds and decide later in the day what to go for. Happy investing

jossy26: @born2be rich, this is a lovely piece and will be very useful.... So guys, what's up for this new week. Want to see how today unfolds and decide later in the day what to go for. Happy investing

Thanks bro...

However, the market is still in the red zone today as majority of stock esp. some insurance stocks have gone back to their normal parking lot...

This is the right time to do some bargain hunting in stocks with good fundamentals...

NSE something to remember:

On this day, 25 February 2008, the price of following stocks were:

ABC N4.90k

ACCESS BANK N24.55K

AIICO N7.50K

Be inspired and keep investing.

jamace: NSE something to remember:

On this day, 25 February 2008, the price of following stocks were:

ABC N4.90k

ACCESS BANK N24.55K

AIICO N7.50K

Be inspired and keep investing.

If prices can go back as it was in 2007/2008 na me go dance pass for church... ...infact @jamace make i borrow ur post....

Born 2be Rich:

If prices can go back as it was in 2007/2008 na me go dance pass for church... ...infact @jamace make i borrow ur post....

Wallahi, if price get there (I believe it will get there again and even surpass it), I will request for AZONTO and ALINGO dances for church that day.

Yah, price can still go there again. As at now blood is running on the street, the bulls are being slaughtered. Anyway, I do not mind as far as I did not break my number one principle, never borrow to invest.


Happy investing

Born 2be Rich: Good morning peeps and stock bull its good to have you back...

Now, when you're ready to develop a trading strategy, an easy way to get started is to set some specific stock trading parameters to use when detecting or scanning for potential stock to trade in.



Stock Trading Parameters:

1. Return on Investment: Return on Investment (ROI) is simply the money a company has made or lost on an investment. If an individual investor were to invest N100,000 into XYZ's stock and five years later sold it for N200,000, they had a 100% return on investment or ROI. The return is divided by the cost of the investment to produce the ROI. The problem with this metric is that it's easy to manipulate. Although the calculation is easy, what a company chooses to include in the costs of the investment may change.
However, on paper, ROI could not be simpler. To calculate it, you simply take the gain of an investment, subtract the cost of the investment, and divide the total by the cost of the investment. Or:

ROI = (Gains – Cost)/Cost

Example: For example, if you buy 20 shares of ABC for N100 a share, your investment cost is N2000. If you sell those shares for N2500, then your ROI is (N2500-2000)/N2000 for a total of 0.25 or 25%. This can be confirmed by taking the cost of N2000 and multiplying by 1.25, yielding N2500.

ROI is a simple calculation that tells you the bottom line return of any investment. The operative word, however, is simple. One major factor that doesn't appear in an ROI calculation is time. Imagine investment A with an ROI of 1,000% and investment B with an ROI of 50%. Easy call – put your money in the 1,000% one. But, what if investment A takes 30 years to pay off and investment B pays off in a month? This is when time periods come into play

2. Earnings Per Share (EPS):

EPS is a measure of a company's profit. Take the profit, subtract the dividends and divide that number by the number of shares outstanding. Although EPS will tell the investor how much money the company is earning per share, it doesn't provide the expense information. If one company made N100 per share and another made N120 per share, the second company's earnings are more impressive only if they spent the same or less money to generate the income.

3. Price to Earnings Ratio(P.E ratio):

The Price to Earnings Ratio (P/E ratio) compares a company's current price to its per-share earnings. The P/E ratio is calculated by dividing the price per share by the earnings per share. This metric is one of the best ways to gauge the value of the stock.

If you were planning to purchase a new television, you would probably compare the features and price of multiple televisions. You would expect to pay more for more features. If one TV had fewer features and older technology but cost the same or more than other comparable TVs, that TV may not be a good value.

When a stock has a higher P/E ratio than other similar companies, investors may regard the stock as overvalued, unless the company has larger growth prospects or something else that makes the high P/E worth the money. Remember that the actual price of a stock doesn't provide an indication of value. A higher priced stock could be less valuable when the P/E is examined.

4. Return on Equity:
Return on equity (ROE) measures a corporation's profitability. It reveals how efficient a company is at generating profits. To calculate the ROE, divide profit by the amount of equity or total amount of money invested in the company. If company A had profits of N2 million but had received N1 million of equity, they would be considered more efficient than company B who also made N2 million but had N1.5 million in equity. Company A is operating more efficiently because they are able to make more money with less investment.

ROE should always be used in conjunction with other metrics to evaluate the health and earnings power of a company.


Source: http://www.investopedia.com/

I hope this helps in giving us some ideas on some of the parameters being used in the stock market....I couldnt list all because of time frame but i hope it is sufficient..

Happy investing and enjoy..

nigeria stock exchange
am happy with this,
how i wish to have time now to support this with the relationship between EPS and PE RATIO to build strong synergy.

please remember to write title on the top of your post

with the goal to help nigerian stock investors, we are working on writing free articles for the media.

we need much articles to be allowed and if you can write good stock educating articles like that of born to b rich, please send me message on this forum and upon my reply, write and send your article with your name, phone number and email, the media want to hear you. One family

GOOD DAY EVERY BODY IN THE ROOM. WHAT IS GOYING ON THIS WEEK? WERE DO WE START?

@all

Can one trade on the NSE just like Forex? As in in the privacy of your home or office just using your computer without any 'middlemen'?

nigeria stock exchange









what is happening in the nigeria stock exchange is a good and normal thing. This is the normal pattern and it makes the market to be good for us for a long time.if the market fail to dip, investors would be afraid to buy some stock they feel the price is to high and that the time to have bought has gone and they will not buy and be waiting for the market to dip, if they dont buy, new money will not flow into the market, stocks may tend to be unchanged and investors will keep looking untill they are tired and decide to sell in which those who want to buy then might have use their money for another thing or left the market. Now, hunters are happy to have the privilege to enter their desired stocks at a relatively low price in which they have confidence of making profit. Mind should be at rest, the bear will vanish this week

kingphemy: @all

Can one trade on the NSE just like Forex? As in in the privacy of your home or office just using your computer without any 'middlemen'?

do you trade forex without broker? Your broker execute the trade. D only thing is that they plug in their system to the market and they are online to place the trade as you order.

we dont compare any market here, the whites that rule forex still want to come here to invest. Do you know nse is one of the best in the world?
The market is developing and will be traded like foreX ONE day.

FOREX IS A SCAM, GAMBLING. You can not analyse it. IT IS MAJORLY PSYCHOLOGIES WHICH LAST FOR A VERY SHORT PERIOD OF TIME

in forex you can lose all almost all the time. In stock hardly can you lose all you can still maintain your stake( dividen , bonus etc) in a company despite price fluctuations in the market.

stockbull: nigeria stock exchange









what is happening in the nigeria stock exchange is a good and normal thing. This is the normal pattern and it makes the market to be good for us for a long time.if the market fail to dip, investors would be afraid to buy some stock they feel the price is to high and that the time to have bought has gone and they will not buy and be waiting for the market to dip, if they dont buy, new money will not flow into the market, stocks may tend to be unchanged and investors will keep looking untill they are tired and decide to sell in which those who want to buy then might have use their money for another thing or left the market. Now, hunters are happy to have the privilege to enter their desired stocks at a relatively low price in which they have confidence of making profit. Mind should be at rest, the bear will vanish this week

He that is down have no fear of fallen. keep investing!!

what is the stand of Dangotesugar, good long term , or take gain and walk always. Long time as in 4years Maximum

Hi Guys...Am new in the house( this room) and really appreciate what u guys are doing...We'll all get the promised land

sellydion:

He that is down have no fear of fallen. keep investing!!

WERE DO WE INVEST NOW?

stockbull:

do you trade forex without broker? Your broker execute the trade. D only thing is that they plug in their system to the market and they are online to place the trade as you order.

we dont compare any market here, the whites that rule forex still want to come here to invest. Do you know nse is one of the best in the world?
The market is developing and will be traded like foreX ONE day.

FOREX IS A SCAM, GAMBLING. You can not analyse it. IT IS MAJORLY PSYCHOLOGIES WHICH LAST FOR A VERY SHORT PERIOD OF TIME

Not as you thought. I just want to know whether you can trade from your PC conveniently without recourse to physically contacting your broker.

Thanks.

@ king, NO NO, only licensed stockbroker are allowed to trade on behalf of individuals and corporations

To all the investor in the house, can I start investing in Stock market with 50000naira? I need ur advice, where to start, how? Thanks.

life4rent: To all the investor in the house, can I start investing in Stock market with 50000naira? I need ur advice, where to start, how? Thanks.

You can start investing from a low as N20,000 and above just make sure you get a qualified licenced stock broker to perform your transactions and manage your portfolio...

Like this forum

HELLO MY PEOPLE STOCKBULL,BORN 2BE RICH E.T.C , IS LIKE ALL MOST ALL THE STOCK IS GOYING DOWN NOW WHAT DO WE DO OR WHY? WHAT CAN U SAY ABOUT C&I AND FTN? E.T.C? WHAT STOCK ARE YOU LOOKING TO BUY NOW AND AT WHAT PRICE?

Josh121: what is the stand of Dangotesugar, good long term , or take gain and walk always. Long time as in 4years Maximum

NIGERIA STOCK EXCHANGE
it is good for the long term but dangote flour may be better. Two years is okay or even less

ihedioramma: HELLO MY PEOPLE STOCKBULL,BORN 2BE RICH E.T.C , IS LIKE ALL MOST ALL THE STOCK IS GOYING DOWN NOW WHAT DO WE DO OR WHY? WHAT CAN U SAY ABOUT C&I AND FTN? E.T.C? WHAT STOCK ARE YOU LOOKING TO BUY NOW AND AT WHAT PRICE?

read my above post on this. I said it before that the market is not settled in january and now that investors have seen the nigeria stock exchange is back, better and strong. Large numbers of investors both local and foreign are in the market and they have to bid low price. It may be too late to get out now as the bear will not last long but if you are the type that can easily go in and come out of the market easily and fastly,you can cut losses or book profit now as this may be.

wapic is about to sell rights issue that may be equivalent to 8% gain for existing investors. Can this blast the stock?
Transcorp also want to raise rights issue and this may one of the forces behind her demand now and an halt put on the downtrend.

union bank hit the highest price in three years,breath heavily.it will definitely relax.
Increase in livestock stock demand, it may be among stocks that will accompany and welcome back the bulls along side with honeywell, bagco.

mc nicholas is another stock to buy by active traders, it would have increased by 50% before it will be noticed, i've been following it for two weeks now.

although there is tug of war between buyers and sellers in aiico stock yesterday especially towards the mid period of the trade, the stock is good to enter now, new investors are trying to bid the stock lower so it pays them more. We should see gain in the stock today

stockbull:



wapic is about to sell rights issue that may be equivalent to 8% gain for existing investors. Can this blast the stock?
Transcorp also want to raise rights issue and this may one of the forces behind her demand now and an halt put on the downtrend.

union bank hit the highest price in three years,breath heavily.it will definitely relax.
Increase in livestock stock demand, it may be among stocks that will accompany and welcome back the bulls along side with honeywell, bagco.

mc nicholas is another stock to buy by active traders, it would have increased by 50% before it will be noticed, i've been following it for two weeks now.

although there is tug of war between buyers and sellers in aiico stock yesterday especially towards the mid period of the trade, the stock is good to enter now, new investors are trying to bid the stock lower so it pays them more. We should see gain in the stock today

Nice analysis. Never knew a company called Mc nichols exists untill today!

@stockbull, well done for †нє Analysis. Now that GEJ has pass †нє Budget into law ΨђåƮ effect will it have on †нє stock market

stockbull:



wapic is about to sell rights issue that may be equivalent to 8% gain for existing investors. Can this blast the stock?
Transcorp also want to raise rights issue and this may one of the forces behind her demand now and an halt put on the downtrend.

union bank hit the highest price in three years,breath heavily.it will definitely relax.
Increase in livestock stock demand, it may be among stocks that will accompany and welcome back the bulls along side with honeywell, bagco.

mc nicholas is another stock to buy by active traders, it would have increased by 50% before it will be noticed, i've been following it for two weeks now.

although there is tug of war between buyers and sellers in aiico stock yesterday especially towards the mid period of the trade, the stock is good to enter now, new investors are trying to bid the stock lower so it pays them more. We should see gain in the stock today

For union bank, they just appointed a new chairman and there is news of shares re-structuring. So they might go on technical suspension soon.

The bulls have returned. Unity, wema, presco, honeywell led d gainers. Even cni gained 2day
So sad ftn cocoa still lost.
Union remains same- please what do u advise? Do I offload union?
ftn cocoa has killed me.

The bulls must stay for a while oo; got some dangote flour today for medium term. Want to go for unity bank or aiico insurance before the week ends. I hope am on the right track