Question

Different value with investors do find out the value of a stock based on their own philosophy or list of factors? why is this important to the investors?

Answer 1

Value of Stock

Investors are facing difficulty on without knowing the real time for buying or selling the stocks in the market.if the investment decisions are only taking the basis of a market value of a share/stock,the investors may losses their opportunity to buy or sell the securities.there are ways to evaluate stock's company so the investors will be reduce the possibilities for sale the stocks and missing out on future profit.

Factors

• ​​​​​​social,political,and technological factors affecting business
• Economic condition,it includes availability of raw material,new competition etc...
• Demand and supply of shares
• Nature and size of the business
• Availability of sufficient asset over liabilities
• Income yielding capacity of the business or company

Importants

1. Opportunity
2. Profiting
3. Price to Earn ratio
4. Market value

1.Opportunity

On the basis of some metrics by looking the under valued or over valued stocks in the market investors can use the opportunity of Earning profit .after the financial crisis in USA the stock market has been rebounded.

2.Profiting

An investor may miss the opportunity cash in on investment and profit without knowing the share price is over valued .investor might windup owing a worst stock with a price that has now here to go but down.this became the case in 2012 when the US federal reserve provided a stimulus to the economy.

3.Price to earn ratio

​​​​​​​By looking a P/E ratio of the company ,an investor can invest in a stock by missing the true value of a stock or wind up investing in a wrong companies.a P/E ratio is a measure of how much investors are willing to pay company stock by looking the profitability.it is use full to compare the stock price of one industry to same another industry or company

P/E ratio = market price of common share /Basic EPS

This ratio is not meaningful when a company is facing losses because the P/E would be negative since earning are negative.

​​​​​​​​​​4.Market value

On the stock market the value of shares price may be volatile due to investors demand or supply of shares.investor can be decide by looking it's present market value.buy and sell stop order preventing the financial losses or it will allow to investors in a secure