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It is importance to understand these different metrics in evaluating a security (stock). But do not be overwhelmed, many of these terms are passive and only need to be viewed annually or once a quarter. In most cases, we will use the information to determine whether it is worth investing in a company. Once we have a list of securities, we only need to check these figures annually, sometimes quarterly, to see if the status quo has changed.
By understanding these terms, we can determine whether a company has always been good and will benefit from a catalyst (change in the company, economy, or opportunity) or if they have not shown anything substantial and is purely a pump and dump meme stock.
Terms:
Market Cap
Forward P/E (Upcoming Price to Earnings Ratio)
Quick Ratio (Cash and equivalents + marketable investments + Accounts Receivable) / Current Liabilities
Current Ratio (Current Assets/Current Liabilities)
Earnings Per Share
PEG (Price to Earnings Growth)
Insider Ownership
Institutional Ownership
Shares Outstanding
Shares Float
Short Float (Percentage of shares that are shorted - betting that the price goes down)
Short Ratio (How many days for Short Float to buyback their shares)
Target Price (Average price that analysts believe the stock/security is worth)
52W Range (52 week range of prices: high and low)
52W High / 52 W Low
RSI (Relative Strength Index)
Average Volume vs Relative Volume vs Volume/Current Volume
ATR (Average True Range)
Finviz Basics
Finviz Basics
We will cover more settings in class to cover the following
Navigating all of Finviz
Tailoring your settings to your strategy
Analyzing charts to find noteworthy stocks
While many people often look for some huge breakout to quickly follow, I encourage you to scour stocks that you have already vested as being top companies within their industry. Get to know their charts and what impacts their company to be able to predict future price action.
Here is a great written tutorial on using finviz and how to scan: How to find the Best Trending Stocks for Swing Trading
Homescreen
Homescreen
Showcases a Heatmap on the right (Green - Up, Red - Down)
Top show the DOW, NASDAQ, and S&P 500
Just below the charts. you will see the following statistics
Advancing vs Declining (Stocks that are increasing vs decreasing in price)
New High vs New Low (stocks that are reaching new highs vs new stocks that are at all new lows)
Above or Below the SMA50
Above or Below the SMA200
Bull Markets will have a majority of the stocks above the SMA200, more stocks approaching New Highs, and should have more stocks advancing (individual stocks increasing in value - price increasing).
Bear Markets will have a majority of the sticks below the SMA200 , more stocks approaching New Lows, and more stocks declining (individual stocks decreasing in value - price dropping).
Groups
Groups
Similar to Stock Charts, except it offers the ability to click on the industry to showcase stocks
Sortable Charts
Sortable Tables based on financials, fundamentals, performance, technical analysis
When scouring stocks, sort by volume; low volume offers lower liquidity and poorer bid/ask spreads
Institutional Ownership vs Industry Ownership
Institutional Ownership vs Industry Ownership
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