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What is Face Value? When you invest in stocks or bonds, you'll often come across the term "Face Value." But what does it actually mean? Face Value (also called "par value" or "nominal value") refers to the basic value assigned to a security by the issuing company. But face value doesn't reflect the market value of a stock or bond. In Bonds: A company issues a bond with a face value of ₹1,000 and promises to pay 6% annual interest. This means the bondholder will receive ₹60 each year, and when the bond matures, they'll get ₹1,000 back the face value. The bond might be bought or sold at different prices (premium or discount) depending on interest rates, but the face value is fixed for repayment. In Stocks: The face value of a stock is a nominal number like 10 or 1. It's not related to the market price, which is driven by factors like demand, supply, and company performance. However, face value plays a role in calculating dividends or splitting shares. Example: If a stock with a face value of ₹10 is trading at ₹500 in the market, the ₹10 represents the base or accounting value assigned by the company, while ₹500 is what investors are willing to pay. Why is Face Value Important? 1- It helps determine dividends and interest payments. 2- It's crucial for bond maturity payments. 3- It's used in stock splits and IPO pricing. #finance #stockmarket

Now to select stocks for investing following things does not work : -EPS: (Net Income-Dividend Payment)/Average Outstanding Shares -PE: Share Price/EPS -PEG: PE Ratio/Growth Rate of its earnings for a specified time period -ROA: Net Income/Average Total Assets -ROE: Net Income/Average Stockholders Equity -ROCE: EBIT/Capital Employed -Debt Equity Ratio: Total Debt/Shareholders Equity -Promotor Holding (with pledge percentage) then what works ? Comment below the answer. I will rectify it .

When you buy stocks, remember that you are buying CAPITAL. The whole point of buying equity is to participate in equity returns, i.e. Net Profit. This stands wildly in contrast to flipping the equity later on for a gain, which is the standard incentive in markets. #valueinvesting

Bonds and stocks are two fundamental investment vehicles with distinct characteristics. ✅Bonds: Essentially a loan to a company, government, or municipality. Investors receive regular interest payments and the principal amount at maturity. They generally offer lower returns but are considered less risky than stocks. ✅Stocks: Represent ownership in a company. Investors share in profits through dividends and capital appreciation. Stocks offer higher potential returns but also come with greater volatility. Key Differences: ✅Risk: Bonds are generally considered less risky than stocks. ✅Return: Stocks typically offer higher potential returns than bonds. ✅Income: Bonds provide regular interest payments, while stock income comes from dividends (optional) and selling the stock at a profit. ✅Priority in Bankruptcy: Bondholders have priority over stockholders in claiming assets if a company goes bankrupt. Understanding these differences is essential for building a diversified investment portfolio that aligns with your risk tolerance and financial goals. #OpenOceansGroup #Finance #Bonds

INVESTING GUIDE TO STOCKS 1O1 BY CK7. A) INTRODUCTION TO THE STOCK MARKET AND AN OVERVIEW OF STOCKS AS A PRODUCT • The stock market is simply where investors come to buy and sell shares of listed or publicly traded companies and unlisted companies, giving them a claim to the assets and earnings tied to the company they have invested in. • Stocks is a more general term referring to an ownership stake in one or many companies while shares on the other hand refer to an ownership stake in just one company. • Basic features of stocks include but are not limited to: >Each share should be assigned a number. >A share should be transferrable. The rules governing moving of shares should be stipulated in a company’s article of incorporation. >The money used to purchase shares is not refundable except for cases of capital reduction or the company’s dissolution. B) THE PROS AND CONS OF INVESTING IN EQUITY I. The pros of investing in equity include but are not limited to: 1. Maximization of income from your investments. 2. Protection of your money from inflation. Inflation is simply erosion of your money or currency’s value. 3. Protection of your money from taxes. 4. Your shares can be used as security for a loan. You and the lender will complete a Pledge Form (CDS 5) and deliver it to your CDA. II. The cons of equity investing include but are not limited to: 1. Market volatility. 2. Need for development of time and expertise. 3. Tax bills, e.g. dividends are taxed at 5%. C) HOW TO INVEST IN THE STOCK MARKET 1. Deciding your preferred account type which consists of cash accounts and margin accounts. 2. Choosing a broker to purchase and sell shares on your behalf. 3. Opening your account. D) OPENING A CDS ACCOUNT • You open a CDS account by completing and signing a securities account opening/maintenance form with your Central Depository Agent (CDA) or broker. The form is called CDS 1. By Yours Truly CK7. • Watch the video in our comments below for additional information. #Info4Bytes #finance #investment #economics #kenya #shares #stocks #stockmarket #nse

What is Earnings Per Share? ~Earnings Per Share (EPS) is a key financial metric that indicates how much profit a company generates for each outstanding share of common stock. How is it calculated? ~EPS = Net Income/Weighted Average Number of Outstanding Shares Calculation Example ~Suppose XYZ Ltd has: Net Income: ₹21,235 crore (for a given financial year) Weighted Average Number of Outstanding Shares: 427 crore shares EPS = 2,12,35,00,00,000/4270000000 shares = ₹49.73 This means XYZ Ltd generates ₹49.73 in profit for each outstanding share of its stock. What is the use of Earnings Per Share? ~Investment Decisions: Investors use EPS to gauge a company's profitability and make informed investment decisions. ~Valuation: EPS is a key component in calculating the Price-to-Earnings (P/E) ratio, which helps determine if a stock is overvalued or undervalued. ~Performance Benchmarking: Analysts use EPS to compare the financial performance of companies within the same industry. #Finance #Investing #StockMarket #FinancialAnalysis #InvestmentTips #Business #Valuation #EPS #PEratio #MarketTrends #InvestmentStrategy #FinancialMetrics #LearnFinance #investments

We can calculate the current yield of any investment, whether it is a bond or a stock, using the following formula: Current Yield = (Current Market Price ÷ Annual Income) ×100 For bonds, the annual income is the coupon payment. For stocks, it's the annual dividend. This formula gives the yield as a percentage of the current investment price.

Since Covid, Many stocks have generated average, below-average or negative returns for their shareholders❗❗ But, Stock with - ✔️Zero debt ✔️Good management ✔️Positive operating cashflows ✔️Increasing reserves ✔️Increasing R&D expense allocation of funds ✔️Good product-market fit They were among the ones who managed to get the tide and were able to create wealth for the shareholders. Also, remaining invested in the good stock during bad times is the Key. #Stockanalysis #personalfinance

Impact of Corporate Earnings on Stock Prices Corporate earnings reports are pivotal in shaping stock prices, offering a critical snapshot of a company's financial performance. These reports provide key metrics such as earnings per share (EPS), revenue, and net income, which significantly influence stock prices through various mechanisms.   https://shorturl.at/fUy9j   #CorporateEarnings #StockPrices #ImpactofCorporateEarnings #Stock #Corporate  

Valuation Shortcut. "We love owning common stocks - if they can be purchased at attractive prices…Unless, however, we see a very high probability of at least 10% pre-tax returns, we will sit on the sidelines." Warren Buffett I know many investors struggle with figuring what is a good valuation at which to buy into a stock. What Buffett is saying here is, if unless they can find a company that has pre-tax earnings yield (profit before tax divided by market cap) of at least 10%, they won't be interested. So, there you have it. A quick and dirty shortcut to finding potentially cheap stocks. However, don't forget that there are many issues to consider. Eg, how likely is it that the company will continue to at least make the same pre-tax return next year? Blessings! #The5000 #Money #Invest #BiblicalFinance #10X10Y #100X20Y