1.04 – Reading & Understanding Stock Tables
Stock tables found in major business publications like the Wall Street Journal and Investor’s Business Daily are rich sources of information that can transform you into a savvy investor—if you know how to read them. These tables provide crucial data not only for selecting promising investment opportunities but also for monitoring the performance of your existing investments.
Trying to decipher stock tables without understanding what you’re looking at is like trying to read War and Peace backwards through a kaleidoscope—nothing makes sense. But with a little guidance, you can easily make sense of these tables. Below is a sample stock table (Table 1-1), followed by explanations of each column to help you understand what you’re looking at.
A Sample Stock Table
52-Wk High | 52-Wk Low | Name (Symbol) | Div | Vol | Yld | P/E | Day Last | Net Chg |
21.50 | 8.00 | SkyHighCorp (SHC) | 3,143 | 76 | 21.25 | +.25 | ||
47.00 | 31.75 | LowDownInc (LDI) | 2.35 | 2,735 | 5.9 | 18 | 41.00 | -.50 |
25.00 | 21.00 | ValueNowInc (VNI) | 1.00 | 1,894 | 4.5 | 12 | 22.00 | +.10 |
83.00 | 33.00 | DoinBadlyCorp (DBC) | 7,601 | 33.50 | -.75 |
While stock tables in newspapers might differ slightly in format, they generally provide the same essential information. Updated daily, these tables are usually referenced after you’ve already decided on a stock, allowing you to check its most recent price and performance.
Understanding the 52-Week High and Low
The “52-Wk High” column indicates the highest price a particular stock has reached in the most recent 52-week period. This information helps you assess where the stock currently stands relative to its recent peak. For instance, SkyHighCorp’s (SHC) stock has peaked at $21.50, while its latest price is $21.25, suggesting it’s trading near its high.
Conversely, DoinBadlyCorp’s (DBC) stock shows a significant drop—from a 52-week high of $83 to a current price of $33.50. Such a steep decline warrants further investigation. If the company is fundamentally strong, this could be a buying opportunity. However, if the decline reflects deeper issues, it might be wise to steer clear.
The Importance of the 52-Week Low
The “52-Wk Low” column reveals the lowest price that a stock has reached during the most recent 52-week period. This figure, in conjunction with the 52-week high, gives you a range within which the stock has fluctuated. For example, DBC’s current price of $33.50 is close to its 52-week low of $33, indicating that it’s trading near the bottom of its recent range.
These high and low prices provide context for understanding a stock’s volatility and potential risks. However, they are just starting points; deeper research is needed to determine whether a stock’s low price represents a buying opportunity or a warning sign.
Deciphering the Name and Symbol
The “Name (Symbol)” column is straightforward—it lists the company’s name (often abbreviated) along with its stock symbol. Familiarizing yourself with a stock’s symbol is essential for quickly locating it in financial tables and for all stock-related communications, whether you’re getting a quote or making a trade.
Understanding Dividends
The “Div” column shows the dividend payout per share for a given stock. Dividends are payments made to shareholders, usually on a quarterly basis. For example, LowDownInc (LDI) pays an annual dividend of $2.35 per share, which translates to $58.75 per quarter for every 100 shares owned.
Dividends are particularly important for income-focused investors. A stable or growing dividend often indicates a financially healthy company. Companies that don’t pay dividends usually reinvest profits to fuel growth, which is why growth-focused investors might choose them.
Interpreting Volume
“Vol” indicates the trading volume, or the number of shares traded for a particular stock on a given day. For example, SkyHighCorp (SHC) had a trading volume of 3,143 shares. Volume is a key indicator of market activity. An unusually high volume can signal that something significant is happening with the company—either positive or negative.
Large fluctuations in volume often correspond with major news, such as earnings reports or new business deals. For instance, a spike in volume might occur when a company announces better-than-expected earnings, a major client acquisition, or the launch of a new product.
Yield as an Indicator of Return
“Yld” refers to the yield, or the dividend expressed as a percentage of the stock’s current price. For income investors, yield is a critical metric. In our sample table, ValueNowInc (VNI) has a yield of 4.5%, which is calculated by dividing its $1 dividend by its $22 stock price. As stock prices fluctuate, the yield changes as well, making it an important factor to consider when buying or selling dividend-paying stocks.
Understanding P/E Ratios
The P/E ratio, or price-to-earnings ratio, is a widely used metric that compares a company’s stock price to its earnings per share. A lower P/E ratio generally suggests that the stock is undervalued, while a higher P/E ratio might indicate that the stock is overvalued. For instance, ValueNowInc (VNI) has a P/E ratio of 12, which is considered low, whereas SkyHighCorp (SHC) has a P/E of 76, making it relatively expensive.
Day Last and Net Change
The “Day Last” column shows the stock’s closing price on the day in question, while “Net Chg” indicates the change in price from the previous day’s close. For example, SHC closed at $21.25, up 25 cents from the previous day. Monitoring these changes helps you track short-term trends and market reactions.
Conclusion
Understanding stock tables is a fundamental skill for any investor. By learning to read and interpret these tables, you gain valuable insights into the performance of your investments and the overall market. Whether you’re a seasoned investor or just starting, mastering this skill will help you make more informed and strategic investment decisions.
