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How to Value Stock

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From Quick Guide: Guide to the Stock Market

Summary: When learning to value stock, the first thing to do is to discover how to read a balance sheet and to familiarize oneself with evaluation method. Determine the value of stock by understanding the fundamentals about a company or business with tips from an investment professional in this free video on financial planning.

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By Phillip Beningoso
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Phillip Beningoso has a four year BA degree majoring in finance and minoring in economics and computer sciences from Kent State University. Federal Licensing included Series 63, seven,...read more

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Video Transcript

"My name's Phillip Beningoso. I'm an investment professional and I'm going to be discussing how to value stock. So just how do you value shares of a company? Should you look at earnings, revenue, cash flow or something else entirely? Do you need to apply one or several evaluation methods to discern what the fair price of a stock is? Anyone can learn to value stock. Now the first thing you should do is learn to read a balance sheet. There are many articles that explore the mechanics of a balance sheet and what each individual item inside of that balance sheet means. It's important to familiarize yourself with this information. Two, is to introduce yourself to evaluation method, details and many and varied ways one can understand the fundamentals about a company or business using earnings revenue, cash flow, equity, dividend deals, and subscriber information such as research reports to analyze this company. Another is return on equity. Equity which takes the net income and divides it by total equity. This should be further investigated because that figure can be utilized in a way that may not be beneficial to the company. And also to look at ROI or ROIC which is the return on investment capital. How much cash can you produce by each dollar of cash that is invested in a company by either shareholders or its lenders. The information provided here is for information purposes only and should not be considered an individualized recommendation or personalized investment advice. Any investments or strategies mentioned here may not be suitable for everyone. My name's Phillip Beningoso and I'm an investment professional."

eHow Article: How to Value Stock

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