Interest Coverage

Interest coverage ratio measures a company’s ability to pay the interest on its outstanding debt. A high ratio means that the company will have no trouble paying the interest expense, while a low ratio indicates a potential default on the loan payments. Lenders and creditors use this ratio to determine if they would be willing… [Read More]

Do You Make These Mistakes With P/E and Other Ratios?

Anyone who has ever tried to value a company has used some rules of thumb when conducting the financial ratio analysis. For me personally, these form a base upon which various screens and shortlists are structured. Looking for undervalued stocks can at times feel link looking for a needle in a haystack, and these rules… [Read More]

Financial Ratios

Financial ratios allow an analyst to quickly analyze a business and its operations and understand the financial situation of a company. These ratios answer many different kinds of questions that can be asked about a business performance. Normally, many of these ratios need to be understood in the context of a benchmark, such as, past… [Read More]

Easy Way to Understand What is Value Investing

Value investing as an investment practice was popularized by Benjamin Graham and David Dodd in their 1934 classic treatise “Security Analysis”. The idea itself rests on a very simple premise: Stock prices tend to differ from the intrinsic value of the company in the short term. In the long term however, the stock price and… [Read More]

What is Book Value Per Share

What is Book Value per Share Book value per share is simply (Common Stockholder’s Equity / Number of Shares of Common Stock) If there are no preferred shares outstanding, Total Stockholder’s Equity can be used in place of Common Stockholder’s Equity. The Balance Sheet is expressed as the following: Assets = Liabilities + Equity Therefore,… [Read More]

January Effect Definition

The January Effect is named after an observation made in 1942 by banker Sydney Wachtel. He noted that small stocks have tended to outperform the market in the month of January since 1925. The hypothesis rests on the belief that in December stocks tend to decline as investors sell off their losing positions to harvest… [Read More]

Listen to the Top Investors in the US and Their Best Ideas for 2016

If you’re a professional or self-directed investor, regardless of sector or style, I want to let you know about a unique online event coming up that I’m excited about and honored to be included as a speaker. Eight successful investors will share how they approach investing as an overall philosophy and what their highest conviction… [Read More]