Analyzing two companies of the same industry

source:http://getyourbizsavvy.com/

 

The best way to determine whether one company is better than the other is by comparing one to another company of the same industry.

For illustration purposes lets look at ABS and GMA7, Philippines top channels.

ABS   GMA7  Closing Price 08/06/2010             45.30           5.95 EPS               2.23           0.58 P/E %             20.36         10.26 52 week range  25.50-45.30   5.60-8.80  Par               1.00           1.00 2009 Income  1.7B   2.8B  Board Lot           100.00       100.00

Based on the data above one can make decision which stock to buy.

If you look at the two there is a huge difference in the price. Higher EPS indicates two things, one is that the other company has a bigger net income and the other company may have a smaller number of shares outstanding. As you compare GMA7 has a higher net income than ABS but ABS has higher EPS meaning ABS has a smaller number of shareholders...meaning the income is shared by a smaller number of people. P/E % of ABS is higher than GMA7 which might indicate that more people have confidence in ABS but it also means because of this confidence level ABS might be overpriced as compared to GMA7.  With these bits of info one can decide which to invest in. One pointer is that both companies are doing well... both has a high P/E %, Price range is wide meaning catching either stock at its lowest could possible go up again to that high level giving you profit when the timing is right. The only decision point now will be how much free money can you put in. If you have a limited fund GMA7 might be a better stock to buy but if funds are handy go for ABS. Again the above simple analysis are just sample analysis. Every person has his own way of looking at the data. Others rely on Technical Analysis which is a price change based analysis which is studying the price trend and looking at the buy and sell indicators.

Analyzing two companies of the same industry

source:http://getyourbizsavvy.com/

 

The best way to determine whether one company is better than the other is by comparing one to another company of the same industry.

For illustration purposes lets look at ABS and GMA7, Philippines top channels.

ABS   GMA7  Closing Price 08/06/2010             45.30           5.95 EPS               2.23           0.58 P/E %             20.36         10.26 52 week range  25.50-45.30   5.60-8.80  Par               1.00           1.00 2009 Income  1.7B   2.8B  Board Lot           100.00       100.00

Based on the data above one can make decision which stock to buy.

If you look at the two there is a huge difference in the price. Higher EPS indicates two things, one is that the other company has a bigger net income and the other company may have a smaller number of shares outstanding. As you compare GMA7 has a higher net income than ABS but ABS has higher EPS meaning ABS has a smaller number of shareholders...meaning the income is shared by a smaller number of people. P/E % of ABS is higher than GMA7 which might indicate that more people have confidence in ABS but it also means because of this confidence level ABS might be overpriced as compared to GMA7.  With these bits of info one can decide which to invest in. One pointer is that both companies are doing well... both has a high P/E %, Price range is wide meaning catching either stock at its lowest could possible go up again to that high level giving you profit when the timing is right. The only decision point now will be how much free money can you put in. If you have a limited fund GMA7 might be a better stock to buy but if funds are handy go for ABS. Again the above simple analysis are just sample analysis. Every person has his own way of looking at the data. Others rely on Technical Analysis which is a price change based analysis which is studying the price trend and looking at the buy and sell indicators.

Analyzing two companies of the same industry

source:http://getyourbizsavvy.com/

 

The best way to determine whether one company is better than the other is by comparing one to another company of the same industry.

For illustration purposes lets look at ABS and GMA7, Philippines top channels.

ABS   GMA7  Closing Price 08/06/2010             45.30           5.95 EPS               2.23           0.58 P/E %             20.36         10.26 52 week range  25.50-45.30   5.60-8.80  Par               1.00           1.00 2009 Income  1.7B   2.8B  Board Lot           100.00       100.00

Based on the data above one can make decision which stock to buy.

If you look at the two there is a huge difference in the price. Higher EPS indicates two things, one is that the other company has a bigger net income and the other company may have a smaller number of shares outstanding. As you compare GMA7 has a higher net income than ABS but ABS has higher EPS meaning ABS has a smaller number of shareholders...meaning the income is shared by a smaller number of people. P/E % of ABS is higher than GMA7 which might indicate that more people have confidence in ABS but it also means because of this confidence level ABS might be overpriced as compared to GMA7.  With these bits of info one can decide which to invest in. One pointer is that both companies are doing well... both has a high P/E %, Price range is wide meaning catching either stock at its lowest could possible go up again to that high level giving you profit when the timing is right. The only decision point now will be how much free money can you put in. If you have a limited fund GMA7 might be a better stock to buy but if funds are handy go for ABS. Again the above simple analysis are just sample analysis. Every person has his own way of looking at the data. Others rely on Technical Analysis which is a price change based analysis which is studying the price trend and looking at the buy and sell indicators.

PSE Website Part 8: Knowing who manages the companies that you invested

 source: http://www.cmu.edu/
In business it is important that you trust the persons that manage the company. Their educational and professional background maybe impressive but if investors don't trust them it will be hard to see growth due to lack of investor confidence. 

One good example is Steve Jobs of Apple. Jobs was the primary innovator at Apple yet when his attitude turns from good to bad the company started to fall and eventually led to his expulsion to the top post. He learned his lessons and was able to get the trust of the people inside Apple and eventually the investing public. Since then Apple lunch one of the greatest gadget, The iPhone and has been a key player in technological innovations.

To see the managing team of your stock's company you can check them by going to the  the Board of Directors and Management link in the Corporate Information link:

Note: the use of ABS Corporate information is for illustration purposes only.

PSE Website Part 8: Knowing who manages the companies that you invested

 source: http://www.cmu.edu/
In business it is important that you trust the persons that manage the company. Their educational and professional background maybe impressive but if investors don't trust them it will be hard to see growth due to lack of investor confidence. 

One good example is Steve Jobs of Apple. Jobs was the primary innovator at Apple yet when his attitude turns from good to bad the company started to fall and eventually led to his expulsion to the top post. He learned his lessons and was able to get the trust of the people inside Apple and eventually the investing public. Since then Apple lunch one of the greatest gadget, The iPhone and has been a key player in technological innovations.

To see the managing team of your stock's company you can check them by going to the  the Board of Directors and Management link in the Corporate Information link:

Note: the use of ABS Corporate information is for illustration purposes only.

PSE Website Part 8: Knowing who manages the companies that you invested

 source: http://www.cmu.edu/
In business it is important that you trust the persons that manage the company. Their educational and professional background maybe impressive but if investors don't trust them it will be hard to see growth due to lack of investor confidence. 

One good example is Steve Jobs of Apple. Jobs was the primary innovator at Apple yet when his attitude turns from good to bad the company started to fall and eventually led to his expulsion to the top post. He learned his lessons and was able to get the trust of the people inside Apple and eventually the investing public. Since then Apple lunch one of the greatest gadget, The iPhone and has been a key player in technological innovations.

To see the managing team of your stock's company you can check them by going to the  the Board of Directors and Management link in the Corporate Information link:

Note: the use of ABS Corporate information is for illustration purposes only.