What is a special situation?
A special situation, as we define it, is a security whose market price stands to rise sharply as a result of a major prospective gain in underlying earning power.
Do the Companies recommended by the value line special situations pay dividends?
(In most cases the companies recommended by The Value Line Special Situations Servicewill choose to reinvest their earnings rather than to pay cash dividends.) 7.
Why the value line special situations service?
The aim of The Value Line Special Situations Service is to reduce the high risk associated with special situa- tion investing via careful evaluation and analysis. It must be recognized, however, that if high risk were not present, wide appreciation potential would not be present either.
How is the potential stock value calculated?
The potential stock value is arrived at by applying to the earnings projection an appro- priate, in Value Line’s opinion, price-earnings multiple.
What are the fundamental factors of capital market?
These fundamental factors relate to the overall economy or a specific industry or a company. The performance of the securities that represent the company can be said to depend on the performance of the company itself. However, as companies are a part of industrial and business sector, which in turn are a part of overall economy, so even the economic and industry factors can affect the investment decision. The selection of an investment will start with fundamental analysis. Fundamental analysis examines the economic environment, industry performance and company performance before making an investment decision.
What is a break out in stock market?
This is indicated by drawing a line, which is a period of consolidation, when the share prices move sideways within a range of about 5% of the share price. Eventually a break out will occur and it is often suggested that the longer the period of consolidation, the greater will be the extent of ultimate rise or fall.
What is investment in financial terms?
Investment is a financial activity that involves risk. It is the commitment of funds for a return expected to be realised in the future. Investments may be made in financial assets or physical assets. In either case there is the possibility that the actual return may vary from the expected return. That possibility is the risk involved in the investment.
What is the peak price of a stock called?
The peak price of the stock is called the resistance area. Resistance level is the price level to which the stock or market rises and then falls repeatedly. This occurs during an uptrend or a sideway trend. It is a price level to which the market advances repeatedly but cannot break through. At this level, selling increases which causes the price fall.
What is fundamental analysis?
Fundamental analysis is the examination of the underlying forces that affect the well being of the economy, industry groups and companies. As with most analysis, the goal is to develop a forecast of future price movement and profit from it. At the company level, fundamental analysis may involve examination of financial data, management, business concept and competition. At the industry level, there might be an examination of supply and demand forces of the products. For the national economy, fundamental analysis might focus on economic data to assess the present and future growth of the economy.
What is charting in technical analysis?
Charting is the basic tool in technical analysis, which provides visual assistance in defecting changing pattern of price behaviour. The technical analyst is sometimes called the Chartist because of importance of this tool. The Chartists believe that stock prices move in fairly persistent trends. There is an inbuilt inertia, the price movement continues along a certain path (up, down or sideways) until it meets an opposing force due to demand-supply changes. Chartists also believe that generally volume and trend go hand in hand. When a major ‘up’ trend begins, the volume of trading increases and also the price and vice-versa.