Merel Finance - Identifying Value Stocks

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Definitions

Here are definitions of common terms related to the stock market and investing:

Annualized return - Annualized return describes the return gained, on average, each year of a multi-year period

P/E Ratio - The Price/Earnings ratio is the most common measure of how expensive a stock is. The P/E ratio is equal to a stock's market capitalization divided by its after-tax earnings over a 12-month period, usually the trailing period but occasionally the current or forward period.

Return on Equity - Return on Equity measures the rate of return on the ownership interest (shareholders' equity) of the common stock owners. ROE is viewed as one of the most important financial ratios. It measures a firm's efficiency at generating profits from every dollar of net assets (assets minus liabilities), and shows how well a company uses investment dollars to generate earnings growth.

Stock Index - A stock market index is a listing of stock and a statistic reflecting the composite value of its components. It is used as a tool to represent the characteristics of its component stocks, all of which bear some commonality such as trading on the same stock market exchange, belonging to the same industry, or having similar market capitalizations.

Value Investing, Identifying Value, U.S. Stock Market, Stock-picking, Fundamental Analysis, Method, Return, Free Stock Picks. Merel Finance is proud to present to investors, every week, 5 Value Stocks. These stocks are selected from the U.S. Stock Markets using a method maximizing long-term returns (buy-and-hold strategy). Consider adding these companies to your portfolio. Merel Finance – Identifying Value and helping you increase your net-worth.

Value Investing - Value investing is a style of investment strategy from the so-called "Graham & Dodd" School. Followers of this style, known as value investors, generally buy companies whose shares appear underpriced (value stocks) by some forms of fundamental analysis; these may include shares that are trading at, for example, high dividend yields or low price/earnings or price/book ratios. The main proponents of value investing, such as Benjamin Graham and Warren Buffett, have argued that the essence of value investing is buying stocks at less than their intrinsic value.