Stock Dissection Terminology

While going through the Stock dissection you can see a number of terms on which we analyze the stock ,this article goes through each yardstick and explains its significance in our journey to Financial Freedom. 

Piotroski Score 

  On a scale of 0-9 the healthiness of a firm is determined . With 0 being longest and 9 being the highest .  It is better to invest in stocks where the Piotroski score is above 6 (Unless the company is related to Banking ,Financial Services ) . 

While investing if you find the Piotroski score is below 6 , please do extra due diligence on the same

Graham Number 

  If Graham Number is less than Current Market Price the stock is undervalued , In the opposite scenario the stock is overvalued.

CMP

 CMP is Current Market Price of the stock 

Face Value 

It is also known as nominal value .Normally we can see four different levels of Face Value 1 ,2 , 5, 10 in Indian Stock Market . 

If the face value is 1 further stock split is unlikely a bonus or reverse stock split is possible and for Face Value 10 Stock split and bonus are possible options.

Industry & Niche

     It is always advisable to select an industry we are familiar with while we are investing , it will give us a better idea of its working , Pros & Cons

 A niche can set this company apart from its peers .

Market Capitalization

           Based on the market capitalization the companies are classified into micro cap , small cap . mid cap and large cap 

Market capitalization is equal to the share price multiplied by the number of shares outstanding.

Ownership

 Ownership by prominent Foreign / Domestic Institutional Investors is an indicator that the company is in good hands. 
 
If people who make their living by investing in the stock market are satisfied with the company , we can also look into it.