What should stock market investors glean from quarterly results of companies and besides previous company earnings track record and corporate results. A primer on how earnings track record impact stock prices.
UDAYAN RAY Welcome to FundooMoney, your 24X7 buddy on all matters related to personal finance. In this web series we are discussing various aspects an investor needs to keep in mind while investing in stocks. In a moment we will start discussing the various things a person needs to look at in a company’s earnings.
Now for this segment, we have with us stocks expert Mohit Satyanand. He will explain to us some of the critical things that one needs to keep in mind when it comes to a company’s earnings. Welcome to FundooMoney Mohit!
MOHIT SATYANAND Thanks, thanks Udayan, pleasure to be here.
UDAYAN RAY Mohit, a lay investor gets to see these words, hear these words, quarterly results and company earnings. Now how does a lay investor make sense of this? What is the implication of all this? And what are the key things a person should be looking at? MOHIT SATYANAND So as a shareholder what it means is that I have a share in the earnings of the company. The percentage share that I have is related to the percentage of the company’s shares that I own. Therefore, what I am looking at is in the future how much money will the company be making? That is what I am interested in. I am not interested in what the company has made in the past, except in so far as that helps me understand the prospects of the future. And that’s why, even though it seems very simplistic, the first thing that I need to look at is earnings per share. What is the current level of earnings per share of the company?
UDAYAN RAY So basically the critical thing one needs to keep in mind as you’re putting out is what is the kind of earnings a company is making for every share a person is holding.
MOHIT SATYANAND That’s right.
UDAYAN RAY Okay. Now is there a particular place a person should be looking at to get this information?
MOHIT SATYANAND See today there is absolutely no shortage of data sources. If anything there are too many data sources. The simplest is to go to the stock exchange websites. There’s the BSE, the Bombay Stock Exchange, and the NSE, the National Stock Exchange. They have all the data. They have the data extremely well arranged. You can look at the data by quarter. You can look at the data by year. You can download the annual reports of the company there’s absolutely no shortage of data.
UDAYAN RAY Well thank you so much Mohit. This information will surely be useful. If you think we have missed out something, you can just go down to the comments section and give your comments. And of course if you like our videos don’t forget to click on the like button and also subscribe to our channel.
