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How to read stock information?

Stock information is provided by various newspapers, magazines, and websites. Any national or regional newspaper with a business section will have the stock information.  Popular sources are Wall Street Journal, Financial Times, New York Times, USA Today, major city newspapers like LA Times, Chicago Tribune, and your local newspaper.  You can also go to stock exchange websites, Yahoo Finance, CNN Money, WSJ.com and many more to check on your favorite stocks.

There are about 15,000 publicly traded US stocks that are tracked and organized by alphabetic order to help you find stock information easily. The stocks are listed by their stock exchanges.  There are three major US stock exchanges – the first and the largest is the New York Stock Exchange Composite or NYSE, the second largest is NASDAQ, and the third is the American Stock Exchange or AMEX. One way to remember the difference is that NYSE and AMEX stock tickers are three letters and NASDAQ tickers are four letters. 

Other important stock exchanges include FTSE100 in the UK, DJ Euro Stoxx in Europe, Nikkei Stock Average in Tokyo (Japan), Straits Times in Singapore, Hang Seng, in Hong Kong, and Bombay Sensex in Bombay (India).

The stock information is easy to read once you understand how to read it. We will take McDonald’s company as an example to walk you through the process of reading the stock information.

Let us get started. You need to know the company name or the ticker symbol of the company. In our case, the company name is McDonald’s and its ticker symbol is MCD.  Newspapers will show you the information organized by columns. Each column header name will tell you what this column information means. Due to space limitations, you will see that the information is sometimes abbreviated or coded to simplify. 

We have split the columns into “Easy and quick read columns” and “Advanced reading columns”. For beginners, we suggest that you first focus on the “Easy and quick read columns”. Once you get comfortable with the information you can start to read the other columns. Also, see “How to read stock tables” below.

Easy and quick-read columns

Ticker Symbol or SYM – Ticker Symbol is a unique set of alphabetic letters that identify a company’s stock. In short, it is also referred as just Ticker. For example, McDonald’s ticker symbol is ‘MCD’, and Walt Disney’s ticker symbol is ‘DIS’. Ticker symbols are used to buy or sell the company stocks on the stock exchange. You will also see the ticker symbols in the financial news.

Company Name or STOCK – This column lists the name of the company. Where the company name is larger than the column space, then the company name is abbreviated to a meaningful level. For example, United Parcel Service could become UtdParcel. 

Bid/Ask – When you buy the stock you pay the Ask price (the higher price) and when you’re selling your stock you receive the Bid price (the lower price).

Close or Last – The close is the last trading price recorded when the market closed on the day. If the closing price changes by more than 5% up or down from the previous day’s close, the entire listing for that stock is bold-faced. MCD closed on Oct 5^th, 2007 at $56.37.

Net Change or Change or CHG – This is the dollar amount change in the stock price from the previous day’s closing price. When you hear about a stock being “up for the day,” it means the net change was positive from yesterday. MCD Net Change from Oct 4^th to Oct 5^th is +0.33 or +0.59%. 

Advance reading columns

Year-to-date % change or YTD % CHG – This means how much the stock price changed since the beginning of the year. For example, we have been tracking MCD stock since the beginning of the year and the % change in the stock price is over +28% year to date as of this week ending October 5^th, 2007.

52-Week High and Low or 52 Hi-Lo – These are the highest and lowest prices at which a stock has been bought or sold over the previous 52 weeks (for one year). Sometimes you will see an arrow or a special mark to show if this stock price is at a new 52-week low or high. MCD’s 52-week High and Low are $56.56 and $39.48.

Day High and Low or Day Hi-Lo– This indicates the price range at which the stock has traded throughout the day.In other words, these are the maximum and the minimum prices that people have paid for the stock. MCD Day High and Low is $56.56 – $55.93.

Trading Volume, Volume, or Vol. – This figure shows the total number of shares traded for the day, listed in hundreds.To get the actual number traded, add “00” to the end of the number listed. High volume means this stock is widely owned or that there is important news about the company that investors want to take advantage of by selling or buying the stock.  You will also notice that large and famous companies typically have larger trade volumes. Above-average trading situations show out-of-normal trading activity that as an investor is important to decide if it is good or bad for the stock. Underlined or bold stock information means large volume change, compared to this stock’s average trading volume. MCD trading volume for the day is 6 million and the average is over 8 million.

Type of stock – You may see a special symbol after the company name for the ticker symbol, such as, ‘pf’.  ‘Pf” means preferred stock and no symbol means it is a common stock. We will cover Common Stock and Preferred Stocks in our later issues.

Dividend Per Share, Dividend Yield, or YLD – This indicates the annual dividend payment per share and is shown as a percentage of price. It is calculated as annual dividends per share divided by price per share. If this space is blank, the company does not currently pay out dividends.  As of Oct 5^th, 2007, MCD’s dividend yield is $1.5 or 2.7%.

Price/Earnings Ratio, P/E, or PE – This is calculated by dividing the current stock price by earnings per share from the last four quarters. MCD P/E as of Oct 5^th, 2007 is 32.53.  What does P/E mean, will be discussed in our later issues.

Each paper has its codes to show specific stock information, and you should take time to read their descriptions. For example, Wall Street Journal has “How to read the stock tables” that tells you what the abbreviation and sign mean.