Some tools that might be of use to you

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 source: http://www.iii.co.uk

Currently there are two tools I have placed in my TOOLS tab above. One is an Excel file I created to aid the computation of  TP or Target Price if you want to achieve a certain percentage of gain or profit(this is based on COL and FMS rates only). The other is a paid service that sends you the combined analysis of most stock analyst and aligning fundamental and technical analysis.

The Stock Computation Tool (click here to download)

This Excel file is designed to generate an estimated target selling price. All you need is to plug in the number of shares purchased, its cost and the desired gain when selling. The rates for the different charges are based on the rates applied by most online stockbroker participating in the Philippine Stock Exchange. 

Expert Stock Screener by APF Trading

This tool is a service provided by APF Trading. The latest analysis is emailed to you for your decision making whether to buy or sell a stock. Its main feature is the alignment of both fundamental and technical analysis, when these two align a "YES" note is at the end to signify that such criteria is met.

When in doubt dont buy a stock

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source: http://www.ipprospective.com

I have been out for quite some time... so here am I again...

At times one may be hesitant and then let the day pass then we learn that the stock we are planning to buy just drop further or if worst bad things happen and the company started to go from one problem to another.

Back then the SEC(Securities and Exchange Commission) made an ad on all TV stations regarding the part of the public to know more about the companies that one may invest into. The message was" Invest: Investigate". That time a lot of Pre-need and insurance companies are closing one after the other and one has been all around the news for the alleged embezzlement of the officers of the company.

So I guess you are thinking then we shouldn't invest in companies anymore because they might close down run away with our money. The thing is as an investor one should always do what we call due diligence. What is "due diligence" then?

Wiktionary defines it as:

A legally binding process during which a potential buyer evaluates the assets and liabilities of a company.

Investopedia defines it as:

1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to a sale.

2. Generally, due diligence refers to the care a reasonable person should take before entering into an agreement or a transaction with another party. 

In a due diligence this is where audit and Fundamental analysis comes. But such is too hard to do so for ordinary investors like us we should always check their Financial statements that is filed to the SEC. 

 source: http://nrgshift.com

At least we can check how is the standing of the company. 

Is it Liquid(by means of the Current Ratio or Working Capital Ratio which should be at less 1:1)? 

How big its Liability in relation to Shareholder's Equity(by means of  Debt to Equity Ratio that shows if such company is debt strapped that is the likelihood of control is to creditors)? 

Is it Profitable(by means of the Profit and Loss Statement), Is it growing(by comparing This year from last year which is commonly known as Fluctuation Analysis) .

Again that is why when picking stock to invest into one should make a background check on the company. Some stocks have not so good fundamentals and performance and thus they end up into what they call speculative stocks. Investors and players speculate that a good news about the company will make a short uptrend thus players buy it at a lower price and sell it once the price goes 2-5% up. They use volume to profit from such. But as an investor in which one looks at the long term benefits of an investment one should always do what we term "home work".

Again a reminder to do due diligence, invest in fundamentally sound company, invest only free cash, and trade at your own risk.

Investing word of the day: Intrinsic value

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 source:http://dowjonesstockinvesting.com/

Intrinsic value

(source:http://www.investorwords.com/)

1. The actual value of a security, as opposed to its market price or book value. The intrinsic value includes other variables such as brand name, trademarks, and copyrights that are often difficult to calculate and sometimes not accurately reflected in the market price. One way to look at it is that the market capitalization investors are willing to pay for the company) and intrinsic value is the value (i.e. what the company is really worth). Different investors use different techniques to calculate intrinsic value.

2. The amount by which a call option is in the money, calculated by taking the difference between the strike price and the market price of the underlier. For example, if a call option for 100 shares has a strike price of $35 and the stock is trading at $50 a share than the call option has an intrinsic value of $15 share, or $1500. If the stock price is less than the strike price the call option has no intrinsic value.

3. The amount by which a put option is in the money, calculated by taking the difference between the strike price and the market price of the underlier. For example, if a put option for 100 shares has a strike price of $35 and the stock is trading at $20 a share than the put option has an intrinsic value of $15 per share, or $1500. If the stock price is greater than the strike price the put option has no intrinsic value. 

In simple terms it is the perceived value by the general investing public. Investors wants to buy such stock because they believe that such stock has a higher capability to generate income in the long run. Market price may change from time to time but stocks with intrinsic value will always perform will in spite of any financial crisis.

Correction: Starting Bid and Ask price

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source: http://quezi.com/

If you remember my post regarding the rules of the fluctuations of the bid and ask quotes, there is a clarification I have to make. Click here to re-read PSE website: Board Lot Table Part 5.

It has to do with where would the fluctuation start based on the last trade. 

In our example BPI's last trade 43.00 we should know if this is a buy or sell transaction. It is important to know because that price will be the start of the fluctuation. So if the 43.00 was a buy transaction the price quote will be 43.00, 42.50, and 42 for the buy side and 43.50, 44.00, and 44.50 for the sell side. If it was a sell then 42.50, 42.00, and 41.50 will be the buy side and 43.00, 43.50, and 44.00 for the sell side.

Also remember that this rule applies every time a new transaction occurs. So if during the trading hours somebody was able to sell then that will be the new basis of the fluctuations. Simple rule yet so helpful in determining how much can you purchase or until what price can you sell your stock during trading hours.