In this article, we’re going to get an overview of how to read stock numbers. We’ll start by exploring the different sources of information for reading stocks. And then we’re going to talk about the essential numbers that are involved in reading stocks.
Here’s everything we’re gonna cover:
Where to Find Stock Information?
So firstly, where exactly, can you find and read information about stocks?
Well, obviously there are loads of different websites on the internet and over time, you may well have your own preferences and preferred websites.
But the top five, most commonly used financial data websites for people who read and analyze stocks are:
By no means are these the only financial data websites…
But they are certainly the biggest and most popular financial data websites that both professional investors and retail investors tend to rely on for stock information.
And in the context of information about stocks, all 5 websites are pretty consistent across the board.
How Do You Find Stock Symbols?
Most financial data websites will give you stock symbols when you search for a company by its name.
For example, let’s say you pop into Yahoo! Finance and search for “Apple” like this…
Notice that Yahoo! Finance is displaying the company name along with the stock symbol, “AAPL”.
The stock symbol is also known as its “ticker”, and that tends to be the more commonly used term, too.
What is a Ticker?
A ticker is just a unique firm identifier. Every single publicly listed company will have its own ticker. It’s usually just a bunch of letters that relate specifically to one company, for example:
- TSLA for Tesla Inc.
- AAPL for Apple Inc.
- FB for Facebook
- SPOT for Spotify
Sometimes, tickers can have numbers.
Take the ticker B9A.BE which relates to a company called Bio Arctic. It’s not common for tickers to have numbers, but it’s certainly not rare, either.
If you don’t know the ticker for a stock, you can of course just search for the company by the name as well.
But as you get used to it, chances are you’ll just go for the ticker because it just ends up being a little bit easier.
Once you search for a company by name or ticker, you’ll be able to get data/information for that specific stock.
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Getting Stock Information
Let’s look at an example together, working with Tesla stock on Yahoo! Finance. Go ahead and search for either “Tesla” or “TSLA” like this:
Once you select Tesla, you’ll be redirected to this URL on Yahoo! Finance: https://finance.yahoo.com/quote/TSLA
While there is a LOT of information on that page, let’s just zoom in on the core stock information.
That information is inside the “Summary” tab and it looks like this for Tesla (note that it could be a tad bit different if Yahoo! Finance has made changes to its user interface):
How to Read Stock Numbers
Okay, so you’ve now got the stock price information for Tesla. Remember that, although we’re looking at one stock, it’s the same story for all stocks in the stock market.
So feel free to pick another stock if you’re not a fan of Tesla! Let’s now think about how to read stock numbers, starting from the absolute basics.
What do the numbers mean in the stock market?
The stock numbers you’re seeing in the image above include:
- Previous Close
- Open
- Bid
- Ask
- Day’s Range
- 52 Week Range
- Volume
- Avg. Volume
- Market Cap
- Beta (5Y Monthly)
- PE Ratio (TTM)
- EPS (TTM)
- Earnings date
- Forward Dividend & Yield
- Ex-Dividend Date
- 1y Target Est
That’s a lot of information, but the good news is that you’ll see the same information for any stock you choose! And that holds anywhere in the world!
So once you get your head around how to read stock numbers for a single stock, you’ll be able to read the numbers for pretty much any stock.
Let’s now consider what the different numbers mean, starting with the stock price itself.
What Does the Stock Price Mean?
Before we get into what does the stock price mean, let’s be clear on which number represents the stock price.
In the context of Tesla, at the time of writing, the current stock price is the $673.58 number you see here:
That means you would need to pay approximately $673.58 to buy 1 share of Tesla.
A stock is just a share or a financial contract, or a piece of paper, that tells you that you own a teeny tiny fraction or a teeny tiny part of a company.
So if you bought one share in Tesla, then that means that you own a minuscule small part of Tesla.
But by owning that share, however, minuscule the share ownership is, you do get entitled to certain rights and certain privileges.
What Are The Numbers Next to The Stock Price?
Numbers next to the stock price typically shed light on the stock’s immediate performance.
For example, notice that there are 2 numbers right next to the stock price, including:
- “+110.58”, and
- “+19.64%”
In this context, +110.58 shows us that Tesla’s stock price increased by $110.58 since the previous close.
In fact, this can be verified by comparing the current stock price of $673.58 to the previous close of $563
Notice that $673.58 – $563 = $110.58
This +110.58 then, is a dollar value, or a dollar term. It’s the change in the value of the stock price, expressed in dollar terms. Some people tend to call these “points”, but at least in the context of individual stocks, this is not entirely correct.
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We’ll touch more on “points” in the stock market further down. For now, let’s think about the other number you can see.
The other number, +19.64% is telling us the same information as the +110.58, except that it’s in percentage terms.
In other words, we can see that Tesla’s stock price increased by 19.64% compared to its previous close.
This too can be verified. Just take $110.58 and divide it by the previous close of $563. What do you get? You get 0.1964120782, which is approximately equal to 19.64%
Now, notice that there are some more numbers next to the stock price. In the image above, we can see:
- “667.61”
- “-5.97”, and
- “-0.89%”
What do these numbers mean? They’re identical to what we saw just earlier, except that instead of “ordinary trading” data, these relate to pre-market trading.
Pre-market trading is trading that takes place before markets officially open.
Okay, now that you know what the numbers next to the stock price broadly mean, let’s get into some specifics.
What Does 1 Point Mean in the Stock Market?
Recall just earlier, we said that some people refer to changes in the stock price as “points”.
The “point” in the stock market varies depending on whether you’re looking at:
- an individual stock, or
- the stock market as a whole
If you’re looking at an individual stock, then 1 point would mean 1 dollar, 1 penny, 1 rupee, 1 yen, or 1 of whichever currency the stock trades at.
And because it’s a currency-based value, it’s best to avoid calling it a “point”.
If, on the other hand, you’re looking at the stock market as a whole, then 1 point does not necessarily mean 1 dollar or any currency value.
You could interpret it as a dollar value because the stock market as a whole is nothing but a weighted average of the prices of multiple stocks.
The number of stocks that make up the “stock market” varies depending on which stock market index you’re looking at.
For example, the S&P500 stock market index is made up of the top 500 companies in the US.
The FTSE100 stock market index is made up of the top 100 companies in the UK.
But the point is… because the stock market index as a whole is nothing but a weighted average of the prices of multiple stocks, you could interpret it as a dollar value.
Many people choose to interpret it more in terms of “points”. Thus, if the S&P500 increased from say, 4,000 to 4,198, some might say that the index increased by 198 points.
What Does the Percentage Mean in Stocks?
Let’s now think about what the percentage change in stocks actually means. Recall that we described the +19.64% figure (see image below) as the percentage change in the stock price, compared to the previous close.
This percentage change is actually called the “stock return”. Strictly, it’s the daily stock return since we’re looking at daily data here.
We’ve got a whole other article on how to calculate stock returns, so do give that a read for more information.
In a nutshell, the percentage change in stocks means ‘returns’. And returns show you the amount of money you make from your investment, expressed in percentage terms.
How to Read Stock Numbers Relating to Price
Let’s now explore how to read stock numbers specifically relating to price. From the image above, we can see a variety of numbers relating explicitly to the stock price, including:
- Current stock price (and its dollar change and percentage change)
- Pre-market stock price (and its dollar change and percentage change)
- Previous Close
- Open
- Bid
- Ask
- Day’s Range, and
- 52 Week Range
We’ve already talked about the current stock price and the pre-market stock price, and their associated dollar changes and percentage changes.
Previous Close reflects the price of the stock as of the close of markets in the previous trading day. Remember, markets are closed on weekends and public holidays. Thus, if you look at stock price data on a Tuesday when Monday was a public holiday, then Previous Close would relate to the previous Friday.
Open displays the price of the stock when markets opened on the day.
Bid reflects the maximum price buyers are willing to pay to buy a stock, on average.
Ask displays the minimum price sellers are willing to accept to sell a stock, on average.
Day’s Range reflects the price range of the stock on this specific day. From the image above, we can see that Tesla’s stock price went as low as $595.21 and as high as $678.09 in a single day.
52 Week Range displays the price range of the stock over a 52-week range, starting from today, and going 52 weeks prior to today.
Okay, now that you know how to read stock numbers relating to Price, let’s look at numbers relating to volume.
How to Read Stock Numbers Relating to Volume
There are only 2 stock numbers relating to volume from the image above, including:
- Volume, and
- Avg. Volume
Volume reflects the total number of trades that took place on the day. Contrary to popular belief, volume displays the total number of transactions, not investors.
Avg. Volume or average volume, as the name kinda suggests, displays the average volume over a certain time period. It’s usually the average volume per day, based on say, 30 days of data. But this can vary from one financial data website to another.
It would be helpful if Yahoo! Finance specified the time period for their Avg. Volume, but it’s not uncommon to see financial data websites provide data/information without providing details of how they got to the numbers.
Okay, we’ve now explored how to read stock numbers relating to price and volume. Notice that we’ve essentially covered approximately half of the stock numbers in the image of Tesla’s stock price information above.
We’re now left with:
- Market Cap
- Beta (5Y Monthly)
- PE Ratio (TTM)
- EPS (TTM)
- Earnings date
- Forward Dividend & Yield
- Ex-Dividend Date
- 1y Target Est
Let’s consider these individually now.
How to read and interpret Market Cap
We’ve actually got a whole other article on reading and interpreting the market capitalization so do give that a read if you want to get an in-depth explanation.
In a nutshell, though, contrary to popular belief, the market cap does not reflect the market value of the company.
The market cap reflects the market value of the Equity of the company.
It displays the value of all the outstanding shares of a company. From the image above, we can see that Tesla’s Market Capitalization is $646.538B (that’s $646.538 billion).
That means you would have to pay approximately $646.538 billion to buy all of Tesla’s shares.
What is Beta?
The beta reflects the systematic risk (aka market risk) of the stock. It’s actually an incredibly important metric/measure, so guess what? Yep – we’ve got a whole other article on what the Beta is and how to calculate it. If you want to learn more, check it out.
In a nutshell, the beta reflects the stock’s exposure to the market risk. It’s a proxy for a stock’s exposure to things like:
- recession
- depression
- changes in interest rates
- pandemics
- natural calamities
- other risks we cannot control nor influence individually
What is the PE Ratio?
The PE Ratio, or the Price to Earnings Ratio, is an investor ratio that reflects the amount of money you pay for the share, for every $1 of profit the company earns.
Described as the investor’s darling ratio, the PE ratio is probably the most popular financial ratio of the lot.
We have of course got a whole other article on the PE ratio so do give that a read if you want to learn more.
How to Read Stock Numbers Relating to Earnings and Dividends
Let’s now think about how to read stock numbers relating explicitly to either:
- earnings, or
- dividends
Earnings refer to a company’s profit. In the image below, we can see that Tesla has an EPS of 0.64
EPS refers to Earnings Per Share. From the image above, we can see that Tesla made a profit of $0.64 (sixty-four cents) for every outstanding share.
TTM The “TTM” you see next to “EPS”, and indeed next to the PE Ratio, stands for “Trailing Twelve Months”. TTM just means the data relates to the most recent twelve months, on a rolling/trailing basis.
Earnings date is referring to the date on which the company, in this case, Tesla, will talk about its earnings. It’s the date on which the company will discuss its most recent earnings and performance as part of its Earnings Call.
Earnings Calls are conference calls wherein companies let investors know how much revenue they made in the most recent quarter, what their earnings were, what their costs were, and a whole host of other information. You can actually log in and listen to these calls since they’re typically broadcast online. Alternatively, you can look at transcripts of the calls on websites like SeekingAlpha.
Forward dividend and yield relate to the expected future dividend and expected future dividend yield. At the time of writing, Tesla doesn’t pay dividends, which is why you’re seeing “N/A” in all the stock numbers relating to dividends in the images above. If you take a look at a dividend-paying stock like Apple Inc., that data will be available to view.
Importantly, companies can (and do) change dividend policies! You may well be reading this at a time when Apple Inc. has stopped paying dividends! The key takeaway in this context, however, is that forward dividend and forward dividend yield, relate to future expectations of the dividend and dividend yield.
Wrapping Up
Hopefully, all of this makes sense, and you now know how to read stock numbers.
We appreciate that there’s been quite a lot of information in this particular article. But we do hope you found it insightful and useful.
Importantly, there are of course many more things we could’ve/should’ve said about the various stock numbers. But we’ve tried to keep things as concise as possible, whilst still getting into as much detail as reasonably possible!
If you’d like to learn how to read stocks rigorously and explore how to analyse stocks using data-driven thinking, then definitely check out the course below.
That’s it from us for now though – keep learning and loving Finance!
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