Share

A single share represents partial ownership of a company relative to the total number of shares in existence.

회사에서 주주들이 소유하는 자본금의 비율을 대표하는 가장 작은 구분

Stock

An asset that represents ownership in a company. A claim on part of a corportation's assets and earnings. There are two main types, common and preferred.

한 회사 주주의 주식(share)을 일시불로 모은 것으로 한 주의 주식(share)들을 하나의 펀드로 전환했을 경우 stock

Common Stock 보통주

One main type of stock; entitles the owner to receive dividends and to vote at shareholder meetings.

Preferred Stock 우선주

The other main type of stock; generally does not entail voting rights, but entitles the owner to a higher claim on the assets and earnings of a company.

Dividend 배당:

A partial distribution of a company's profits to shareholders.

배당은 한 회사가 일반적으로 이윤의 일부로서 주주에게 나누어주는 것을 말한다

Capital Gains 자본이득:

Profits that result from the sale of an asset at a price higher than the purchase price.

Security 증권:

가치(돈)를 지닌 모든 지권 혹은 가치를 증명할 수 있는 모든 것

A tradable financial asset.

Debt Security 채무증권:

Money that is owed and must be repaid, like government or corporate bonds, or certificates of deposit. Also called fixed-income securities.

Derivative Security 파생상품:

ex)선물

A financial instrument whereby its value is derived from other assets.

Equity:

The value of an owned asset minus the amount of all debts on that asset.

Equity Security 유가 증권:

돈으로써 가치가 있는 것에 대한 권리를 증명한 문서

화폐증권 자본증권 상품증권 ...

A security that represents fractional ownership in an entity, such as stock.

Option Contract 옵션계약:

A contract which gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or by a specified date

Futures Contract 선물계약:

A contract that obligates the buyer to buy or the seller to sell an asset at a predetermined price at a specified time in the future

선물거래는 기초자산을 미래의 일정 시점에 미리 정한 가격으로 인도/인수할 것을 약속하는 거래이며, '옵션거래'는 미리 정한 가격으로사거나 팔 수 있는 '권리'를 거래

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Fundamental Analysis

Fundamental analysis of a company involves looking at a company’s balance sheet and cash flow statements, which are usually updated every quarter, which is every three months when the company reports earnings. It’s important to keep in mind that looking at a single quarter’s metrics is only a snapshot of the company, and there are several metrics that each try to capture the health of the company, but in slightly different ways.

In a way, analyzing a company’s fundamentals is like going on a safari taking photographs of an antelope. A single still photo from one angle may tell you some things about the antelope, but taking multiple photos from different angles will give you a better view. Also, taking multiple photos over time will give you a sense of where the antelope is going. So before we introduce some commonly used metrics, please keep in mind that to get a better picture of a company that you’re trying to analyze, you’ll want to look at a collection of different measures over time.

Sales Per Share SPS 주당매출액:

매출액/주식수

A company’s revenue is based on its sales over that quarter, so we can think of sales and revenue as referring to the same thing. It’s a quick way to get a sense for how a company is doing, because we don’t have to subtract out cost of sales, which depends a bit on some accounting decisions. For example, if a company sells a million smartphones for a hundred dollars each over the past 3 months, then its revenue is $100 times 1 million, or $100 million. If the company issued ten million shares, then its sales per share is $100 million divided by ten million, or $10 per share.

You may be wondering why we bother dividing sales by the number of shares. This helps shareholders get a sense of how much the sales figures might impact a change in a single share price. You can imagine that if the company only issued 10 shares, a report of higher sales than forecasted would impact each share more than if the company issued ten million shares.

Also, note that sales of $10 per share probably does not mean that the shareholders will get $10 for each share that they own, or that their stock price will increase by $10. It costs money for the company to make each smartphone. Let’s take a look at a metric that accounts for cost of sales next.

Earnings Per Share EPS 주당순이익:

순이익/주식수 - EPS 가 높으면 투자가치 up SPS 보단 EPS

Earning : sales에서 모든 비용 다뺴고 순수익

Earnings is the company’s revenue minus its cost of sales. Cost of sales refers to the cost of manufacturing the phone, employee wages, rent payments for office space, and the cost of equipment, like machines that make the phones. Earnings gives investors a sense of how much the equity of the company has changed over the past 3 months. Recall that stock represents a fractional ownership of a company’s equity.

Continuing with the smartphone company example, let’s say we can estimate the cost of sales per phone to be $80 per phone. If the sales per phone is $100, then the earnings per phone is $100 - $80 equals $20 per phone. With sales of one million phones, earnings would be $20 times one million, or $20 million.

With ten million shares, this is earnings of $20 million divided by ten million shares, which is $2 earnings per share.

Note again, that this $2 per share doesn’t mean that investors automatically receive an additional $2 per share in their pocket. Let’s look at one way that investors do receive some of those earnings by looking at dividends.

Dividends Per Share 주당배당금:

배당금/주식수

배당수익률 - (DPS/주가) * 100

After a company has positive earnings, they may decide to either reinvest the cash in growing the company’s business. A company’s executives are usually expected to make spending decisions based on maximizing shareholder value. Whether this always happens in practice is debatable, but ideally, if the executives decide that re-investing in the business yields lower returns than an investor could gain from investing in a similar business at the same level of risk, they will give some of the earnings to shareholders as cash. This cash is referred to as dividends.

Let’s say, for example, that the smartphone company decides to return $10 million of its earnings to its shareholders. The dividend per share is then $10 million divided by 10 million, or $1 per share.

Price to Earnings Ratio PER 주가 수익비율:

주가/주당순이익(EPS) or 시가총액/당기순이익

PER high -> 거둔 이익에 비해 고평가

PER low -> 기업의 가치가 저평가됨.

A term you’ll see often is price to earnings ratio, or PE ratio for short. This is the stock’s current market price divided by its most recently reported earnings per share (EPS). You can sort of interpret the PE ratio as how much the company is valued compared to how much money it made. It’s important to be careful about how we interpret a high or low PE ratio, because we can’t say whether a PE ratio is good or bad by looking at it in isolation. Let’s first look at where the price comes from. This market price of a share is based on the collective estimates by investors of the company’s current equity plus its future earnings. The future earnings are based on estimates of future cash flow, which are then adjusted to their present-day value, or Present Value (PV). This is getting a bit outside the scope of what you’ll need to know for this course, but the point we want you to remember is that the market price of a stock is based on both its current assets minus liabilities, but also estimates of the company’s future performance.

Now coming back to the PE ratio. What does it mean to have a high PE ratio? A company may have low or negative earnings, but a high stock price. Why do you think that is? You may have heard of certain startups that are valued at billions of dollars, and yet have low earnings. This is because investors expect potential for high earnings growth, based on the trajectory of past earnings growth. This also means that investors are estimating that the high stock price relative to earnings will be justified by high future earnings. On the other hand, it’s also possible that investor optimism towards the company’s future never materializes, in which case the stock may be overpriced.

Note also that a low PE ratio can also be due to different underlying reasons. An example of a company with a low PE ratio may be one that has high and stable earnings, but less expectations for future growth. Since the company may decide that its investors are better off receiving earnings as dividends instead of reinvesting earnings into the business, the earnings will be distributed as cash to shareholders. This also means that the stock price itself represents the value of the company excluding the cash that was already distributed to these shareholders. Again, keep in mind that a low PE ratio can also be a sign of something else. If a company is expected to face pressure from competitors or government regulation that reduce their expectations for future earnings, then investors may pay a lower price for each share, and that could also result in a lower PE ratio.

In practice, you’ll want to see how a company’s PE ratio compares to other similar companies in the same industry and same geographic region.

You’ll see PE ratios again in later lessons, so for now, just remember that it’s one of many ways to take a snapshot of a company’s financial health.