Stock Research Pro

Insider buying or selling refers to the purchase or sale of company stock by a corporate insider. Numerous studies have shown that when insiders buy and sell shares of their own companies, they typically fare better than most stock market investors. SEC rule dictates the parameters in which insiders may engage in company stock transactions. Insider transaction information is recorded for public record and is available for review in the company’s annual report.
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The Taxable Equivalent Yield is the return that an investor would require on a taxable investment in order to make it equal to the return on a tax-exempt investment. The taxable equivalent yield calculation is commonly applied when evaluating municipal bond investments as the primary appeal of municipal bonds is that the interest income is exempt from regular federal income taxation. Many are exempt from state taxation as well.
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An Over-the-Counter (OTC) stock is a security that is traded in an environment outside of the formal exchanges, such as the NYSE and the AMEX. Unlike the matchmaking service seen in these specialist exchanges, trading in the OTC market is made possible through a network of middlemen who carry securities in inventory facilitate the buy and sell orders of investors.
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The Current Ratio, a test of a company’s financial strength, is primarily used as an indication of a company’s ability to pay off its short-term liabilities with its short-term assets- cash, inventory and receivables. The higher the current ratio, the more able the company is to pay these obligations. Lower values in the current ratio indicate that the company may have problems paying its short-term debts.
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The Return on Assets (ROA) ratio provides an indication of how profitable a company is relative to its total assets. The ROA ratio demonstrates how much income management has been able to produce from a dollar’s worth of company assets. For this reason, investors often use this ratio to evaluate company management.
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The mutual fund expense ratio (or management expense ratio) is a measure of the cost the investment company incurs to operate the fund. It is expressed as an annual percentage of invested assets that the investment company retains to pay for the management and operation of the fund. These operating expenses are deducted from the fund’s assets and decrease the return to the fund’s investors. The expenses are known as the “load” the fund carries.
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For investors, hedging is the practice of purchasing securities in a combination that reduces portfolio risk. Under most hedging strategies, the investor will take two positions with negative correlations. The two most common financial instruments used for hedging are options and futures. While there is no way to completely eliminate market risk, proper execution of hedging strategies can reduce that risk.
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Small-Cap stocks (stocks with small market capitalization) are generally defined as companies with a market capitalization of between $300 million and $2 billion (although the small-cap classification can vary among brokerage houses). While these securities trade with higher risk profiles than larger-caps, they can offer greater upside potential and may be appealing to investors who can tolerate the volatility.
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Investing with a margin of safety is a principle conceived of by Benjamin Graham, who is considered by many to be the “father of value investing“. Under this principle, the investor looks to purchase when the actual or “intrinsic” value of the stock is believed to be significantly above the market price. The difference between the two prices is the margin of safety. The idea is that buying with a wide margin of safety minimizes the downside risk associated with the investment.
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The Bond Equivalent Yield (BEY) is a formula for describing the yield on a bond while taking into consideration multiple factors regarding the interest on the bond. The BEY enables the comparison of fixed-income securities whose payments are not annual against securities with annual yields. The bond equivalent yield is the yield that is quoted in newspapers.
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