A value change is a sudden increase or decrease in the market value of a security. It can be caused by a number of factors, including news announcements, earnings reports, or changes in the overall market. A value change can also be caused by a change in the company’s fundamentals, such as its financial health … Read more
A price-weighted index is a stock index in which each component stock is weighted according to its current market price, as opposed to its market capitalization. Price-weighted indexes are also known as dollar-weighted indexes. The most famous price-weighted index is the Dow Jones Industrial Average (DJIA), which has been in existence since 1896. Other price-weighted … Read more
The CANSLIM investing strategy is a stock selection method developed by William J. O’Neil, founder of Investor’s Business Daily. The strategy is based on O’Neil’s study of the biggest stock market winners from 1953 to 1993, which showed that most of them shared certain characteristics. The CANSLIM strategy involves selecting stocks that are: C – … Read more
A constituent is a company or other organization that forms part of a larger body, typically a country or state. In the context of stock markets, a constituent is a company whose shares are included in a major index. For example, the Dow Jones Industrial Average (DJIA) is made up of 30 large, publicly-traded companies … Read more
A tombstone is a public announcement of a securities offering. It is also known as a prospectus or offering circular. The tombstone contains information about the offering, such as the price, the date of the offering, the number of shares being offered, and the lead underwriter. What is the purpose of a securities offering announcement? … Read more
A seasoned issue is a security that has been previously offered to the public by the issuing company. Seasoned issues are generally considered to be less risky than new issues because they have a history of being traded in the secondary market. For this reason, seasoned issues typically have lower interest rates than new issues. … Read more
A floating stock is the number of shares of a particular stock that are available for trading. It is calculated by subtracting the number of restricted shares from the total number of shares outstanding. The floating stock is also sometimes referred to as the “free float.” For example, assume that Company XYZ has 1,000 shares … Read more
A liquidating dividend is a type of dividend paid by a corporation to its shareholders when the corporation liquidates, or dissolves. All of the corporation’s assets are sold, and the proceeds are distributed to shareholders. Liquidating dividends are not taxed as income, but are instead treated as a return of capital. What is the difference … Read more
Dual class stock refers to a stock that has two classes of shares, each with different voting rights. One class of shares may have more voting power than the other, or the shares may have equal voting power but different rights to dividends or other distributions. The term “dual class stock” usually refers to a … Read more
Distressed securities are securities of companies that are in financial distress. They may be in danger of bankruptcy or may already be bankrupt. Distressed securities may be bonds, loans, or equity securities. What is a distressed product? A distressed product is a security or other financial instrument that is in danger of default. Distressed products … Read more
