IDENTIFYING
SYMBOLS AND
INTERPRETING
STOCK
QUOTES
DIVIDEND
P/E RATIO
SHARE
• Part of a company’s profits (earnings)
paid periodically to stockholders
• Stands for price-to-earnings ratio. The
P/E is the relationship between a
company’s earnings and its share price.
It is calculated by dividing the current
price per share by the earnings per
share.
• A share is a unit of ownership in a
corporation or mutual fund
STOCK
VOLUME
• A type of security that signifies
ownership in a corporation and
represents a claim to a part of the
company’s profits or losses. Companies
usually issue stock to raise money for a
variety of reasons, including expanding
or modernizing their operations.
• The number of shares traded in a
company’s stock. Unusual market
activity, either higher or lower than
average, is typically the result of some
external event.
Would you buy stock in the companies
that make these products? Why? Why
not?
TICKER
SYMBOLS
•
•
•
•
General Electric
General Motors
Dell
General Mills
GE
GM
DELL
???
CAN YOU
IDENTIFY THE
TICKER SYMBOL
FOR THE COCA
COLA COMPANY?
•
•
•
•
•
•
•
•
•
CCLAY
CCLAF
KO
KOF
CCHOF
CCH
CCHBF
COKE
CCE
GO TO HTTP://FINANCE.YAHOO.COM TO
PERFORM A SYMBOL SEARCH FOR COCA COLA
PARENT
COMPANIES
VS.
SUBSIDIARIES
YUM! BRANDS,
INC.
• Google Yum! Brands, Inc.
• Do you recognize some of its
subsidiaries?
ACTIVITY
SHEET 1:
READING A
STOCK
QUOTE
WHAT IS
STOCK?
• What is the best sneaker on the
market? Why?
• How do you know it is the best?
• If it is the best, would you want
to own all or part of that
company?
Why did the founders of
companies like Nike, Apple and
Sony give up a portion of their
ownership to sell shares to the
public?
ACTIVITY
SHEET 1:
WHAT IS A
STOCK?
YOU HAVE 1
TOOL
NEEDED
WHEN
PURCHASING
STOCK:
KNOWLEDGE
OF
PRODUCTS
PEOPLE LIKE
• Select 5 products in
which you are familiar
• Which companies make
the products?
• Which are publicly traded
or privately held?
• What other products do
the companies make?
ACTIVITY SHEET
2: STOCK
MARKET
CALCULATIONS
WHAT IS A
COMPANY?
COMPANY
• A business or association usually formed
to manufacture or supply products or
services for profit
– Can be a partnership, LLP,
corporation or a proprietorship
– All companies are setup in
accordance with government
regulations
PUBLIC
CORPORATION
• A company with publicly traded shares
that anyone can buy in a stock market
– Legally separated from the
stockholders who own it and the
managers who run it
PRIVATE
CORPORATION
• A corporation that doesn’t sell shares to
the public. You cannot buy shares of a
private company in the stock market
WHAT DO
THESE
PEOPLE HAVE
IN COMMON?
THEY ALL
STARTED
THEIR OWN
FAMOUS
COMPANIES!
• Each is a company that makes products
or provides services to customers.
• The Trump organization is owned by
one person but Microsoft and Martha
Stewart Living Omni Media were
founded by one person but became
public corporations.
• Why would a company change its
ownership?
• Why would a private company want
to become a public corporation?
ACTIVITY
SHEET 1:
P&G –
PRODUCTION
& GROWTH
WHAT IS
DIVERSIFICATION?
DIVERSIFICATION
• It’s hard to predict how a company will
perform over time.
• Diversification is a way to protect your
money.
• It’s a successful way to reduce risk.
HOW IS YOUR
LIFE
DIVERSIFIED?
• The clothes your wear?
• The classes you take?
• The food you eat?
• What are the pros and cons of
being diversified in these areas?
HOW
DIVERSIFIED
ARE THESE
PORTFOLIOS?
How many different industries are represented in
each portfolio?
What do you notice about the portfolios? Are any
“heavy” with one particular industry?
Portfolio A=very diversified, contains stocks from a
variety of industries
Portfolio B=not as diversified, several technology
related companies
Portfolio C=not as diversified, several companies that
sell or create personal luxury items
INDUSTRY/SECTOR
RESEARCH
http://www.nasdaq.com/markets/barchart-sectors.aspx
RULES FOR
THE GAME
• Select investments from at least 3
different industries
• Diversify holdings evenly within an
industry (for example: invest in the
stock of high cap company such as
Disney vs. start-up, low cap, animation
company that appears to have potential
for growth)
WHAT
CAUSES
STOCK
PRICES TO
CHANGE?
Stock price = what investors
believe a company is worth
Supply < Demand
$$$$
Supply > Demand
$
GOOD
OR
BAD
• Internal corporate activity
• Industry trends
• National/international events
(political, social, and scientific
news)
Go to an online news website, read through
Economy/Business headlines and answer the following
questions:
1. Do any of the headlines affect the portfolio your team is
managing in The Stock Market Game?
2. Does any of this news make you want to investigate industries
or companies you hadn’t considered investing in before?
DATA
• P/E ratios
• Quarterly earnings results
• Earnings projections
How do you think this situation impacted both
companies and prices of the shares of stock in their
companies?
INFLUENCES
ON THE
MARKET
A. cut into earning, legal fees to cover the
investigation and a lawyer in court
TOYS FOR
EVERYONE
B. could make parents buy from other
companies with a good reputation
C. as sales decrease the price of stock will go
down
D. bad headlines=falling stock price
E. could take awhile to bounce back and
rebuild reputation
F. it will drop but not as much until found
guilty
G. guilty or innocent???
A. Earnings will go down to pay for
further tests and because they can’t
sell it for 10 years
THE GOOD HEALTH
PHARMACEUTICALS
COMPANY
B. Hurt the company short term but if
approved help in the long term
C. Price will drop and stay low until
approved to sell
D. Price will stay low until they can get
another drug approved
E. It will increase as long as it is popular
and doesn’t have bad side effects
F. I would not due to high risk and long
time for approval
a. Price will go up because materials costs
will go up, huge demand and same supply
of materials
THE GOOD
HOUSE
BUILDERS
COMPANY
b. Put pressure on the company to work
quickly, they will need to increase
productivity
c. Huge demand for new homes, they will
have to hire more workers and buy more
equipment
d. They will make a lot more money but also
have greater expenses for supplies
e. They will become bigger and more
profitable
f.
Price of stock will go up as investors see
potential
g. It would have gone up but not as fast
h. Yes, they will be making a lot of money
A. High interest rates will make cars more expensive
to finance, so demand for Ford cars will decrease
B. As sales decrease, so will earnings for the company
FORD MOTOR
COMPANY
C. The company will have to come up with a way to
make it cheaper to buy a car, may have to sell more
cars overseas where costs are lower
D. People will sell their shares if sales decrease, so
stock prices will go down
E. Hurt sales and make it more expensive for the
company to borrow money to finance the
development of new cars or open new showrooms
F. Yes, they need to find a way to decrease expenses
G. Stop production on least profitable models, close
some plants, or provide lower interest loans to
customers
IN YOUR SMG
TEAMS…
• Stocks are easily
influenced by world
events. Select a stock in
your portfolio that is
most likely to be
influenced by the news.
Explain how current
events may increase or
decrease the value of the
stock.
STOCK
PRESENTATION