How to Read the Share Pages

How to Read the Share Pages

CRACKING THE SHARE PAGE CODE

By Ana Forssman, Senior General Manager: Information Products Sales at the JSE

The world of listed companies has its own lingo which can be daunting to outsiders and even those who are otherwise financially savvy. In this article we look at a common but often misunderstood financial data - the share pages that are found in the business section of many national newspapers.

Most newspapers have similar information on the pages, although the level of detail and the amount of space devoted to the share pages will vary. They are called share pages but in fact many other financial instruments are also covered in these pages including Kruger Rands, Exchange Traded Funds, corporate debt, preference shares and other investment products. The pages are split between the performance of stock market indices and the individual performance of the individual stocks and other investments.

The share pages are divided into nine major sectors, all of which have further subheadings. Listed companies are classified into sectors and sub-sectors according to their business activities. This classification of sectors and sub-sectors is determined by FTSE and is a globally accepted system. These sectors and sub-sectors make it fairly straightforward to find any company. For example, you would find company Afrisam listed in the Construction and Building Materials sub sector of the Basic Industries category.

Once you’ve surveyed the general overview of the page, you need to understand the key market data regarding the performance of the various shares or instruments. Look for the block that is named something like “how to read this table” or “share tables guide”. The symbols are standardised and are as follows:

Name simply refers to abbreviated company name of the company or investment product listed on the page. To save space, companies are only allowed seven letters for their name. Along with the abbreviated name, some share pages also include a three letter abbreviation for the company. Regular traders become so accustomed to using these abbreviations that they may refer to these instead of the full name of the company.

Close refers to the official share price at which the share’s last trade of the day took place. Shares are always priced in cents in the share pages.

High refers to the highest price that the stock traded at during the previous day's session.

Low refers to the lowest price that the stock traded at during the previous day's trading session.

12m high This is the highest price that the stock traded at during the past 52 weeks. If you are going to buy a share and it is currently trading near the top of its 52 week range, then you need to be confident of why you think the stock will go up further from here.

12m low This is the lowest price that the stock traded at during the past 52 weeks.

DM stands for Daily Move which represents the difference in the closing price of a stock from one trading day to the next. If the price of the stock increases this will be indicated by a plus sign before the figure and conversely a minus sign signifies a downward movement in price. Some papers include a move in cents or a percentage while others show both.

YM% stands for the last 12 months percentage move, in other words the percentage that the stock has moved up or down in the past year. This column gives investors a general indication of whether the share’s overall trend is up or down.

DY stands for Dividend Yield which is a financial ratio that shows how much a company pays out in dividends each year relative to its share price. Dividends are the portion of profit paid out in cash to shareholders. Without considering any capital gains that you would receive when selling your stock, the dividend yield is the return on investment for a stock. It is calculated by dividing the annual dividends per share by the price per share. Dividend yield is used as a measurement of the cash flow you receive back for each rand invested. Investors depending on a steady stream of income from their investment portfolio would look at this figure in order to select investments that pay high, stable dividends. To better explain the concept, consider this example: If two companies both pay annual dividends of R1 per share, but ABC Company's stock is trading at R20while XYZ Company's stock is trading at R40, then ABC has a dividend yield of 5% while XYZ is only yielding 2.5%. Thus, assuming all other factors are equivalent, an investor looking to supplement his or her income would likely prefer ABC's stock over that of XYZ.

PE stands for the price-to-earnings ratio of a stock. This is a measure of price paid for a share relative to the annual net income of profit earned by the company per share. This ratio is used for valuation purposes: a higher P/E ratio means that investors are paying far more for each unit of net income return, so the stock is more expensive compared to one with a lower PE ratio. These so-called units are actually financial years of the company concerned and can be interpreted as the number of years of earning to pay back the purchase price.The P/E ratio is calculated by dividing the price of the stock by the earnings (on a per share basis).

DV refers to Day’s Volume and this column refers to the number of shares in a company that were traded the previous day. You will see in the paper that under some columns there will be a dash rather than a number – this is because the share did not trade at all on that particular day. Studying daily volume over a period of time will give an investor an idea of the trading activity or liquidity of a share – which is useful to know as liquid shares are easily sold.

S stands for suspended which means that trading on the share or investment product has been suspended. A halt in trading activity for an extended period of time normally occurs when there is a lack of financial information on the share. Once the JSE suspends a share, shares of that company cannot be traded on the market until the suspension is lifted or lapses. The exact amount of time for the suspension is determined on a case-by-case basis.

Finally, let’s look at the stock market indices. To invest on the stock market, one needs to understand how indices work. In an index, companies with common characteristics are grouped together and index can be seen as barometer for that group, whether together overall, they are up or down. For example, if overall all 40 companies in the Top40 Index, have had share price movements up throughout the trading day, the index will show an overall movement of up from the previous day’s index value. At a glance, an index gives investors a good idea of how an industry has performed or for example how the top 40 companies listed on the JSE have performed. In other words, an index could be defined as a figure calculated to measure the state of the stock market based on the performance of a group of stocks that meet certain criterion set by the stock exchange or any other entity that calculates the index.

CRACKING THE SHARE PAGE CODE

By Ana Forssman, Senior General Manager: Information Products Sales at the JSE

The world of listed companies has its own lingo which can be daunting to outsiders and even those who are otherwise financially savvy. In this article we look at a common but often misunderstood financial data - the share pages that are found in the business section of many national newspapers.

Most newspapers have similar information on the pages, although the level of detail and the amount of space devoted to the share pages will vary. They are called share pages but in fact many other financial instruments are also covered in these pages including Kruger Rands, Exchange Traded Funds, corporate debt, preference shares and other investment products. The pages are split between the performance of stock market indices and the individual performance of the individual stocks and other investments.

The share pages are divided into nine major sectors, all of which have further subheadings. Listed companies are classified into sectors and sub-sectors according to their business activities. This classification of sectors and sub-sectors is determined by FTSE and is a globally accepted system. These sectors and sub-sectors make it fairly straightforward to find any company. For example, you would find company Afrisam listed in the Construction and Building Materials sub sector of the Basic Industries category.

Once you’ve surveyed the general overview of the page, you need to understand the key market data regarding the performance of the various shares or instruments. Look for the block that is named something like “how to read this table” or “share tables guide”. The symbols are standardised and are as follows:

Name simply refers to abbreviated company name of the company or investment product listed on the page. To save space, companies are only allowed seven letters for their name. Along with the abbreviated name, some share pages also include a three letter abbreviation for the company. Regular traders become so accustomed to using these abbreviations that they may refer to these instead of the full name of the company.

Close refers to the official share price at which the share’s last trade of the day took place. Shares are always priced in cents in the share pages.

High refers to the highest price that the stock traded at during the previous day's session.

Low refers to the lowest price that the stock traded at during the previous day's trading session.

12m high This is the highest price that the stock traded at during the past 52 weeks. If you are going to buy a share and it is currently trading near the top of its 52 week range, then you need to be confident of why you think the stock will go up further from here.

12m low This is the lowest price that the stock traded at during the past 52 weeks.

DM stands for Daily Move which represents the difference in the closing price of a stock from one trading day to the next. If the price of the stock increases this will be indicated by a plus sign before the figure and conversely a minus sign signifies a downward movement in price. Some papers include a move in cents or a percentage while others show both.

YM% stands for the last 12 months percentage move, in other words the percentage that the stock has moved up or down in the past year. This column gives investors a general indication of whether the share’s overall trend is up or down.

DY stands for Dividend Yield which is a financial ratio that shows how much a company pays out in dividends each year relative to its share price. Dividends are the portion of profit paid out in cash to shareholders. Without considering any capital gains that you would receive when selling your stock, the dividend yield is the return on investment for a stock. It is calculated by dividing the annual dividends per share by the price per share. Dividend yield is used as a measurement of the cash flow you receive back for each rand invested. Investors depending on a steady stream of income from their investment portfolio would look at this figure in order to select investments that pay high, stable dividends. To better explain the concept, consider this example: If two companies both pay annual dividends of R1 per share, but ABC Company's stock is trading at R20while XYZ Company's stock is trading at R40, then ABC has a dividend yield of 5% while XYZ is only yielding 2.5%. Thus, assuming all other factors are equivalent, an investor looking to supplement his or her income would likely prefer ABC's stock over that of XYZ.

PE stands for the price-to-earnings ratio of a stock. This is a measure of price paid for a share relative to the annual net income of profit earned by the company per share. This ratio is used for valuation purposes: a higher P/E ratio means that investors are paying far more for each unit of net income return, so the stock is more expensive compared to one with a lower PE ratio. These so-called units are actually financial years of the company concerned and can be interpreted as the number of years of earning to pay back the purchase price.The P/E ratio is calculated by dividing the price of the stock by the earnings (on a per share basis).

DV refers to Day’s Volume and this column refers to the number of shares in a company that were traded the previous day. You will see in the paper that under some columns there will be a dash rather than a number – this is because the share did not trade at all on that particular day. Studying daily volume over a period of time will give an investor an idea of the trading activity or liquidity of a share – which is useful to know as liquid shares are easily sold.

S stands for suspended which means that trading on the share or investment product has been suspended. A halt in trading activity for an extended period of time normally occurs when there is a lack of financial information on the share. Once the JSE suspends a share, shares of that company cannot be traded on the market until the suspension is lifted or lapses. The exact amount of time for the suspension is determined on a case-by-case basis.

Finally, let’s look at the stock market indices. To invest on the stock market, one needs to understand how indices work. In an index, companies with common characteristics are grouped together and index can be seen as barometer for that group, whether together overall, they are up or down. For example, if overall all 40 companies in the Top40 Index, have had share price movements up throughout the trading day, the index will show an overall movement of up from the previous day’s index value. At a glance, an index gives investors a good idea of how an industry has performed or for example how the top 40 companies listed on the JSE have performed. In other words, an index could be defined as a figure calculated to measure the state of the stock market based on the performance of a group of stocks that meet certain criterion set by the stock exchange or any other entity that calculates the index.