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Learning to Invest / Terms, Definitions, & Jargon
|Subject: Re: Understandiing Book Value Per Share||Date: 8/3/2011 3:01 AM|
|Author: JaredCarr||Number: 2162 of 2201|
I see now. The shares outstanding that I had originally used was merely a snapshot of the number of shares at the end of the period. The weighted average shares outstanding gives me the average number of shares during the period. I guess I should use the latter to calculate my EPS (good thing too, because the data gives me the weighted average shares for several years conveniently in the same table!)
Anyway, I first heard about Diana Shipping on the Motley Fool. Many of you "fools" think Diana Shipping is a great investment at this point due to the poor shape the shipping industry is in right now, as well as its solid balance sheet and market share, so I decided to take a look.
Looks like Diana Shipping may be a good choice... Looking at the years back, it looks like it has had its ups and downs... and this may be a good time to get in (with a P/E ratio I calculated to be 5.87, which coincides with the fool's 5.9 P/E ratio)
It has had a consistent return on equity of over 10% the past years (some years well over 20%, and one year even went above 100% !).
However, it seems to have been piling on some long term debt (LT debt/equity ratio was 0.372 in 2010 from 0.276 in 2009) and has a negative free cash flow... however, it appears that the company has enough cash to cover this... well, almost... I'm not sure... hmm. Well, it's had debt in the past and been able to pay it off, I guess that's a good indicator of good health! xD
There's something odd with the cash conversion cycle though. The CCC appears to be consistent, but in the range between -0.50 to 0.50. I am not sure what negative values of the CCC means...
As you might probably have guessed, I have just started doing this stuff about 6 weeks ago (I'm currently 19 and at the time I didn't even know what the term "equity" meant!). I'm very excited and eager to get started... it's just I know I should spend more of my time researching what I buy rather than spending my money quickly... but it's hard sometimes... for instance, I'll read one article on the motley fool that says to buy some certain stock, then I go look at the stock, I see an undervalued P/E ratio and I think "Oh man, I gotta have that!" Good thing my broker is taking forever to accept my application, or else I would have bought plenty of stocks without doing my homework! :P
Also, can I ask your opinion on one stock? How do you think the National Bank of Greece (NYSE: NBG) will fair in the coming years? If Greece defaults on its debt, will NBG default as well? I know it has holdings in Turkey (Finansbank) that is doing well, but do you think it will be enough to keep NBG from going under?
I haven't been able to analyze NBG's balance sheet because it has so many whacky terms in its balance sheet and income statement that it throws me off too much... I'm scared to calculate even a quick ratio because I don't really know what's "liquid" and what's not. xD
Also, could you tell me the importance of the cash flow statement? What are some ratios I could calculate on the cash flow statement and what might be signs that a company is doing well or doing poorly... also, how do I check the cash flow statement for potential signs of fraudulent activity going on in the company?
I know this is a lot of questions, and I'm really sorry! I'm a total newbie when it comes to this stuff ! xD
Oh, and can I add you to my contacts or something?
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