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M&A activity has been around since the end of the nineteenth century and empirical evidence shows that most mergers fail to achieve their merger objectives. Mergers and Acquisitions (M&A) activity is defined as the “aspect of corporate strategy, finance and management dealing with the buying, selling and combining of different companies that can aid, finance, or help a growing company in a given industry grow without having to create another business entity”. This definition highlights two factors about M&A activity which are; M&A is a strategic tool used to accelerate growth in market share or product volume. M&A involves the amalgamation of two or more firms to form one entity leading to two previously autonomous firms operating as a single unit. M&A can destroy shareholder value as evidenced by failure of most M&A activity in achieving merger objectives. Sudi Sudarsanam argued that firms “must always consider the alternatives to acquisitions as a mean

Foreign exchange graphs are making a twist. Dealers are no longer relying on fundamental analysis and giving more substance to technical analysis. Foreign exchange charts are the key tool used by dealers to explore current movement of market trends. What is technical analysis, and how does it work? Why is it becoming more and more popular with dealers? Technical analysis is a computer based structure that looks at past and current quotes. This technique mostly searches for facts patterns that can be compiled into graphs and graphs. These are then presented to dealers for analysis. It also looks for matches in patterns to help predict future foreign exchange directions. More and more traders are finding technical analysis more practical than fundamental analysis. If you are a trader, or are considering trading, technical analysis is probably your finest bet. It is much simpler to recognize when dealing with foreign exchange charts. There are so various issues to consider when learnin

In order to determine whether the forex market is favorable for a trade or not, professional forex traders make use of sound and well established techniques. Most of the professional traders depend on analytical techniques to determine the nature of the currency market at the moment, so as to find a situation that is ideal for opening a trade. In order to become a successful forex trader, you need to learn how to assess and analyze the market. Also one must find out what are the various techniques used by professional forex traders to do this kind of an analysis. Forex trading is inherently based on market research and without market research trading in forex is not possible. There are basically tow fundamental ways by which market research can be done. These are Technical Analysis and Fundamental Analysis. Let us discuss each of these techniques and understand how they can be used to don market research. Fundamental Analysis: The first and the foremost technique that can be used to

Overview You’ve analyzed the market to identify its current trend. You’ve generated a watch list using the Market Smith Screener and Reports functions. You’ve analyzed each stock on a fundamental and technical basis to identify the best possible times to buy. Now, we will discuss techniques to manage your portfolio to lock in gains and avoid severe losses. Portfolio Structure It’s important to remember that your objective in the market isn’t just to be right, it’s to make big money when you are. Two portfolio management techniques that may help you achieve that goal are concentrating your purchases and using proper follow-up buys. We discuss these techniques below. Concentrated Portfolios When it comes to the stock market, sometimes it’s better to put your eggs in a few baskets and watch those baskets very closely. If you own too many stocks, you’re unlikely to know any of them very well. As a result, if the market turns, you’ll probably react slowly to the changing condition

Technical analysis and fundamental analysis are the two main schools of thought in the financial markets. As we've mentioned, technical analysis looks at the price movement of a security and uses this data to predict its future price movements. Fundamental analysis, on the other hand, looks at economic factors, known as fundamentals. Let's get into the details of how these two approaches differ, the criticisms against technical analysis and how technical and fundamental analysis can be used together to analyze securities. The Differences Charts vs. Financial Statements At the most basic level, a technical analyst approaches a security from the charts, while a fundamental analyst starts with the financial statements. (For further reading, see Introduction To Fundamental Analysis and Advanced Financial Statement Analysis.) By looking at the balance sheet, cash flow statement and income statement, a fundamental analyst tries to determine a company's value. In financial te

How can knowing the price to sales ratio help investors improve their stock picks? Undervalued stocks may have these key investment ratios. The price to sales ratio is one of the important criteria for selecting value stocks. Famous long term stock investors such as Warren Buffett have the difficult task of trying to place a relative value on a publicly traded company. How can the price to sales ratio help value investors achieve this goal? Price to Sales Ratio is a Revenue Based Valuation Investors use numerous methods to valuate stocks. Some of the more common metrics are earnings based such as the price to earnings ratio, or the PEG ratio which is price to earnings divided by growth. Other valuations are based on free cash flow or the net worth of all assets minus liabilities also called book value. The price to sales ratio is derived this way: all of the shares multiplied by the current market price equal the market capitalization. This number is the total value of all shares.

It is possible to scan for stocks that are undervalued and have strong growth potential? Absolutely! Here is how... Value investors, such as Benjamin Graham and Warren Buffet, have made large profits from buying fundamentally strong stocks that are trading far below their fair value. High growth investors such as William J. O’Neil, author of How to Make Money in Stocks, asserts that stocks with high and increasing growth rates make some of the best stock picks. Can an investor have the best of both worlds? Value Investing Picks One value investing screening tactic is to purchase stocks with consistently high earnings per share. High EPS means that the stock float is not overly diluted with shares. As well, steady earnings make it easier to forecast long term price projections. A second factor for value investors to scan for would be a low price to earnings ratio. If the PE ratio is 10, the price of the stock is 10 times higher than the annual earnings per share. Therefore, a stock

Price to earnings ratios, return on equity, operating margins ... what does it all mean? Getting started with stocks doesn't have to be as complicated as it seems. The era of the Internet was supposed to usher in a new era of information sharing – and it has The problem for new investors is, there’s so much information it can be overwhelming. Rather than be intimidated by the myriad of criteria to consider, a potential stock buyer can easily focus on a few of these important ones. Price-to-Earnings Ratio Also called a ‘P/E ratio’, this tool is perhaps the most common and most useful of all the financial ratios. In short, it compares the per-share price to per-share earnings, or profit. As such, it essentially tells an investor how much he or she is paying relative to their return. Usually, the P/E ratio uses the last 12 months worth of earnings to produce the ‘E’ in the ratio’s equation. The ‘P’, of course, is the current price. A typical P/E ratio will usually fall somewhere

The price to earnings ratio (PE) divided by growth (or PEG ratio) can help pick winning growth and value stocks. How? The PEG ratio can help both value and growth investing fields. Here is a quick explanation why… Value and Growth Investing with PEG Ratios Value investors focus primarily on the intrinsic value of stocks as compared to current trading prices. A stock might have high earnings per share and strong revenue amongst other fundamentals. These quantitative metrics may suggest that the stock is greatly undervalued. However, if ratio analysis only looks to historical figures the investor could be blindsided. What if a company was going bankrupt or lost most of its long term contracts? The short term fundamental figures would not reflect the disastrous change about to ensue. While current financial ratios would remain strong, growth would be exceedingly negative thus eventually decimating share prices. The PEG ratio can prevent such a problem from occurring. Growth investors

A fundamental market analysis can help you find quality stocks Fundamental market analysis includes looking at all the fundamentals of a company Technical analysis software can help make your research much easier and simple 1. Look a the earnings per share during the fundamental market analysis. This factor can help indicate the growth rate and profit ability of a company, which will allow you to predict more accurately the future of the company. The earnings per share is found by using the number of common stock shares that are outstanding and dividing these into the companies profits after taxes. 2. Use technical analysis software to help you do the technical analysis faster and more efficiently. There are a number of software programs available that can help you compare and analyze stocks and the market according to the criteria you set. This method is faster and requires less time, because the software program does a lot of the work for you. 3. Stock chart analys

Two basic historical methods: For many years there were two basic methods that investors and traders used to study and buy or sell stocks. The first method readily available was the “ticker tape”. In the early 1900s, ticker machines could convey the price of the stock as the daily trading proceeded minute-by-minute and second-by-second. This provided trading in almost “real time”. The second method that investors used was, and still is, studying the financial activity of particular companies and industries. This method is commonly known as “fundamental” analysis. As important accounting standards came into play, investors could plot and analyze financial trends in sales, earnings, price-to-earnings ratios, balance sheet activity such as cash in bank, debt and capital activity. The Internet, Stock Charts and “Cooking the Books”: More recently, and now certainly with the advent of the Internet, stock investors and traders are able to capture a visual picture of the price of a sto

Concern that the US Treasury may delay debt payments next week pushed yields on short-term bills to new peaks on Thursday, as traders and investors sold down their holdings ahead of a crucial vote in the House of Representatives. With uncertainty still surrounding the prospects of a congressional agreement to lift America’s borrowing limit by August 2, Wall Street’s leading chief executives wrote to President Barack Obama and lawmakers to warn of the “very grave” consequences of a default and urged the politicians to cut a deal “this week”. The yield on the bill that matures on August 4 , which returned no interest earlier this month, rose to 20 basis points. In a rare “inversion” of the short-term yield curve, it was deemed more risky than the bill maturing in three months’ time, which now yields 7 bps. A bill trader said his desk dumped all of their Treasuries maturing in August because “no one is sure what will happen”. All eyes in Washington were on the outcome of a House v

What Is a Price-to-Earnings Ratio? Price-to-earnings ratio is a common method used to calculate the intrinsic value and growth of a publicly traded company as compared to others in the market. It is often used to base investing decisions on for both institutional investors and private investors. Also known as P/E or multiple, a price-to-earnings ratio is calculated by taking a publicly traded company's market capitalization and dividing it by its total earnings for any current fiscal year. Market capitalization is a number arrived at by taking a company's current share price per share, and multiplying it by the number of shares the company has issued, or that are considered outstanding, meaning held by investors of various types in the firm. The value of a price-to-earnings ratio must take several factors into account when trying to evaluate a company as a worthwhile investment. One of the first important considerations is the actual size of the company's market capitaliz

When using stock market fundamentals, a trader will look at the company behind a stock instead of a price chart. The essence of stock market fundamentals is trying to determine whether a company would be a good buy or whether it is underperforming. Traders who use stock market fundamentals look at the balance sheet and other financial statements of a company before making a trading decision. When trading in the stock market, there are two different methods of analyzing a stock. A trader could use fundamental analysis or technical analysis. Technical analysis is a strategy that utilizes looking at price charts and the price history of a stock. This method tries to identify patterns in the price movements to determine when to get into and out of the market. Fundamental analysis does not use any of these indicators, but instead attempts to identify the true value of a stock by looking at the underlying company. Individuals who use stock market fundamentals will regularly look at finan

New investors enter the stock market with great deal of enthusiasm but they soon realize that money making in stocks is not as rosy and easy. Majority of first time investors either quit investing in stocks or they realize that equity investing through mutual fund route is better. There are few minority investors who realize the golden rule of stock investing which is called ‘stock valuation’. An investor who has learnt the trade of valuing stocks are the winners of stock marke. There are numerous ways of stock valuation tips that investors will find online. But the overwhelming number of tips may confuse the investors. So in this article the team of getmoneyrich will propose some most effective methods of stock valuation. The valuation of stocks can be done by using the method of finding worth of a company per share. This method is used by Warren Buffett and calls it intrinsic value of stocks. This is also called fundamental analysis of stocks which is calculated on basis of dividen

Technical analysts use Stock Market Trading Software to perform technical analysis or charting as it is also commonly called. These charting tools are very helpful in providing information on momentum, direction, historical relevance and other good information that can go into making a trading decision. For the new trader it is important to note what is meant by technical analysis and how it is different from fundamental analysis, which is another commonly used stock analysis method. Fundamental analysis, as the term suggests, relate to the fundamentals of the company in question. It has to do with its revenues, earnings, stock price in relation to its earnings, the company’s financial and management stability, its market capitalization and other such fundamental data that relate to the company and many times also to the industry that the company is in. Based on fundamental analysis, we can determine whether a stock is attractively priced, fairly priced or it is overpriced. And, w

There are several different stock market investment strategies. Which strategy individuals choose is based on how much they have to invest, their tolerance for risk, and how they believe the market behaves. While no single strategy can guarantee success for an investor, it is wise to have one in place before you start buying and selling stocks. The three most basic strategies for investing in the stock market are the buy-and-hold, fundamental analysis, and technical analysis. Investors can use one strategy or combine them. One strategy is known as buy-and-hold or the index method. This technique is for anyone who is looking for long-term growth with little risk. The buy-and-hold follows the theory that, while there will be short-term fluctuations, stock prices will go up in the long-term. In addition to being low risk, this strategy has other benefits. Taxes and trading commissions are reduced for investors who hold onto stocks for a long time instead of sell them. Many investors hav

Fundamental analysis is a method used to determine the value of a stock by analyzing the financial data that is 'fundamental' to the company. That means that fundamental analysis takes into consideration only those variables that are directly related to the company itself, such as its earnings, its dividends, and its sales. Fundamental analysis does not look at the overall state of the market nor does it include behavioral variables in its methodology. It focuses exclusively on the company's business in order to determine whether or not the stock should be bought or sold. Critics of fundamental analysis often charge that the practice is either irrelevant or that it is inherently flawed. The first group, made up largely of proponents of the efficient market hypothesis, say that fundamental analysis is a useless practice since a stock's price will always already take into account the company's financial data . In other words, they argue that it is impossible to lear