100

“Equity Research”
Terminologies

That you must

familiar with...
1. *Alpha*:
A measure of an investment's performance
compared to a benchmark index, indicating the
ability of a portfolio manager to generate excess
returns.

2. *Beta*:
A measure of a stock's volatility in relation to the
overall market.

3. **PE Ratio (Price-to-Earnings)**:

The ratio of a company's stock price to its
earnings per share (EPS), used to assess its
valuation.

4. **EPS (Earnings per Share)**:

The portion of a company's profit allocated to
each outstanding share of common stock.

5. **DCF (Discounted Cash Flow)**:

A valuation method that estimates the present
value of future cash flows to determine the
intrinsic value of an asset.
6. *Dividend Yield*:
The annual dividend income an investor can
expect to receive relative to the stock's current
market price.

7. **ROE (Return on Equity)**:

A measure of a company's profitability by assessing
how efficiently it uses shareholders' equity.

8. **PEG Ratio (Price/Earnings to Growth)**:

The PE ratio divided by the expected earnings
growth rate, used to evaluate a stock's value in
relation to its growth prospects.

9. *Margin of Safety*:
The difference between the intrinsic value of a
stock and its market price, providing a buffer
against potential losses.

10. *Market Capitalization*:

The total value of a company's outstanding shares
of stock, calculated by multiplying the stock's
current market price by its total number of shares.
11. **EBITDA (Earnings Before Interest, Taxes,
Depreciation, and Amortization)**:
A measure of a company's operating performance,
often used for valuation.

12. *Leverage*:
The use of debt to finance investments, which can
amplify returns but also increase risk.

13. *Blue Chip Stocks*:

Shares of well-established, financially stable, and
typically large-cap companies known for their
reliability.

14. **ROA (Return on Assets)**:

A measure of how effectively a company utilizes
its assets to generate profits.

15. *Volatility*:
A statistical measure of the dispersion of returns
for a given security or market index, indicating
risk.
16. **CAGR (Compound Annual Growth Rate)**:
The mean annual growth rate over a specified
time period, useful for assessing investment
returns.

17. **P/B Ratio (Price-to-Book)**:

The ratio of a company's stock price to its book
value per share, used to evaluate its financial
health.

18. *Diversification*:
Spreading investments across various asset classes
to reduce risk.

19. *Sector Rotation*:

A strategy involving shifting investments between
different sectors based on economic conditions
and market trends.

20. *Long Position*:

Owning a security with the expectation that its
price will rise.
21. *Short Position*:
Borrowing and selling a security with the
expectation that its price will fall, to repurchase it
later at a lower price.

22. *Bull Market*:

A market characterized by rising prices and
optimism among investors.

23. *Bear Market*:

A market characterized by falling prices and
pessimism among investors.

24. *Technical Analysis*:

Analyzing past price and volume data to predict
future price movements.

25. *Fundamental Analysis*:

Evaluating a company's financial health,
management, and industry position to determine
its value.

26. **Volatility Index (VIX)**:

A measure of market volatility, often referred to as
the "fear gauge."
27. *Earnings Call*:
A conference call where a company's management
discusses its financial results and outlook with
analysts and investors.

28. *Institutional Investor*:

Large financial organizations, such as mutual funds
and pension funds, that invest in securities on
behalf of their clients.

29. *Market Order*:

An order to buy or sell a security at the current
market price.

30. *Limit Order*:

An order to buy or sell a security at a specific price
or better.

31. *Market Maker*:

A financial institution or individual that provides
liquidity by buying and selling securities.

32. *Proxy Statement*:

A document that provides information about a
company's management and board of directors.
33. *Hedge Fund*:
A pooled investment fund that employs various
strategies to generate returns for its investors.

34. *Cash Flow Statement*:

A financial statement that shows a company's cash
inflows and outflows.

35. *Debt-to-Equity Ratio*:

A measure of a company's financial leverage,
calculated by dividing its total debt by shareholders'
equity.

36. *Market Timing*:

Attempting to predict future market movements to
buy or sell assets at the most opportune times.

37. *Unsystematic Risk*:

Risk specific to a particular company or industry,
not related to overall market conditions.

38. *Systematic Risk*:

Risk associated with the overall market or
economy, also known as market risk.
39. *Relative Strength*:
A technical indicator that compares the
performance of one security to another or to a
market index.

40. *Catalyst*:
An event or factor that can significantly affect a
stock's price or performance.

41. *Liquidity*:
The ease with which an asset can be bought or sold
without causing a significant price change.

42. **ADR (American Depositary Receipt)**:

A security representing shares in a foreign
company, traded on U.S. exchanges.

43. *Market Sentiment*:

The overall attitude or mood of investors towards a
particular market or asset.

44. *Hurdle Rate*:

The minimum required rate of return to justify an
investment.
45. **EBIT (Earnings Before Interest and Taxes)**:
A measure of a company's operating income.

46. *Market Capitalization Weighting*:

A stock index weighting method based on the total
market value of a company's outstanding shares.

47. *Earnings Surprise*:

When a company's reported earnings differ
significantly from analysts' expectations.

48. *Buy-Side Analyst*:

An analyst who works for an institution that buys
and holds securities, such as mutual funds or hedge
funds.

49. *Sell-Side Analyst*:

An analyst who works for a brokerage or financial
institution that sells securities to investors.

50. *Book Value*:

The net asset value of a company, calculated by
subtracting its liabilities from its assets.
51. **SEC (U.S. Securities and Exchange
Commission)**:
The regulatory body overseeing securities markets
in the United States.

52. *Liabilities*:
A company's financial obligations, including debts
and other liabilities.

53. *Equity*:
The ownership interest in a company, represented
by common and preferred stock.

54. *Yield Curve*:

A graph showing the relationship between bond
yields and their maturities, often used to gauge
economic conditions.

55. **CFO (Chief Financial Officer)**:

The senior executive responsible for a company's
financial operations.

56. *EBIT Margin*:

The percentage of revenue that becomes operating
profit (EBIT).
57. **Mergers and Acquisitions (M&A)**:
The process of combining two or more companies
through various financial transactions.

58. *Earnings Estimate*:

An analyst's prediction of a company's future
earnings.

59. *Capital Allocation*:

The process of deciding how to invest a
company's resources to achieve its objectives.

60. *Beta Coefficient*:

A measure of a stock's sensitivity to market
movements.

61. *Liquidity Risk*:

The risk that an asset cannot be sold quickly
without a significant loss in value.

62. *Price Target*:

An analyst's projected future price for a security.
63. *Market Risk Premium*:
The extra return an investor expects for taking on
the risk of investing in equities instead of risk-free
assets.

64. *Cash Flow per Share*:

The amount of cash generated by a company's
operations divided by its number of outstanding
shares.

65. **Return on Capital (ROC)**:

A measure of a company's efficiency in using its
capital to generate returns.

66. **Enterprise Value (EV)**:

The total value of a company, including its equity
and debt, minus its cash and cash equivalents.

67. *Technical Indicator*:

A mathematical calculation applied to stock price
or volume data to predict future trends.

68. *Primary Market*:

The market where new securities are issued and
sold for the first time.
69. *Secondary Market*:
The market where existing securities are bought
and sold among investors.

70. *Intrinsic Value*:

The calculated value of a security based on its
fundamental characteristics.

71. *Alpha Generation*:

The process of achieving excess returns above a
benchmark index.

72. **IPO (Initial Public Offering)**:

The first sale of a company's stock to the public.

73. *Fund Manager*:

An individual responsible for making investment
decisions for a mutual fund or other investment
vehicle.

74. *Voluntary Corporate Action*:

A company-initiated event that affects its
shareholders, such as a stock split or special
dividend.
75. *Market Efficiency*:
The extent to which stock prices reflect all
available information.

76. *R-Squared*:
A statistical measure that represents the proportion
of a security's movements that can be explained by
movements in a benchmark index.

77. *Treasury Stock*:

Shares of a company's own stock that it has
repurchased and holds in its own treasury.

78. *Technical Resistance Level*:

A price level at which a stock's price tends to stop
rising.

79. *Technical Support Level*:

A price level at which a stock's price tends to stop
falling.

80. *P/E-to-Growth Ratio*:

Similar to PEG ratio, this measures a stock's value
relative to its growth rate.
81. *Dark Pools*:
Private electronic trading platforms used by
institutional investors for large trades.

82. **Return on Investment (ROI)**:

A measure of the profitability of an investment,
often expressed as a percentage.

83. *Portfolio Diversification*:

Spreading investments across different assets to
reduce risk.

84. **Yield to Maturity (YTM)**:

The total return anticipated on a bond if held until
it matures.

85. *Value Investing*:

A strategy focused on identifying undervalued
stocks trading below their intrinsic value.

86. *Growth Investing*:

A strategy focused on identifying stocks with
strong growth potential.
87. *PEGY Ratio*:
PEG ratio adjusted for dividends and earnings
growth.

88. *Price Momentum*:

The tendency of a stock's price to continue moving
in its current direction.

89. **Return on Sales (ROS)**:

A profitability ratio that measures a company's net
income as a percentage of its total revenue.

90. *Convertible Bond*:

A bond that can be converted into a specified
number of company shares.

91. *Stochastic Oscillator*:

A technical indicator that compares a stock's
closing price to its price range over a specific
period.

92. *Trading Volume*:

The number of shares or contracts traded in a
security or market during a given period.
93. *Coverage Ratio*:
A financial metric that measures a company's
ability to cover its financial obligations.

94. **Net Asset Value (NAV)**:

The per-share value of a mutual fund or exchange-
traded fund's assets.

95. *Piotroski Score*:

A scoring system that evaluates a company's
financial strength based on nine criteria.

96. *Dividend Payout Ratio*:

The percentage of earnings a company pays as
dividends to its shareholders.

97. **Return on Investment Capital (ROIC)**:

A measure of a company's ability to generate
returns from its invested capital.

98. **Value at Risk (VaR)**: A statistical measure

used to quantify the level of financial risk within a
portfolio.
99. *Income Statement*:
A financial statement that summarizes a company's
revenues, expenses, and profits over a specific
period.

100. *Accrual Accounting*:

A method of accounting that records transactions
when they occur, regardless of when cash is
exchanged.