Attracted to a stock with a fat dividend yield, but not so sure about the underlying company?
In other words, investors are being pitched shares on the premise that prices will be higher in the future, not the actual fundamentals of the underlying company.
When someone with the stature of Warren Buffett buys a stock, this is a clear signal to the markets that the underlying company is worth a serious look.
On the flip side, growth investors are said to be more interested in the growth potential of a security whose underlying company has above-average sales or profit expansion prospects.
Investors want to minimize volatility and to maximize certainty, and the prices that the market assigns to various securities incorporate the consistency with which the underlying company can be counted on to perform well.
Sun Gro Horticulture Income Fund, whose underlying company harvests peat moss in Canada and sells 80% of it in the U.S., cut its payout by 14% in June after higher energy prices ate into its profits.
The weaker underlying performance sent the company's shares lower on Wednesday, ending down 4.7%.
Besides making it easier to do business, simplicity also changed the underlying relationship between the company and its customers.
The company forecasts underlying ABB revenue growth of 7% to 10% over the next five years, along with vastly improving profit margins.
We have a somewhat different point of view about what the future is there and what the underlying strengths of the company are.
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The company said underlying sales growth for the July to September period came in at 0.6% compared with the same period last year.
The company reported underlying sales growth of 13% in the third quarter, but said increasing bad debts and a currency hit would impact full-year profits by 2.5%.
The formula is a great indicator, but should not be used alone, however, as a low Price to Book can sometimes indicate an underlying problem with the company.
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Next year, the company expects underlying production of oil and gas to grow, but estimate the total number of oil-equivalent barrels produced will drop about 150, 000 per day given asset divestitures.
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Stockholders realizing that they would be wiped out if the companies went into bankruptcy, or got taken over by the government, started panic selling, even when they knew the underlying business of the company was still viable.
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The strong Lumia performance, together with a sustained high demand for Asha smartphones in the emerging markets, helped the company maintain underlying profitability for the full year despite reporting losses in the first half of the year.
This could arguably be described as an oversight by many investors who did not understand the nature of their investment or the fact that they had basically no claim on the underlying assets of the company in which they were investing.
As a result, all too often stocks move for reasons other than the underlying cash flows of the company.
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Anyhow, they are a debt instrument that trades more on the underlying credit risk of the company or the industry than on movements in interest rates.
Investors were nonetheless impressed with the company's underlying growth rate.
The company witnessed an underlying revenue increase of 4%.
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This appears to have been a willful effort on behalf of certain former Autonomy employees to inflate the underlying financial metrics of the company in order to mislead investors and potential buyers.
Be interested in the underlying product or service that the company provides.
Why were financial statements for Alipay still being consolidated by Alibaba Group after August 2010 even though the underlying asset was transferred to another company, and therefore how reliable are its consolidated statements?
However, when a Chinese company acquires a company, it owns the underlying technology and can use it anywhere in the world.
Stripping out the impact of oil price fluctuations and asset sales, underlying earnings grew 2 percent, the company said in a statement.
Sentiment toward new shares in China is driven more by whether the offering is considered "hot, " rather than the company's prospects or underlying economic factors.
"We believe the underlying outlooks for the industry and the company remain substantially more challenging than they were a few years ago, " Swartzberg said in a research note Friday.
You might want to be along for the ride, especially if you believe that the value of EK stock has fallen due to ephemeral matters like ITC-driven headlines more than the underlying realities warrant, and that the company can compete with the likes of Lexmark (NYSE: LXK).
His fortunes, and the underlying value of his Saudi stock exchange listed company Kingdom Holding Co.
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