Glossary of ShareAnalysis’s different ways to view the stock market

Get the ABC on how the various ways to view the stock market in ShareAnalysis.

Stock List

Aerial Views

Stock List

Key Info

Stock List Column

Meaning

Useful to find

Name

 The registered name of the company.

A particular company

Code

The company’s stock/ticker code.

A particular company

Market Capitalisation

The current market price multiplied by the number of shares outstanding. The market value of the company.

Large stocks or small stocks, depending on your preference.

Price

The previous day’s closing price.

N/A

Sector

The industry sector in which the company operates.

Companies in specific sectors (and sectors to avoid).

Industry

The group, within the sector, in which the company operates.

Companies operating in particular industries.

Last Full Year Report

Date of the company’s most recent full year financial results.

When the company last reported their full year results. The more recent the date, the more up-to-date the historical financial information.

Forecast metrics

Stock List Column

Meaning

Useful to find

Safety Margin

The difference between ShareAnalysis’s current intrinsic value and the market price.

Value stocks. Look for a positive safety margin.

Forecast P/E

Current market price divided by forecast earnings per share. Represents how much investors are paying for $1 of the company’s earnings.

Value stocks. ShareAnalysis prefers a lower number.

Forecast PEG Ratio

Calculated as Forecast P/E divided by Forecast EPS Growth. High growth companies generally trade on high P/E ratios. The PEG indicates whether a high P/E is justified by the forecast EPS growth.

Value stocks. ShareAnalysis prefers less than one.

Forecast Dividend Yield

Forecast dividends per share as a percentage of the current market price.

Income stocks. ShareAnalysis prefers a higher percentage.

Forecast Return on Equity

Measures the forecast profitability of a company by comparing how many dollars were required to produce the reported profit.

Profitable stocks. ShareAnalysis prefers more than 10%.

Analyst Coverage

Number of analysts contributing forecasts.

Companies with more research available. ShareAnalysis prefers more than one.

Forecast Valuation Age (days)

The number of days since the company’s Earnings Per Share (EPS) forecast was updated.

Stocks with the latest forecast data. ShareAnalysis prefers fewer days.

Forecast metrics – trends

Stock List Column

Meaning

Useful to find

Forecast Change in Value

Per annum increase or decrease in value over the forecast period.

Growth stocks. ShareAnalysis prefers more than 10%.

Forecast EPS Growth (1 year)

Percentage change from the most recent historical EPS to its forecast EPS.

Growth stocks. ShareAnalysis prefers more than 5%.

Historical Metrics

Stock List Column

Meaning

Useful to find

Mainstreet Score

Mainstreet’s A1 – C5 company rating of balance sheet quality and economic performance.

High quality and top performing companies. ShareAnalysis prefers A1, A2, B1, B2.

Historical Change in Value

Per annum increase or decrease in value over the full (up to 10 years) historical period.

Companies that have a demonstrated track record of growth. ShareAnalysis prefers more than 15%.

Return on Equity

Measures the profitability of a company by comparing how many dollars were required to produce the reported profit.

Profitable stocks, historically. ShareAnalysis prefers more than 10%.

Net Debt / Equity

Represents debt (less any cash on a company’s balance sheet) as a percentage of the total equity in the business. It measures the financial leverage of a company.

Companies with little or no debt (aka strong balance sheets). ShareAnalysis prefers less than 40%.

PPE / Total Assets

Measures the company’s Property, Plant and Equipment assets as a percentage of the total assets of the business. PPE / Total Assets is one measure of the capital intensity of a company’s business. Companies with lower relative levels of property, plant and equipment require less cash reinvested to remain competitive.

Stocks that are not capital intensive. ShareAnalysis prefers less than 30%.

Cash Interest Cover

Represents the amount of times a company’s interest bill is covered by its cash flow.

Companies with money for a rainy day. ShareAnalysis prefers more than four.

Cash Flow Ratio (current)

Measures the quality of a company’s earnings by comparing earnings to cash flow, for the recent historical year. Companies with a higher proportion of cash earnings produce a higher Cash Flow Ratio.

Cash cows. The more cash a company produces, the better. ShareAnalysis prefers more than 0.8.

Cash Flow Ratio (total)

Measures the quality of a company’s earnings by comparing earnings to cash flow, over the total historical period. Companies with a higher proportion of cash earnings produce a higher Cash Flow Ratio.

Cash cows. The more cash a company produces, the better. ShareAnalysis prefers more than 0.8.

Funding Surplus (current)

Calculated by subtracting the capital expenditure, investments and dividends paid from the company’s Cash Flow Generated From Operations, for the recent historical year.

Companies that spend less money than they earn. ShareAnalysis prefers companies with a surplus.

Funding Surplus (total)

Calculated by subtracting the capital expenditure, investments and dividends paid from the company’s Cash Flow Generated From Operations, over the total historical period.

Companies that consistently spend less money than they earn. ShareAnalysis prefers companies with a surplus.

P/E

Recent historical EPS as a percentage of the year end market price. Represents how much investors were willing to pay for $1 of the company’s earnings.

Value stocks, historically. ShareAnalysis prefers a lower number.

Dividend Yield

Measures Dividends Per Share as a percentage of the Market Price. Is the current market price divided by recent historical DPS.

Yield stocks. ShareAnalysis prefers a higher percentage.

Sonkin Ratio

An alternative to the P/E ratio and represents the value of the business including both equity and debt interests against the operating earnings before interest but after tax. A lower multiple means an investor will pay less to own the after-tax operating earnings of the business.

Value stocks. ShareAnalysis prefers a lower number.

Graham Nett

Calculated by deducting the company’s total liabilities from a discounted measure of its current assets, compared to its Market Capitalisation. Graham Nett identifies stocks that are trading at a discount to their liquidation value, that is, really cheap.

Value stocks. ShareAnalysis prefers more than one.

Historical metrics – banks

Stock List Column

Meaning

Useful to find

Return On Assets

An efficiency measure for banks. The higher the ratio the more profitable the bank’s assets.

Banks with profitable assets.

Net Interest Margin

The interest income from the bank’s loan book, less interest paid out to depositors. The higher the ratio, the more efficient the bank.

Efficient banks. ShareAnalysis prefers more than 1.8%.

Cost To Income Ratio

An efficiency ratio that compares a bank’s operating expenses to its total income. A low ratio indicates the bank is controlling its costs.

Banks with good cost control. ShareAnalysis prefers less than 50%.

Change in Bad Debts

Measures the change in a bank’s bad debts over the past two years. Low or negative changes indicate higher-quality borrowers, improved lending practices or improving economic conditions.

Banks with high quality earnings. ShareAnalysis prefers less than 0%.

Historical metrics – Insurance

Stock List Column

Meaning

Useful to find

Combined Ratio

A performance measure for insurance companies that compares the sum of claims, commissions and expenses against the premiums written. The lower the Combined Ratio the higher the profit margin of the company’s insurance business.

High profit margin insurance businesses. ShareAnalysis prefers more than 95%.

Aerial Views

Market Capitalisation vs Growth

Market Capitalisation

The current market price multiplied by the number of shares outstanding. The market value of the company.

Growth

The per annum increase or decrease in value over the forecast period. Known in ShareAnalysis as Forecast Change in Value.

Market Capitalisation vs Dividend Yield

Market Capitalisation

The current market price multiplied by the number of shares outstanding. The market value of the company.

Dividend Yield

Forecast dividends per share as a percentage of the current market price. Known in ShareAnalysis as Forecast Dividend Yield.

Quality vs Safety Margin

Quality

Rated A through C, Mainstreet’s Quality Score measures the strength of a company’s balance sheet. The Score examines a company’s earnings and the level of debt to determine the likelihood of the company suffering a major liquidity event, such as bankruptcy.

Safety Margin

Is the difference between the market price and ShareAnalysis’s forecast intrinsic value estimate. Safety margin helps you decide what you’re prepared to pay for a company’s shares.

Glossary of ShareAnalysis’s company evaluation screens

Understand the terms used across ShareAnalysis’s Evaluate screens.

Jump to a specific Evaluate screen for the key terms:

•  Summary

•  Earnings

•  Dividends

•  Capital History

•  Cash Flow

•  Mainstreet Score

•  Value vs Price

•  Forecast Updates

Summary

Summary

Key Info

Sector

The industry sector in which the company operates.

Industry

The group, within the sector, in which the company operates.

Market Price

Represents the last sale price as at the previous day’s market close.

Shares on issue

The total number of shares on issue as at the previous day’s market close.

Market Capitalisation

The current market price multiplied by the number of shares outstanding. The market value of the company.

Last Full Year Report

Date of the company’s most recent full year financial results.

Website

Is a link to the company’s website.

Address

The physical address of the company’s headquarters.

 

Key Business Measures

Mainstreet Score

Mainstreet’s A1 – C5 company rating of balance sheet quality and economic performance.

Cash Flow Ratio

Measures the quality of a company’s earnings by comparing earnings to cash flow. Companies with a higher proportion of cash earnings produce a higher Cash Flow Ratio.

Net Debt / Equity

Represents debt (less any cash on a company’s balance sheet) as a percentage of the total equity in the business. It measures the financial leverage of a company.

Return on Assets

An efficiency measure for banks. The higher the ratio the more profitable the bank’s assets.

Net Interest Margin

The interest income from the bank’s loan book, less interest paid out to depositors. The higher the ratio, the more efficient the bank.

Cost to Income Ratio

An efficiency ratio that compares a bank’s operating expenses to its total income. A low ratio indicates the bank is controlling its costs.

Bad Debts

Measures the change in a bank’s bad debts over the past two years. Low or negative changes indicate higher-quality borrowers, improved lending practices or improving economic conditions.

Combined Ratio

A performance measure for insurance companies that compares the sum of claims, commissions and expenses against the premiums written. The lower the Combined Ratio the higher the profit margin of the company’s insurance business.

 

Market Measures

Return on Equity

Measures the profitability of a company by comparing how many dollars were required to produce the reported profit.

Earnings Per Share

The annual per share earnings, and forecast earnings where available, adjusted for any abnormal or non-recurring items.

P/E Ratio

EPS as a percentage of the year end market price. Represents how much investors were willing to pay for $1 of the company’s earnings.

Dividends Per Share

The annual dividends paid out, or forecast to be paid out, on a per share basis.

Dividend Yield

Dividends per share as a percentage of the market price.

Earnings

Earnings

Earnings Per Share

The annual per share earnings, and forecast earnings where available, adjusted for any abnormal or non-recurring items.

Market Price

The last sale price as at the company’s full year report date.

P/E Ratio

Recent historical EPS as a percentage of the year end market price. Represents how much investors were willing to pay for $1 of the company’s earnings.

Dividends

Dividends

Dividends Per Share

The annual dividends paid out, or forecast to be paid out, on a per share basis.

Franking

Percentage of the dividend on which the company has already paid tax.

Market Price

The last sale price as at the company’s full year report date.

Dividend Yield

Dividends per share as a percentage of the market price.

Capital History

Capital History

Reported Net Profit After Taxes

The profit figure reported in the annual report representing the money left over after paying all expenses associated with running the business, including taxes.

Normalised Profit After Taxes

ShareAnalysis removes abnormal and non-recurring revenues and expenses, such as the sale of an asset, from a company’s reported net profit to produce a more sustainable representation of a company’s profits.

Total Shareholders Equity

Total shareholder’s equity less preference shares.

Return on Equity

Measures the profitability of a company by comparing how many dollars were required to produce the reported profit.

Equity Left In

Represents the profits retained in the business and not paid out to shareholders.

Equity Put In

The total equity contributed by shareholders through company capital raisings.

Shares On Issue

The total number of shares on issue.

Cash & Short Term Investments

Includes cash in the bank, term deposits and any other investments held by the company that will expire within one year.

Total Debt

Total financial borrowings, as at the company’s latest results.

Net Debt / Equity

Represents debt (less any cash on a company’s balance sheet) as a percentage of the total equity in the business. It measures the financial leverage of a company.

Click here for examples of a good, average and bad balance sheet(Capital History Evaluate screen).

Cash Flow

Cash Flow

Cash Flow Ratio

Measures the quality of a company’s earnings by comparing earnings to cash flow. Companies with a higher proportion of cash earnings produce a higher Cash Flow Ratio.

Reported Net Profit After Taxes

The profit figure reported in the annual report representing the money left over after paying all expenses associated with running the business, including taxes.

Cash Flow Generated From Operations

The cash flows from the company’s day-to-day trading activities. Inflows include sales, receipts from debtors and any other cash revenues. Outflows include all payments related to expenses (usually including interest), payments to creditors, prepaid expenses and payments for expenses incurred in previous periods (such as accrued wages).

Cash Flow From Investing Activities

Includes cash flows from the purchase or sale of non-current assets. Non-current assets include a company’s long-term investments that are not easily convertible to cash or not expected to become cash within the next year.

Cash Flow After Investing

Cash Flow Generated From Operations less Cash Flow from Investing Activities.

Cash Dividends Paid

Amount of cash paid to shareholders in the form of dividends.

Other Financing Cash Flows

Represents all other cash flows that impact the capital structure of a business other than normal borrowings or capital raising transactions.

Foreign Exchange Effects

When cash flows are denominated in a foreign currency or cash balances are held in a foreign currency, exchange rate changes can result in differences when they are translated back to the reporting currency.

Funding Surplus / (Gap)

Calculated by subtracting the capital expenditure, investments and dividends paid from the company’s Cash Flow Generated From Operations. Interprets how the cash generated by the business has been utilised and whether or not the company has required external funding to finance its activities. A Funding Gap means the company has not generated enough cash to fund its ongoing operations and may be forced to take on debt or raise capital from shareholders to continue operating. If the company has cash in the bank it may be able to use that cash to continue operating and produce a Funding Surplus in the next financial year.

Equity Capital In / (Out)

Capital In, a positive number, reflects cash equity capital raised from shareholders. A negative number, (Out), reflects the return of capital to shareholders (eg a share buy back).

Cash Movement

Total change in the company’s bank account for the year. Is Bank Account Open less Bank Account Close.

Bank Account Open

Company’s bank account balance at the beginning of the financial period.

Bank Account Close

Company’s bank account balance at the end of the financial period.

Click here to learn how to interpret a company’s Cash Flow chart.

Mainstreet Score

Share Analysis Score

Quality

Rated A through C, Mainstreet’s Quality Score measures the strength of a company’s balance sheet. The Score examines a company’s earnings and the level of debt to determine the likelihood of the company suffering a major liquidity event, such as bankruptcy.

Performance

Rated 1 though 5, Mainstreet’s Performance Score examines year-to-year changes in the underlying economic performance of a business.

Click here for more insights into Mainstreet’s stock rating system.

Value vs Price

Value vs Price

Intrinsic Value

Is the sum total of a business’s worth based on its earnings, dividends, equity and debt. Click here for more information on intrinsic value and how ShareAnalysis calculates valuations.

Forecast Updates

Forecast Updates

Market Price

Represents the last sale price as at the previous day’s market close.

Forecast Year

The forecast year for the valuation.

Analyst count for year

The number of analysts contributing earnings, dividends, profit and equity forecasts to ShareAnalysis for a specific year.