Is there a direct link between a company profits rising and its stock price rising? If not why does it happen? - do percentages on sharp el531w
Apart from the hope of increasing the dividend or dividends in the future. If this is not always the case, what is the connection? In other words, about what percentage of time that revenues rise sharply, as rising stock price significantly? Is there a pattern like Anouncement sharp rise with the fall of profit taking, then a gradual increase after that? Thank you.
Sunday, February 14, 2010
Do Percentages On Sharp El531w Is There A Direct Link Between A Company Profits Rising And Its Stock Price Rising? If Not Why Does It Happen?
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2 comments:
Overall, yes, if the profits of a company rises in share prices increased.
If you own a stock, you become part of this society, and thus a share of the profits. This is called EPS, or earnings per share known. So, if the company earns more, their share in the profits valuable. Conversely, if a company is not less, then the shares are worth less.
However, the ratio is slightly more complicated in practice. that the market is very frustrating, but at the same time, is that human emotions are involved. They have analysts and predict how the CEO of the company will earn. Often these estimates are exaggerated, and if the company is not good, but not as good as predictions of liberal, if you have a lot of peopleWe respond to new and perhaps the sale of shares, price, and hence. It is often a good time to buy because there are no fundamental problems with society, but it is an artificial crisis in the price. After a few weeks or months, people forget about predictions and see that the company is healthy and going strong, and the price rises again to normal levels.
You also have situations where gains are very high, exceeding expectations, but the company is an adverse opinion on the future issue, the investors get scared and sell when the outcome is for the quarter or year is very important.
In addition, as you said, investors often sell after a long march, taking their profits. This leads to a slight decrease in the proportion Spand little to do with the long-term performance of the company. These irregularities in the price as a buying opportunity, as should be possible if the population feels it has to be undervalued, are considered. These market inefficiencies that enable an investor to get smarter.
The expectations of the stock for the unit, not profit. Often reported profits do not affect all classes of shares if they (in line with expectations, this is not the same as saying "in line with analysts).
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