How To View Your Stocks On Robinhood

Takeaway

Deciding how to invest is a lot like shopping for a automobile, just a lot more consequential. Yous can beginning by agreement your personal needs and style. Then you tin can consider different models, comparison choices based on their price and potential performance. Investment decisions deserve a similar only fifty-fifty more robust analysis. For many, evaluating investments might non feel as natural as shopping on a car lot, particularly if yous’re doing it for the get-go fourth dimension. Simply, by learning the nuts, you can effigy out what to look for, and what to potentially avert.

Whether y’all’re buying a unmarried stock or edifice a diversified portfolio, smart shopping can have an impact on your portfolio’s performance. So how do you tell a reasonable investment from a full lemon? Well, there are no guarantees, but in that location are some means to increase your chances of making an investment that supports your goals. Here are four steps to consider when analyzing a potential stock investment:

ane. Become in with a plan

Just as you lot choose a machine to fit your lifestyle, investments should support your goals. Your plans will inform how long y’all desire to go on an investment, and how much risk you’re willing to take on. Certain investment goals may remove some more volatile investments from your consideration. For instance, if you demand money in the short-term (e.k., to pay off credit cards or pay tuition), investing in volatile assets might put that money at as well much risk for your comfort. Stock prices tin fall quickly, taking your plans for the coin along with them. That said, (while past performance is no guarantee) stocks accept also been ane of the improve opportunities to achieve growth over the long haul. Property stocks for longer periods of time (x-plus years) generally reduces the risk of loss, which tin can brand them helpful to hold to support long-term goals, such as a dwelling house buy, a child’south education, caring for parents, or retirement. For this strategy to work, yous need to be able to ride out market place downturns, which is not always easy.

As you decide how much risk you lot can handle, you lot might consider how your investments are balanced. In other words, what percentage of your portfolio is allocated to each type of investment? All investments take risks, but that risk generally goes up equally the potential for render increases. That’s why some investors make room in their portfolios for a portion of typically lower-return investments, such as bonds, to help balance out higher-risk, potentially higher-return investments like stocks.

2. Know the different makes and models

But like the various vehicles at a dealership, every stock is unlike. They can vary in size, purpose, and of course, price. It’s up to y’all whether you want a soccer mom van or a sports car—or something in between. When you lot look at a stock, you might consider its marketplace cap, the sector it belongs to, and where information technology could fit into your portfolio. You can also consider what makes information technology bonny. Does the visitor pay dividends? Does it look poised to grow?

Here are some cardinal filters that can help you categorize stocks and size upward their potential:

Size

: When you go car shopping, you might recall near whether you want a SUV or a sedan. As well, many investors think most a company’s size. Ane common measure of a company’s size is its market capitalization (aka “
market cap
”). This is the value of the company if you multiply the total number of outstanding shares by the company’s current share toll. For case, if in that location were xxx shares in Eric’due south Electronics and the market price was $4, the company would have a marketplace cap of $120 (30 shares 10 $four per share = $120 market cap).

Small-cap companies are more often than not valued between $250 million and $two billion, and mid-caps are valued betwixt $two billion and $x billion. Large-cap companies are those valued at $x billion or above. Sometimes though, market cap is based more on perception than a company’s fundamentals. That’s because some investors value stocks based on their intrinsic value, while others approach them based on their apparent popularity, or marketplace sentiment. With that in mind, companies frequently share certain similarities at different stages of growth. Small-cap companies are oft unproven – Many show potential or could exist acquisition targets, simply they likewise face up growing pains. For instance, tin they expand across their existing client base? Are they under pressure from incumbents or regulation? Small-scale-cap companies could eventually become mid-cap or big-cap companies, but they could as well fail. It’s also fully possible that a pocket-sized-cap company could remain a small-cap visitor. By contrast, large-cap companies tend to be more stable, with direction experience and cash on hand – Both can help weather the challenges that arise from competitors and sustain performance. Equally a whole, large-cap companies are more likely to pay dividends (more on that below). Yous tin find many big-cap stocks in the

South&P 500 Alphabetize
, a collection of some of the largest publicly-traded companies in the US.

Sector

: If you lot separate all businesses by the type of industry they fall into, yous have sectors. For case, banks are office of the financial sector, internet companies are considered information technology or advice services, drug makers fall nether the healthcare sector, diaper-makers are an example of consumer staples, and so on. There are unlike ways of slicing it, just as a general standard, there are xi sectors in the stock marketplace, as defined by the Global Industry Classification Standard, a common tool used in the financial world. When evaluating a potential stock investment, it often helps to compare information technology to others in the aforementioned sector. Investing in many different sectors tin can aid you diversify your portfolio, lessening the accident of weak performance in one sector with strong performance in another sector.

Mode

: Do you want to buy a hot, new auto? Or are you lot happy to hunt for a ride that’s been overlooked? Style is not as much nearly the company, as information technology is about how an investor categorizes their investment. “Growth investors” might look for companies that are expanding rapidly. Oftentimes, these are companies that receive extensive media coverage and get labeled as disruptors. Meanwhile, “value investors” might expect for companies they consider underpriced. Both investment styles accept their benefits and risks, which is why many investors own a mix of value and growth stocks.

Dividends (or non):


Equally a stockholder, your investment might pay off in two ways—ane) The company’s stock cost, so you can sell an investment for more than you paid, or 2) you collect dividends, a portion of profits which a company might pay to its shareholders. Not all companies pay dividends, but those that practise typically do and so on a periodic ground, oft quarterly (i.eastward., roughly in one case every iii months). While they’re not guaranteed and tin be eliminated or reduced without find, dividends can provide investors with another source of income.

If you’ve always seen the term “dividend yield,” that refers to how much a company paid in dividends during its last fiscal yr, divided past the company’s share price. This metric can help investors understand a company’s phase of growth. Oftentimes, early-stage companies don’t pay dividends to investors at all, preferring to continue building their business and developing new products. Past comparison, more mature companies are more likely to offering investors a college dividend yield. High dividend yields besides tend to be associated with companies that offering staple items or services, such equally consumer packaged appurtenances businesses.

As an investor, you might face up a choice of what to do with dividends you receive. Some investors choose to use their dividends to buy additional stock or fractional shares of that company, which is known as using a

Dividend Reinvestment Programme, or a Baste
. These plans are often offered by brokerage firms, and are sometimes also offered directly by a company to its shareholders.

Individual outcome or fund

: If you lot’re concerned by the pressure of picking a stock, you don’t have to pick just one. If you want, y’all can purchase a collection of stocks through an

substitution traded fund (ETF)

or

mutual fund
. These allow you to own many stocks at once. This can assistance reduce the risk of picking just i stock, providing yous with some

diversification
. With ETFs and mutual funds, you can also find funds focused on specific sectors or take a chance levels.

Whether you’re investing in individual stocks or pre-packaged funds, a tool called a stock screener, can assistance you lot sort through investment choices, according to size, sector, price, and other measures. Alternatively, some investors first by analyzing companies they know well and comparing them to others in their category.

3. Check nether the hood

Buying a stock means becoming a fractional owner in that company. Equally a shopper, you’re generally looking for one that is well-managed and profitable—and you want to pay a reasonable price. To find that data, turn to the company’southward financials. Companies with publicly traded stocks make their financial information bachelor to the Securities and Exchange Commission (SEC) and the public. This information, which you can typically find on the SEC’s EDGAR site or companies’ investor relations pages, includes almanac

10-Grand filings
, quarterly earnings reports, and other statements filed to regulators. You tin usually observe this information on the SEC’s EDGAR site and the company’southward website (typically on an “investor relations” page). It’s also often included in stock profiles on brokerage platforms like Robinhood. Here are a few ways to translate what’due south in them.

Is the visitor growing?




Check its revenue.

Acquirement is the total amount of money a company generates from sales of goods and services. If it increases from one year to the next, that’s generally a sign of growth. An fifty-fifty better sign tin be increasing

cyberspace income
, which is a company’s total income minus its expenses.

How much is the company earning?




Mensurate the earnings per share.

Earnings per share (EPS)

is the company’s earnings divided by the total number of shares information technology has on the market. A high EPS (or an EPS that is trending upwards) tin can be a sign that the stock is healthy and a potential opportunity for investors. Be wary though, EPS tin besides jump for less savory reasons, such as

reverse stock splits
.

Is the stock ‘fairly priced’?




Examine its P/East ratio and the P/S ratio.

If you’re comparing two stocks, the

toll-to-earnings ratio (P/Due east)

tells yous what investors are paying for the stock in relation to a visitor’s earnings. (This metric is ofttimes described as how much you, as an investor in that company, are paying for a dollar of earnings.) Meanwhile the cost-to-sales ratio (P/S) compares a company’s stock price to its revenues, aka, sales.

The P/E ratio is the stock’s current price divided past earnings per share. For example, a P/E ratio of xx to 25 means investors will pay $20 to $25 for every $1 of earnings. A high P/E ratio usually means investors expect higher earnings, but it can also be a sign the stock is overpriced. A depression P/E may indicate that a stock is underpriced lower, or it might be an accurate reflection of a company with limited prospects.

Some investors divide the P/E ratio by a company’south expected growth rate in the coming yr. This provides a price/earnings-to-growth (PEG) ratio, and it tin help you decide if a stock is potentially overpriced or undervalued. A PEG of one is thought to exist off-white value, while a PEG greater than one might first to await expensive, and a PEG less than i could look similar a deal.

Meanwhile, the cost-to-sales (P/Due south) ratio, aka the “sales multiple” or “revenue multiple,” tin can be found past dividing the company’due south market capitalization by its revenue, or total sales, over a specific period, similar a twelvemonth. You can also calculate the P/S ratio by dividing a company’south share price by the company’south sales per share. Comparison P/South ratios for companies in the same industry can help requite y’all a sense of which ones might exist undervalued or overvalued. For example, say yous’re comparing three big tech companies, and the first has a P/Southward ratio of 6 while the others take P/S ratios of 4 and 2. The company with the lowest P/S ratio in this example may be undervalued, equally its sales are high relative to its share price. (Yous may likewise come up across a P/Southward ratio that is based on forecasted sales for the current year, which is known as a “forward ratio.”)

What about red flags?




Scout the debt-to-equity ratio.

Some debt is normal, merely if a visitor is loaded up on debt it may exist a warning sign. The

debt-to-equity (D/E) ratio

can assistance you compare stocks. It’s measured by taking a company’s full liabilities or debt and dividing it past shareholder value. A D/Eastward ratio of one or lower generally suggests that a company can cover debts if it has a bad yr. A high D/Eastward ratio may be a sign the company is in over its caput. All of these ratios and metrics can be useful, just keep in mind that relying on any single metric in isolation tin lead to poor analysis or investment decisions. Also, be wary that companies tin perform well in the short-term according to sure metrics, but don’t ever sustain that performance – Over limited fourth dimension frames, investments can look improve than they really are.

How volatile is the stock?

Earlier picking a stock, it can be helpful to get a sense of how volatile it tends to be, in order to requite yourself a better chance of knowing what you’re signing up for. A metric called beta is a numerical rating of stock’s volatility.

Beta

compares the fluctuations of a stock to the broader moves of the marketplace, indicating how sensitive that stock is to market movement. The more volatile a stock or other traded investment is, the college its beta tends to be – The less volatile, the lower the beta tends to exist. While investments with lower betas are generally considered to be less risky, lower betas can likewise betoken less opportunity for reward.

Is it a adept deal?




Render on Equity tin assistance

Anybody wants to know if they’re snagging a bargain, or getting jipped.

Return on equity (ROE)
, a measure out of how well a company is turning equity into a turn a profit, can assist y’all effigy that out. It’southward sort of similar a way for an investor to measure the blindside they’re getting for their cadet. The return on equity ratio is internet income divided by shareholders’ disinterestedness. It tells y’all how much lesser-line profit a visitor earns per dollar of value that the shareholders have invested in the company. When evaluating a visitor’s ROE, it’s essential to compare it to similar companies, that is, companies in the same manufacture and of comparable size. It can too be useful to compare a company’s nigh recent ROE to its ROE in previous years to meet if profitability is improving or getting worse.

Every bit an instance, let’s say a banking company called Earnest Pig had a return on equity of ten% last year, and was able to generate 10 cents of profit for every dollar of its shareholders’ ownership. To help sympathize if that’south adept or bad, y’all can compare its ROE to other large banks, as well as to Earnest Pig’s ROE in prior years.

How does it compare to the competition?




Explore analyst research.

Analyst reports can assist add quantitative, as well equally qualitative, data to your inquiry, such as assessing a visitor’s competitive strengths and weaknesses, new products, and important consumer trends. Analysts also regularly await at management, including stability, track tape, and the costs of operating the business organization.

If you’re investing in an ETF or mutual fund, you lot may cull to practise some of the same research on the fund’s biggest investments, known equally holdings. You lot tin can also compare the fund to an alphabetize of stocks with similar holdings, known as a benchmark. The Due south&P 500 Index, for example, is a benchmark for large-cap stocks. If you are investing in an actively managed

common fund
, the long-term performance and runway record of the fund manager can help y’all evaluate the fund’due south success over time. You should also pay attention to the fees associated with investing in a fund. An

expense ratio

is one measurement of the costs associated with investing in a fund. These costs include, for case, payments to the fund managing director, transaction fees, taxes, and other administrative costs, and are deducted from your returns in the fund as a percentage of your overall investment.

4. Take a test drive

One great manner to evaluate a stock is to watch and follow it for a period of time before becoming an investor. Data on past performance can help provide some context around the stock’s behavior, only putting yourself in the shareholder’s seat can sometimes give you a better feel for how you lot might handle what could exist a bumpy ride. Even with taking great intendance to incorporate these and other considerations, you may find yourself with investment losses. So, please go along in mind that diversification, asset resource allotment, and inquiry does not prevent you from losing money.