ANTH 2120 Lecture Notes - Value Investing, Retained Earnings
Document Summary
Bargain price (stock price is below intrinsic value of company) Long-term strategy (looking for stable and dividend payments, buy and hold) Smaller, newer companies with lots of growth potential (key emerging industries such as tech) Retained earnings should be used to grow the company s business. Long term or medium term strategy (if no success they end up selling) Very risky as most start ups do not become famous companies. Earning per share (eps) = net income / # of shares outstanding. Price/earnings ratio (p/e) = current stock price / eps.
