Chart Discussion

[347Mike]

Off topic question that I don't think warrants a new thread.

Is there a way you can find big stake holder transactions? I was looking at the after hours market of a stock I am invested in and noticed a transaction for a quarter of a million dollars. I would like to know if it was a buy or sell as I setup a limit sell for tomorrow.

I remember stumbling along something like this in the past but don't remember where I found it or what I was searching for.

Thanks in advance.

[slow99]

Off topic question that I don't think warrants a new thread.

Is there a way you can find big stake holder transactions? I was looking at the after hours market of a stock I am invested in and noticed a transaction for a quarter of a million dollars. I would like to know if it was a buy or sell as I setup a limit sell for tomorrow.

I remember stumbling along something like this in the past but don't remember where I found it or what I was searching for.

Thanks in advance.

investor relations page, sec filings, form 4 (maybe on a form 8 as well).

[347Mike]

investor relations page, sec filings, form 4 (maybe on a form 8 as well).

Thanks for the quick reply.

I am assuming it is to early to tell cause I don't see anything near todays date. I wouldn't think todays after market (tomorrow) would be filed anyways. I guess I will just have to wait and see tomorrow.

I did the math though and it came to $296,000. I noticed a few other trades in the $100,000 range also. I hope they are all buys.

[slow99]

Thanks for the quick reply.

I am assuming it is to early to tell cause I don't see anything near todays date. I wouldn't think todays after market (tomorrow) would be filed anyways. I guess I will just have to wait and see tomorrow.

I did the math though and it came to $296,000. I noticed a few other trades in the $100,000 range also. I hope they are all buys.

$300k and $100k trades are meaningless unless you are referring to a micro-cap or penny stock.

[347Mike]

$300k and $100k trades are meaningless unless you are referring to a micro-cap or penny stock.

$48 a share stock. It just seems high. I have been watching this like a hawk for the past week and a half and those are the highest transactions I have noticed so I figured something was going to change. The stock is right in between the 50MA and 200MA so it is going to break loose eventually, I just hope in the right direction. It has been showing resistance off the 50MA for the past week so it has me nervous. The technicals have a pretty bullish appeal to them so I am hoping it pops up and over the 50MA tomorrow... I am ready to take my gains and move on..

I only wanted to be in this stock for a week, signs looked good so decided to stay for another week (first mistake) and I am even with last week. Meanwhile, the stock I wanted to get in on Monday is up 8 or so % this week.....

...Correction - 16%

[slow99]

$48 a share doesn't tell me anything about its market cap. But, I will assume that it's at least a small-cap stock. Just look at the average daily volumes and see of those trades were significant. Also, how can you tell those were individual traders' trades and not a bundled trade into round lots?

By the way, the reporting requirements for "insider" info means that a person who owns 5% (maybe 10%, can't remember for sure) has to report trades...and they have to be reported same day.

Again, I just find it really hard to believe that trades of this $ amount are meaningful.

[347Mike]

$48 a share doesn't tell me anything about its market cap. But, I will assume that it's at least a small-cap stock. Just look at the average daily volumes and see of those trades were significant. Also, how can you tell those were individual traders' trades and not a bundled trade into round lots?

By the way, the reporting requirements for "insider" info means that a person who owns 5% (maybe 10%, can't remember for sure) has to report trades...and they have to be reported same day.

Again, I just find it really hard to believe that trades of this $ amount are meaningful.

I am still new to a lot of this so the short answer is, I don't know. I am decent at reading charts and starting to really understand where they will drop to and where they will possibly rise to.

As for the comments about knowing if they were multiple buys at that time or not, again, I don't know. But if I found something that said "so and so bought or sold this many shares" it would confirm my suspicion. I know I have seen something, somewhere, where it showed me major buy and sells for a stock and it was accurate down to the day.

Also, in regard to what I mentioned earlier - I am new to a lot of this so my explanation or words I use to describe somethings may be off. My only strength right now is reading charts.

I have been studying charts for a year or two on and off but have really drilled down the past month and really watching the market and trying to get a better understanding ie keeping up with news/looking at all sectors and their reactions.

The stock I am referring to that I am currently invested in is CSC. The one I planned on going to on Monday was FNSR.

I don't think any of this is helping you help me but I appreciate your responses none the less.

[slow99]

I am still new to a lot of this so the short answer is, I don't know. I am decent at reading charts and starting to really understand where they will drop to and where they will possibly rise to.

As for the comments about knowing if they were multiple buys at that time or not, again, I don't know. But if I found something that said "so and so bought or sold this many shares" it would confirm my suspicion.

Also, in regard to what I mentioned earlier - I am new to a lot of this so my explanation or words I use to describe somethings may be off. My only strength right now is reading charts.

I have been studying charts for a year or two on and off but have really drilled down the past month and really watching the market and trying to get a better understanding ie keeping up with news/looking at all sectors and their reactions.

Technical Analysis by definition is the study of prices and volumes. After you get the pricing thing down start figuring out how to read volume. As an example, if this stock has an average daily volume of 1 MM shares (pretty low) , the $296k trade is only .6 of 1 percent of the average daily volume. That's not enough to be meaningful. As an fyi, in 2009 I worked for a hedge fund with a little over $1 billion in AUM. We had a small-cap product, and it was a VERY rare occasion that we would move a market with our trades in a small-cap name. Even then, we'd move it by like 1% or 1.5%.

I've only seen an single investor move a market meaningfully one time in the last 7 months at my current job. That was when the largest institutional owner of a company (a BIG $100 billion + manager) was on the phone with us asking if they should dump a stock or hold it. After we hung up, the bottom fell out of the stock about 15 minutes later, dropped it about 12%. This was the absolute largest institutional holder of the stock dumping it - throwing the baby out with the bath water.

[347Mike]

I posted the symbols so you can see and hopefully it will make more sense.

Here is another question if you don't mind. I don't quite understand P/E ratios and how to incorporate them into being meaningful. For example, I understand what P/E ratio means but how do you compare a P/E ratio to a price of a stock and know it is good or bad? Is there a formula I can use that will tell me if a $50 stock with a 9.0 P/E ratio is good or not?

[slow99]

P/E is a relative value measure. You can compare a stock's P/E to the market P/E, industry P/E, comparable companies' P/E, or its historical P/E (compare it to itself). The P/E in the most basic form is price per share/earnings per share.

The P/E is really a measure of valuation when considering the growth and risk prospects of a company. A company with lower growth, or higher risk, will trade at a lower P/E ceteris paribus.

The composition of the P/E formula makes this clearer. It's price in the numerator and earnings in the denominator. Also, you want to consider forward P/E... trailing P/E really doesn't tell you much. You can also compare trailing P/E to forward P/E and calculate how much growth is "priced in" to a stock over the next year (if you're using a forward 1 year P/E) or 2 years (if you're using a forward 2 year P/E). Ie, if a stock is trading at $10, and it had last year earnings of a $1, it's trading at a 10x TRAILING P/E. If next year's earnings consensus is $1.25 and it's trading at $10, it's trading at an 8x 1 year forward P/E. If earnings 2 years out are forecasted at $1.50, it's trading at a 6.67x 2 year forward P/E.

Taking the trailing P/E of 10x, and the 1 year forward P/E of 8, gives you an implied earnings growth rate of 25% (10/8) without even having to know the earnings numbers. So, if you think the stock will have more than 25% earnings over the next year, this stock is cheap to you. If you think its earnings growth will be less than 25% over the next year, the stock is expensive to you.

Now, the actual decomposition of the P/E formula is:

P = E1/(R-G) E1 = next year's earnings, R = Risk, G = growth.

So, you can see with risk and growth in the denominator, that increasing R (more risk) will lower the P/E ratio, all else equal... stocks with more risk have lower P/E ratios. Stocks with higher growth, decrease the denominator, and produce higher P/E ratios, all else equal.

[347Mike]

P/E is a relative value measure. You can compare a stock's P/E to the market P/E, industry P/E, comparable companies' P/E, or its historical P/E (compare it to itself). The P/E in the most basic form is price per share/earnings per share.

The P/E is really a measure of valuation when considering the growth and risk prospects of a company. A company with lower growth, or higher risk, will trade at a lower P/E ceteris paribus.

The composition of the P/E formula makes this clearer. It's price in the numerator and earnings in the denominator. Also, you want to consider forward P/E... trailing P/E really doesn't tell you much. You can also compare trailing P/E to forward P/E and calculate how much growth is "priced in" to a stock over the next year (if you're using a forward 1 year P/E) or 2 years (if you're using a forward 2 year P/E). Ie, if a stock is trading at $10, and it had last year earnings of a $1, it's trading at a 10x TRAILING P/E. If next year's earnings consensus is $1.25 and it's trading at $10, it's trading at an 8x 1 year forward P/E. If earnings 2 years out are forecasted at $1.50, it's trading at a 6.67x 2 year forward P/E.

Taking the trailing P/E of 10x, and the 1 year forward P/E of 8, gives you an implied earnings growth rate of 25% (10/8) without even having to know the earnings numbers. So, if you think the stock will have more than 25% earnings over the next year, this stock is cheap to you. If you think its earnings growth will be less than 25% over the next year, the stock is expensive to you.

Now, the actual decomposition of the P/E formula is:

P = E1/(R-G) E1 = next year's earnings, R = Risk, G = growth.

So, you can see with risk and growth in the denominator, that increasing R (more risk) will lower the P/E ratio, all else equal... stocks with more risk have lower P/E ratios. Stocks with higher growth, decrease the denominator, and produce higher P/E ratios, all else equal.

While I am understanding what you are saying, I learn through experience so I am going to have to put to use what you just said before it really makes any sense. It sounds like what you are saying though in the example is that to find the relevance of the P/E ratio I should compare it to future P/Es for a forecasted growth?

[slow99]

While I am understanding what you are saying, I learn through experience so I am going to have to put to use what you just said before it really makes any sense. It sounds like what you are saying though in the example is that to find the relevance of the P/E ratio I should compare it to future P/Es for a forecasted growth?

You will see "TTM" P/E or Trailing P/E on most financial sites. You will also see FY P/E or "forward P/E" on most sites. The stock market is forward looking, past numbers don't mean shit. Future expected numbers matter. I don't care if a stock earned 0 last year, if I expect it will earn a shitload in the future. Intrinsic value of an asset is the "net present value of FUTURE cash flow". Also, you are correct in thinking that a P/E by itself really doesn't tell you anything. P/E is a relative valuation metric... you have to compare it to something.

[347Mike]

You will see "TTM" P/E or Trailing P/E on most financial sites. You will also see FY P/E or "forward P/E" on most sites. The stock market is forward looking, past numbers don't mean shit. Future expected numbers matter. I don't care if a stock earned 0 last year, if I expect it will earn a shitload in the future. Intrinsic value of an asset is the "net present value of FUTURE cash flow".

Thanks. I am going to have a lot of studying to do this weekend.... I am bound and determined to understand this crap on my own....

[slow99]

Thanks. I am going to have a lot of studying to do this weekend.... I am bound and determined to understand this crap on my own....

Hell, I thought about it the other day. I have logged about 12,000 hours of "study" time, not including 3 years of doing it for work in the real world. I still have a ton to learn. Don't get discouraged, you're obviously doing it because you enjoy it, so enjoy it! The markets and Finance are just really fascinating to me, so I decided to get a job doing it. It doesn't hurt that it pays the bills.

[347Mike]

Hell, I thought about it the other day. I have logged about 12,000 hours of "study" time, not including 3 years of doing it for work in the real world. I still have a ton to learn. Don't get discouraged, you're obviously doing it because you enjoy it, so enjoy it! The markets and Finance are just really fascinating to me, so I decided to get a job doing it. It doesn't hurt that it pays the bills.

I don't know where my fascination comes from but it is not only stocks. The past few months the idea of investing in anything that could potentionally grow and earn me more money has been on my mind and it has been a snow ball affect from there.

Which is weird, cause those reasons involve risk and anyone who knows me knows I am a cheap ass and avoid risks when it comes to money. I guess the reward is over weighed by risk.