UN Blog: What is the difference between value and market analysis in the decision to purchase stock? and Katsucon 2011 - Panty and Stocking - Stocking

Tuesday, August 20, 2013

What is the difference between value and market analysis in the decision to purchase stock? and Katsucon 2011 - Panty and Stocking - Stocking - 001

What is the difference between value and market analysis in the decision to purchase stock?

Would you purchase stock in ARM Holdings? Why?

Stock best answer:

Answer by Mohammad
1. Stock value/valuation:

1.1. Stock valuation is the method of calculating theoretical values of companies and their stocks. The main use of these methods is to predict future market prices, or more generally, potential market prices, and thus to profit from price movement – stocks that are judged undervalued (with respect to their theoretical value) are bought, while stocks that are judged overvalued are sold, in the expectation that undervalued stocks will, on the whole, rise in value, while overvalued stocks will, on the whole, fall.

1.2 For details, please read at:

http://en.wikipedia.org/wiki/Stock_valuation

2. Market analysis:

2.2 Stock market analysis is the analysis of the general stock market, a specific sector or an individual stock. Its purpose is to uncover price discrepancies that exist in the current market. There are two major approaches to analysis. One involves fundamental analysis to uncover stocks whose current price differs from its potential value. The second uses technical analysis to forecast a stock's change in price, based primarily on its price history.

2.3 Read more: What Is Stock Market Analysis? | eHow http://www.ehow.com/about_7400157_stock-market-analysis_.html#ixzz2TTd8wKag

3. Stock valuation is, thus, a part of market analysis.

ARM Holdings

4. A SWOT ANALYSIS at the under noted site shows the following strengths and weaknesses of the company:

Strengths: Strong Operating margin, Research & Development Capabilities

Weaknesses; Dependence on Europe, Low Returns

Opportunities: Demand for Smartphones

Threats: Intense Competition

http://www.docstoc.com/docs/50541378/ARM-Holdings-plc-(ARM)---Financial-and-Strategic-SWOT-Analysis-Review

5. Over the years, the prices of its share are consistently going up.

http://uk.finance.yahoo.com/q/hp?s=ARM.L&a=3&b=17&c=1998&d=4&e=16&f=2013&g=d&z=66&y=0
http://uk.finance.yahoo.com/q/bc?s=ARM.L&t=5y&l=on&z=l&q=l&c=

6. For reasons unknown, the website gives 3-4 years old balance sheet and income statement data.

http://finance.yahoo.com/q/bs?s=ARM.L+Balance+Sheet&annual
http://finance.yahoo.com/q/is?s=ARM.L+Income+Statement&annual
http://finance.yahoo.com/q/is?s=ARM.L

7. However, data is available for the Most Recent Quarter : 31 Mar 2013 , which shows good performance of the company as under:

Profitability
Profit Margin (ttm): 28.50%
Operating Margin (ttm): 37.37%

http://uk.finance.yahoo.com/q/ks?s=ARM.L

8. It will be advisable to read the latest Annual Report and Balance Sheet of the company before taking a view.
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