Stock Due Diligence: A Beginner’s Checklist

Due diligence before a potential stock investment involves a thorough investigation of several factors impacting its future performance. This article highlights how to conduct due diligence using a checklist to tick off the relevant questions about the fundamental aspects of a company you have picked. When you plan to buy a house, car, or smartphone, …

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Investor Day: A Guide for Retail Investors

An investor day is an important event for investors in publicly listed companies. The management and the investors interact with each other and discuss the company’s future. The primary factor defining the relationship between a public company and its investors is “Trust.” This element of trust keeps the shareholders from pulling out their invested capital …

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Stock Catalyst: Defined & Examples

A stock catalyst is any news or event that leads to an increase or decrease in a stock’s price. Hard catalysts affect the company directly, while soft catalysts affect the company’s industry or global economy. What Is a Stock Catalyst? A stock catalyst is anything that leads to a substantial change, positive or negative, in …

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What Is Open Interest?

Open interest is the number of unsettled outstanding derivative contracts. Each contract must have a buyer and a seller. It is considered open when a buyer or seller initiates a contract, but a counterparty does not close it by taking the other side of the transaction. Since open interest includes the derivative contracts that can …

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What Are Stock Splits?

A stock split is a decision by the company’s board of directors to increase a company’s number of shares, causing a decrease in the stock price and making shares more affordable. A stock split does not change a company’s value or total market capitalization as dilution does not occur. When stock splits occur, especially when …

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What Is Shareholders’ Equity?

Equity, also called shareholders’ equity or stakeholder equity, gives the holder proportional rights to the remaining cash flows after all debts have been paid. The value of equity depends on your perspective and has both a historical value and an implied value. Book Value of Equity The historical, or book value of equity, is the …

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