Lehman Brothers (Lehman), once a respected investment bank caused many investors to lose millions of dollars.
Let us apply the concepts we have discussed over the past few weeks. Table 1 shows the ROE, ROA, PE, NAV and dividend yield of the 3 companies.
Most people will consider the company’s P/E ratio, EPS, ROE, NAV and ROA (we have mentioned these 5 basic tools in issue 333 and 334) first before making any investment.
A warrant is a form of financial derivative that entitles the holder to buy/sell shares of the company that issued it at a specified price.
In the previous issue, Shares Investment (Singapore) has discussed the concepts of Return On Equity and Return On Assets. This issue, we shall introduce another 3 important financial ratios, namely Earnings Per Share (EPS), Net Asset Value (NAV) and Price-To-Earnings (P/E) Ratio.
In this issue’s Shares Investment (Singapore), we want you to stop predicting the directions of the stock market, the economy, interest rates, oil prices and the US elections. Instead, we want you to focus on analyzing the fundamental value of a company.
