Book Value

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Book Value

Book value is an accounting value of a company. It relates to stock price in that it includes tangible assets minus liabilities. It may or may not include intangibles such as good will. What book value does not address is the strength of the company’s product line, the efficiency of it research, development, and ability to bring salable products to market. Book value does not assess the strength of a company’s management or its general promise for the future. Book value may reveal property, cash assets, and other matters not reflected in the current stock price. These items then represent a greater intrinsic stock value than reflected in the stock price and a margin of safety often sought after in long term investing. Knowing book value is essential to fundamental analysis of stocks.

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Book Value

  1. 1. Book Value Bywww.CandlestickForums.com
  2. 2. Book value is an accounting value of a company. www.CandlestickForums.com
  3. 3. It relates to stock price in that it includes tangible assets minus liabilities. www.CandlestickForums.com
  4. 4. It may or may not include intangibles such as good will. www.CandlestickForums.com
  5. 5. What book value does not address is the strength of the company’s product line, the efficiency of it research, development, and ability to bring salable products to market. www.CandlestickForums.com
  6. 6. Book value does not assess the strength of a company’s management or its general promise for the future. www.CandlestickForums.com
  7. 7. Book value may reveal property, cashassets, and other matters not reflected in the current stock price. www.CandlestickForums.com
  8. 8. These items then represent a greaterintrinsic stock value than reflected in the stock price and a margin of safety often sought after in long term investing. www.CandlestickForums.com
  9. 9. Knowing book value is essential to fundamental analysis of stocks. www.CandlestickForums.com
  10. 10. When a large investor recognizes hiddenassets in a company’s balance sheet they may purchase the stock at a substantial discount to forward looking value. www.CandlestickForums.com
  11. 11. When this happens the whole stockmarket wakes up to the opportunity. www.CandlestickForums.com
  12. 12. At that time both fundamental andtechnical analysis are important for traders. www.CandlestickForums.com
  13. 13. Technical analysis, especially, isimportant in order to anticipate the minimarket rally that will center on the stock in question. www.CandlestickForums.com
  14. 14. Here is where technical analysis toolssuch as found in Candlestick analysis come into play. www.CandlestickForums.com
  15. 15. Candlestick patterns are a visualrepresentation of equity price patternsthat repeat themselves over the years. www.CandlestickForums.com
  16. 16. Reading Candlestick pattern formations will let the trader “see the future” in that the first part of the pattern anticipates the second part. www.CandlestickForums.com
  17. 17. Market analysis with Candlestick basics goes back centuries to when Japaneserice traders developed this technique of representing price changes. www.CandlestickForums.com
  18. 18. It is adaptable today to any sort of market trading and is commonly usedfor technical stock analysis, analysis for options trading, and futures trading analysis. www.CandlestickForums.com
  19. 19. Book value to the accountant is the value of an asset as reflected on a balance sheet. www.CandlestickForums.com
  20. 20. It can also be a representation of theinitial payment for an investment and will include all associated costs. www.CandlestickForums.com
  21. 21. Book value should be the total value of corporate assets to be shared byshareholders if the company were to be liquidated. www.CandlestickForums.com
  22. 22. A company with poor sales and little money in the bankcould, theoretically, have substantial property holdings. www.CandlestickForums.com
  23. 23. If traders were pricing the stock based on things like a price to earnings ratio the property holdings would be “invisible.” www.CandlestickForums.com
  24. 24. If someone were to look at why its book value was so high they would realize that its book value exceeded its stock price. www.CandlestickForums.com
  25. 25. This is where buyouts occur.www.CandlestickForums.com
  26. 26. Someone buys the company for itscurrent stock price, sells off the propertyfor a profit, and sells the company again at a price based on its sales. www.CandlestickForums.com
  27. 27. Traders who keep in touch with things like book value will be ready when a takeover attempt starts. www.CandlestickForums.com
  28. 28. Typically such an effort will drive up the price of the stock. www.CandlestickForums.com
  29. 29. A savvy trader could be able to anticipate price changes withCandlestick chart analysis and very likely profit from trading the stock. www.CandlestickForums.com
  30. 30. Online Stock Market Reviews presentedlive via the internet by Stephen Bigalow www.CandlestickForums.com

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