™ Digital & Electronic Music Organization, Inc.
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 | EPS: Earnings Per Share--The first, and perhaps most important piece of information you want to research. EPS is what's left after all expenses and taxes have been subtracted. |
| P/E Ratio--This ratio shows the relationship between the current price of the stock and its reported annual earnings. Since earnings are what drive the prices of stock and, eventually dividends, the lower the P/E earnings, the more attractive the stock looks. Also, not because a company has shown a profit necessarily means that they will pay a dividend. Ouch! |
| ROE: Return On Equity--This tells the prospective investor exactly what the company has done in the past with the money that investors have invested in it. Depending upon the industry you are researching, the higher the ROE the better. A ROE of 15% or better is considered very well. Basically, the higher the ROE the more attractive the stock becomes. |
| Beta--Beta measures the volatility of the market as a whole. As a rule, a Beta of one means that the stock price moves up and down in concert with the stock market. A Beta of less than one means that the stock's movements are smaller than the market as a whole. A Beta of greater than one means that the stock price movements are faster than the market as a whole. |
| 5 Year Financials--When examining these financials, if the earnings outpace the pace sales this means that the company has shown signs of becoming more efficient at holding its cost down while expanding its market. |
| Industry Strengths--Key questions to ask are: What are their core competencies? What is their market share? What are their weaknesses? How great are their opportunities? What are their threats? What are their opportunities for growth? Is the company a Cash Cow, a Star, or simply a Dog? |
You have been given the basics and a starting point, go from there!
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