The 10 Factors That Affect and Predict Stock Prices

  The main objective of a company is to make profit.  Therefore, investors and traders always assess a company based on its Earning Per Share (bottom line) and Revenue (top line) and its future earning potential.  In US, companies generally report the earnings results every quarter-yearly.  A company that achieves good earning results (EPS and Revenue) expects a boost in its share price and one that delivers poor earning result shall see a beating in its share price.  Sometimes, besides reporting the EPS and Revenue for the past quarter, a company may also issue guidance (expected value) for the EPS and Revenue in coming quarter or coming years.  This is also closely monitored by investors and is an important factor that will affect the company stock price. ·  Take-over or merger.   In general, a company being taken-over is anticipated to get a stock price boost and the company taking over another company shall experience a drop in its share price.  This is assuming that the company is being taken over at a premium, meaning it is being bought over at a higher price than its last traded stock price.  Depends on the agreed term, a company can be bought over by cash or stock (of the acquirer) or a combination of the two.  In some minority cases, the stock price of the acquirer may get a boost if it is perceived that the acquisition shall contribute to its earning or revenue in the near future. ·  New product introduction to markets or introduction of an existing product to new markets.   The introduction of new product to market is seen as a revenue enhancer for a company.  This also applies to an existing product that breaks into new markets.  Sometimes, the prospect of a new product introduction suffices to improve the stock price of a company, this is often observed in surges in stock prices of pharmaceuticals companies after the announcement of successful clinical trials, or FDA approvals for new drugs.  ·  New major contracts or major Government Orders.

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