- (0:30) – How To Start Investing Right Now: Basic Stock Terms
- (6:45) – Understanding How To Use Stock Valuation Metrics
- (20:15) – What Exactly Is Arbitrage and How Can You Use It?
- (25:30) – The Federal Reserve: Hawkish vs Dovish
- (33:35) – Episode Roundup: AAPL, MSFT, XOM, TWTR, TSLA, ATVI, FIVN
- [email protected]
Welcome to Episode #325 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is going solo to give some help to beginner investors.
Perhaps, you are new to stock investing and have started listening to this podcast and watching CNBC. But you’re confused by some of the terms that are thrown around.
Tracey wants to give you some help.
Apple is Expensive: Huh?
You might have heard analysts saying Apple (AAPL – Free Report) is “expensive.” Yes, it’s trading over $150 a share, but the price isn’t what the analysts are talking about.
Apple currently trades with a forward P/E of 26. When analysts on television say it is “expensive” they are likely talking about its P/E.
Apple’s earnings are only expected to rise 8% this fiscal year. Yet Apple has one of the highest P/Es among the FANGMAN stocks.
Just know that it’s not about share price when looking at valuation.
ExxonMobil: Forward or Trailing P/E?
Another confusing concept for beginners may be on what type of P/E is being used. YahooFinance has the trailing P/E on its main quote page but Zacks has the forward P/E.
It can be a problem when a company has strong year-over-year earnings growth like ExxonMobil (XOM – Free Report) .
ExxonMobil is expected to grow earnings by 125% in 2022. It’s forward P/E is cheap, at just 7.8x. But ExxonMobil’s trailing P/E is more than double, at 16.1.
That’s a big difference. Be sure you know which type of P/E you are using.
What is Arbitrage? Twitter and Activision Blizzard
Beginning investors might have heard the word “arbitrage” thrown around recently and wondered what it was all about.</…….