Value investing is an investment strategy focused on buying stocks trading at a discount relative to their intrinsic or fair value. Academic research shows value investing generates lower risk and higher long-term returns than dividend and growth investing.| Liberated Stock Trader
The Graham Number combines earnings per share (EPS) and book value per share (BVPS) to provide a quick snapshot of a company's valuation. Investors can compare this number to the stock's current price to decide if it's undervalued.| Liberated Stock Trader
We explain the 101 most important stock market terms and decipher financial jargon with simple definitions and practical examples.| Liberated Stock Trader
A stock buyback occurs when a company purchases its own shares on the open market. This process reduces the number of shares available, often boosting the stock's value.| Liberated Stock Trader
Economic value added, or EVA is a sophisticated measure for assessing a company's financial performance and creating shareholder wealth by measuring the residual income after deducting the cost of capital.| Liberated Stock Trader
Investors use the income statement to understand a company's key metrics, revenue, expenses, profit, and operating costs. It is one of the most important documents investors use to understand a company's financial performance.| Liberated Stock Trader
The three main types of financial statements are the balance sheet, income statement, and cash flow statement. Each one provides a different perspective on a company's finances.| Liberated Stock Trader
A balance sheet is a financial statement showing a company's assets, liabilities, and shareholders' equity at a specific time. Assets are anything of value that a company owns, including cash, accounts receivable, inventory, and property. Liabilities are any debts or obligations a company owes, such as accounts payable, loans, and leases.| Liberated Stock Trader
Over-leverage is using excessive debt to finance investments or business operations, leading to excessive risk. Financial risk increases as the level of debt exceeds the ability to generate sufficient returns to cover the interest payments and principal repayment obligations.| Liberated Stock Trader
Financial leverage refers to using borrowed funds to increase the potential return on investment. It magnifies potential gains and losses, vital to a company's capital structure.| Liberated Stock Trader
Our research shows that long-term buy-and-hold investing leads to significant profits. Over the past 30 years, annual stock market returns have averaged 10.7%, bonds and real estate yielded 4.8%, and gold returned 6.8%.| Liberated Stock Trader
Return on Average Equity (ROAE) is a financial performance metric that indicates how effectively a company generates profit relative to its average shareholders' equity.| Liberated Stock Trader
The debt-to-capital ratio measures a company's financial stability and leverage by comparing its total debt to its capital base, including debt and equity. It provides insight into what proportion of a company's operations is financed by debt versus shareholders' equity.| Liberated Stock Trader
