How to Read Stocks and Actually Understand Them

If you’re just starting out learning how the stock market works, reading the stock tables in the paper can be confusing. It’s important to learn how to read stocks, though, and it won’t take a lot of time.

Let’s look closer at the table. You’ll notice that there are twelve columns in the table; each stock has a line of its own. The first two columns (usually labeled something like “52W High” and “52W Low”) are dealing with the stock’s performance over the past year. “52W High” shows the highest point the stock has reached in the past 52 weeks, and “52W Low” shows the lowest.

In the follow column you’ll see the actual name of the stock. This will be followed by another column that shows the stock’s ticker symbol. There’s a unique combination of letters for each stock. You will probably recognize some of these from the tickers that run across the bottom of the screen sometimes on the cable news networks.

Speaking of which, watching the financial shows on these networks will give you further help on how to read stocks and other aspects of the stock market.

Next to the ticker column is a column labeled “Div.” This column shows you the annual dividend the stock pays out for each share. Many rows will have this column blank, which means they don’t currently pay out dividends. The same rule also applies to the very next column, “Yield %”, the percentage return on the dividend.

P/E is the price to earnings ratio. Dividing the current stock price by earnings per share for the last four quarters gives you this number.

The next two columns are “High” and “Low.” In the day’s trading, you’ll be able to see the highest and lowest points that the stock has reached. “Net Change” shows the change from the day before; “Close” tells you the point when the stock closed for the day.

Once you’re armed with a good working knowledge of how to read stocks, you can begin to delve into other aspects of the market.

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- Carlie Evie