How to read stock quotes in a newspaper?
Tring!!! Tring!!! (My phone rang)
Me: Hi Amit! How’ve you been?
Amit: Hi Surbhi! I’m fine. I called to tell you that I’ve started investing, thanks to your guidance and motivation. He was referring to the discussions I had with my friends to help them understand Demat and Trading accounts.
Me: No thanks between friends dude…..in fact please don’t hesitate to ask me whenever you find yourself pondering over anything related to investing.
Amit: Ya sure… actually, I called to ask you for another such favour. I was going through the newspaper the other day and came across this ‘Stocks’ page. I’ve also created this mock portfolio on the internet, just to get a hang of investing, before I start putting in my own money. Out of curiosity, I thought of checking out the stocks in my mock portfolio. But looking at the huge data I was at a complete loss! I’m sure it must be as simple as abc for you, but you know right, I’ve never been into finance as such…..
Me: Relax Amit! Hey, I was just stepping out to try this new joint, “Snacko”, that’s opened up near my place. Rachita & Prashant are also coming. Why don’t you also come over? I will explain it to there…..and yes…don’t forget to get your newspaper stock page along!
At Snacko, after all of us were comfortably seated………
Amit: Surbhi! Here’s the newspaper, you can start……shoot!
Me: Ok…so where do I start? Firstly, let me congratulate you Amit on creating a mock portfolio. It will give you a hang of how things work in the actual share market too! In fact, Prashant and Rachita, you both too, should create such a portfolio to begin with.
Prashant: Oh, I did not know such a thing was possible. I will sure check it out.
Rachita: Yeah, me too!
Me: Alright! So, moving to Amit’s query… I hope you guys know that stocks are traded every day from Monday to Friday on the stock exchanges from 09:15 – 15:30, and such information is consolidated and made available in the business section of many newspapers, the next day, in an array of columns, which I will now tell you, how to comprehend.
Amit: Go on! I’m all ears……
Me: Firstly, you should know that the terminologies used in the Newspaper are not restricted to the print media only. So wherever, you come across these terms in relation to stock investing, they essentially mean the same thing.
Rachita: Of course! You cannot have two terms to describe the same thing.
Me: Correct! So, as you all can see, there are 3 main columns with precisely 8 data-points to comprehend in this chart. Let me take you through them, one by one.
The first column from the left, states the Company or Company Name for which the pricing and other information points will be provided in the subsequent columns. The company name may be abbreviated in case the name is too long to fit the column width.
Then, we have (Pr.Cl) or Previous Close. This figure appears just after, and adjacent to, the company name, in brackets. This is the previous trading days’ closing price, or the price at which the buying and selling of shares closed at, day before yesterday.
Then comes the Cr.Cl or Current Close. This is the last closing price available for the company, i.e. the price at which trading in the company shares ended yesterday.
Then there is [Vol] or Volume, which shows the total number of shares traded during the previous day or the turnover, of that particular stock. For convenience, and to fit the column width, this figure is represented in K or L format, i.e. a K for every 1000 and an L for every 100,000.
Next column is Grp or Group. This is the group in BSE that the stock belongs to. The Bombay Stock Exchange classifies stocks under six grades — A, B, T, S, TS and Z — that scores stocks on the basis of their size, liquidity and exchange compliance and, in some cases, also the speculative interest in them. Hence, the volume of shares traded is followed by the BSE group that the stock belongs to, group A being the one with highest liquidity.
Next is the PE or Price/Earnings Ratio. This is valuation ratio, which shows how much premium the market is willing to pay for the company. It is arrived at by dividing the day’s closing price of the scrip by its earnings per share (EPS), where EPS is calculated on net profit for trailing 12 months. To many, it serves as a valuation measure, to indicate the performance of the company and market mispricing, if any.
Then we have the 52W HL or 52 Week High & Low Prices. These are the highest and the lowest prices respectively, at which the stock has traded on the exchange in the past 52 weeks (one year). Hence, the 52 Week High, represents the highest price at which the stock traded in the last 1 year, while, the 52 Week Low is the lowest price at which the stock traded over the last 1 year.
Amit: What is the spade like Symbols that this Newspaper has? I haven’t seen it in the other one I was checking in office?
Me: Yes Amit, certain financial news dailies may make the use of symbols (preceding the company name) to communicate the face value of the scrip. For example, in this case, the spade sign means the stock has a face value of INR 1, a star would mean FV of INR 2, no sign means a FV of INR 10, and so on…..
Prashant: Wow! After understanding how to interpret this data, looking for stock information on day-to-day basis feels quite simple.
Amit: Yeah Surbhi, thanks a lot for all the help!
Rachita: Thanks Surbhi, you make investing seem so simple!
Me: Enough with all the thanks everyone! Instead buy me a nice treat here. I am starving!
You can also check out our video on Reading stock prices in the newspaper below.