A bear market is a market trend where prices are falling, the investment community is broadly negative/pessimistic and selling assets at decreased prices is encouraged.
A bull market is a market trend where prices are rising, the investment community is broadly optimistic/euphoric and buying assets at increased prices is encouraged.
The cash weighting reflects the percentage of a funds assets are held as cash, rather than equities, options, fixed income etc.
The dividend yield reflects the annual dividend payments made to shareholders, measured as a percentage of the businesses share price.
A company's NPAT is found in its Profit & Loss Statement and measures the profitability of a business after all expenses and taxes.
A company's EPS measures the earnings of the business on a per share basis.
A company's EBIT Growth measures the growth in its profitability after all expenses but before interest expenses and taxation.
The ownership stakes employees and directors hold in a given business, "aligning" their interests with the wider shareholder base.
A company's EV/EBIT, measures its Enterprise Value (its market capitalisation with an subtracted/added cash/debt amount depending on the balance sheet) divided by its earnings before interest and taxation .
As an example, if a company's market cap is $900 million, with $100 million in debt and $100 million in earnings, its EV/EBIT multiple is 900+100/100 = 10 times.
This is a useful valuation metric for investors as it takes into account the debt used in its operations, the current market price and its profitability (after depreciation and amortization)
A simple P/E ratio will typically not factor in the cash/debt of the business and may use EBITDA, which excludes more items from the earnings calculation.
A company's free cash flow yield is the cash a business generates after its payments to support business operations and asset maintenance.
Free Cash Flow excludes non-cash profit & loss items, but is useful to reflect the cash the business generates and is a measurement prior to dividend payments.
A market index is a basket of equities, organised by their size (market capitalisation), geography, industry or business type (amongst other variations).
Common Australian indexes include the All Ordinaries Index, ASX 20/50/100/200/300, and the ASX Small Ordinaries Index.
An IPO occurs when a company wishes to list its stock for broad ownership on a stock exchange, after which investors can buy/sell shares in the business on an open market.
Common reasons for IPOs include managements who are seeking expansion funds or founders who are wishing to sell a portion of their ownership stake.
Leverage refers to the amount of debt used by the business, which can be found in the liability section of its Balance Sheet.
Liquidity refers to the ease/difficulty investors have in entering/exiting a listed security based on how many shares are traded.
As an example, companies within the ASX 100 will have greater liquidity than small-micro cap securities as their traded volume is far greater.
Market Capitalisation refers to the share price multiplied by the number of outstanding shares.
As an example, if the share price is $10 and there are 10 million shares outstanding, its market capitalisation is $100 million.
A companies net debt refers to its debt profile, after adding back the cash held within the business, calculated by its balance sheet figures.
As an example, a company can have a negative net debt balance if its cash exceed its debt, thus it is in net cash.
A P/E ratio refers to a companies market capitalisation divided by its earnings, reflected as a multiple (eg PE ratio of 10).
When a company's shares trade on an "Ex-dividend" basis, this indicates that the final date for investors to be eligible for its upcoming dividend payment has passed.
Investors who purchase shares prior to the Ex-Dividend date are eligible for the dividend.
A LIC is a company listed on the stock exchange, whose purpose is invest in a broad range of asset classes on behalf of its investor base.
The assets a LIC choses to invest in can vary from equities, real estate, private companies or private equity (amongst other alternatives).
A company's NTA is an important measurement for LICs as it reflects the asset backing of the company, and is often measured on a per share and pre/post tax basis.
For LICs, profit reserves are an important metric as they represent the profits available to be distributed to shareholders as dividends.
A company's ROCE is a measurement that reflects how well a firm is utilising its capital to generate profits.
A company's ROCE is typically measured by taking its earnings (as an example EBIT) and dividing it by its capital employed (Total Assets - Current Liabilities), measured as a percentage.
As an example, a firm that generates a 35% return on its capital employed ($35 of EBIT over $110 in Total Assets and $10 in Current Liabilities), is superior to a business thatis only able to generate a 5% return on its capital employed.
A share purchase plan is a form of capital raising offered to existing shareholders, generally at a discount to its market price at the time and with a dollar allocation limit per investor.
Shares on issue refer to the total amount of outstanding shares a company has issued.
This is an important metric, as the number of shares on issue directly correlates with an individual investors ownership percentage of the earnings power of the business.
As an example, if a company is buying back its shares on issue, a shareholders percentage ownership in its future cash flows increases without that investor needing to layout additional capital/funding. The inverse is true if a given company is rapidly issuing shares.