Valuation & Fundamentals
This ratio compares a company’s stock price to its earnings per share.
What is the P/E ratio?
This index tracks 500 large U.S. companies and is often used as a benchmark for performance.
What is the S&P 500?
This institution sets U.S. monetary policy.
What is the Federal Reserve?
When one company buys more than 50% of another company’s shares to gain control, this is called what?
What is an acquisition?
This company is widely considered the leader in AI-focused semiconductor chips.
What is NVIDIA?
If a company has high revenue growth but negative free cash flow, investors are likely to focus on this future metric.
What is profitability or future cash flow generation?
This term describes a stock that tends to move more than the overall market.
What is high beta?
When inflation rises sharply, the Fed typically does this to interest rates.
What is raise them?
When two companies combine to form one new company, this is called what?
What is a merger?
This sector often performs well during periods of high inflation due to commodity exposure.
What is the energy sector?
This measure tells you how efficiently a company generates profit from shareholders’ equity.
What is Return on Equity?
When investors buy stocks because they believe prices will continue rising due to positive sentiment rather than fundamentals, this is often called this type of market behavior.
What is momentum investing?
This economic term describes rising prices combined with slow growth.
What is stagflation?
When a company raises money by selling shares to the public for the first time, this is called what?
What is an Initial Public Offering?
This FAANG company rebranded in 2021 to focus on the metaverse.
What is Meta Platforms?
When a company buys back shares, this financial metric typically increases, all else equal.
What is earnings per share?
When short-term interest rates rise above long-term rates, creating a historically bearish economic signal, this is called what?
What is an inverted yield curve?
This measure of inflation excludes food and energy.
What is Core CPI?
When a company repurchases its own shares from the market, it is engaging in this capital allocation strategy.
What is a stock buyback?
This metric measures how much debt a company uses relative to shareholders’ equity.
What is the debt-to-equity ratio?
In a DCF model, most of a mature company’s valuation usually comes from this component.
What is terminal value?
When a stock is heavily shorted and rapidly rises in price, forcing short sellers to buy shares to cover their positions and pushing the price even higher, this phenomenon is called what?
What is a short squeeze?
This economic indicator measures the total value of goods and services produced in a country.
What is GDP?
When a company separates one of its divisions into an independent publicly traded company, this is called what?
What is a spinoff?
This investing strategy focuses on buying companies trading below their intrinsic value.
What is value investing?