No Decoder Ring Needed To Understand Stock Quotes

STOCK market quotations may be among the world's best-read pieces of writing. To call these short items found in most daily newspapers "literature" would surely be stretching language. Yet, each market listing is a drama in itself - a coded chronicle of money made or lost, of corporate successes and failures. And market quotations allow investors to make crucial decisions as to whether to buy or sell a stock.

"I like to look at a listing to get a feel for where the company has been the past year," says James Fraser, who heads Fraser Management Associates Inc., a financial consulting and publishing firm in Burlington, Vt. "I like to look at the highest stock price the past year, the lowest price, and what the current [market] price is. I like to see what the volume is, how much interest there is in the company in terms of trading patterns."

Mr. Fraser asks why people are buying the stock, or selling it. "If you've got a technology stock that has gone from $10 a share up to $40 and is now trading at $12 a share, something has happened within that company" to send the stock up and then drive it back down.

Stock market quotations

Just how do you read a stock market report? Easily, from left to right and usually quickly. For example, take the quotation for Seattle-based Boeing Company, chosen randomly from the Wall Street Journal of March 28 (see chart). You'll notice the following categories:

Hi and Lo. These two prices tell the tale of the company, Fraser says. In the case of Boeing, the stock hit $89.125 a share sometime during the past 52 weeks. Its low was $51.625 a share. (Stocks trade in eighths of a dollar.) You'll also note, as you get to the end of the listing, that the current price on March 28 ($88.625) is just slightly below the 52 week high.

If there is a large spread between the high and low, as there is for Boeing, then that suggests some price volatility. Boeing has had its share of challenges the past year, including labor difficulties, competition from Europe's Airbus, and concerns about US trade relations with China, a major commercial-aircraft customer. Sales, however, remain strong.

Stock. This identifies the company, Boeing. Sometimes a letter will appear. A or B represents different classes of stock. Ford Motor Company, for example, has different types of shares. A "pf" refers to preferred stock. A "vj" means the company is in bankruptcy. A "dd" means the company posted a loss during the latest four quarters. An "s" means there was a stock split (such as giving shareholders two shares for every one they now hold) or cash distribution.

Sym. This refers to the "symbol," a distinct designation used by each company for use on the exchange. Boeing's is BA.

Div. This is the annual dividend. If nothing is listed, the firm pays no dividend. Boeing is expected to pay $1.00 a share, or 25 cents quarterly. If there is an "f," the annual rate has been adjusted because of a recent change. (Other newspapers' systems may vary slightly).

Many firms don't pay dividends. Investors are seeking price appreciation rather than steady income.

Yld. This refers to "yield" - that is, the stock's dividend as a percentage of total price. Boeing's yield is 1.1 percent.

P/E. This is the price-earnings ratio of the stock, which is the share price divided by annual earnings. The number shows whether or not the stock is expensive in relation to its earnings. Boeing's ratio is 78, which is considered high, or expensive. That means investors are expecting big progress in earnings.

Vol 100s. Mr. Fraser likes this number because it quickly tells you about trading activity the day before the listing appeared, in this case March 27. Some 1,233,600 shares traded hands through buying and selling (multiply the listed number by 100). If the whole line is underlined, then trading volume was unusually high that day. In this case, Boeing was busy, but not unusually so.

Hi, Low, Close. This is the most important information in the listing. It shows you what happened the prior trading session. Boeing traded at a high of 88-3/4 ($88.75 cents a share.) Its low was 87-3/8, or $87.375 a share, not too far from its high. And it closed the day at $88-5/8 a share in its final trade, or $88.625.

Net Chg. This is the net change. It shows by how much the stock went up or down the prior trading day. Boeing went up 3/4, or 75 cents a share. That's good. Better a stock go up each day than down.

Mutual-fund listings

Listings of mutual funds vary from paper to paper. Some print more information, others less. "If you are saving for retirement or for the long haul, you may not need to follow mutual fund listings daily," says Chip Norton, managing editor of the IBC/Donoghue Bond Fund Report. "If you are playing the market for rallies, or for short-term gains, you will want to check it daily."

As an example, consider a listing for the Pioneer II fund, which also comes from the Wall Street Journal of March 28 (see chart.) It provides basic essentials.

Fund Family/Name. Some fund companies, such as Fidelity, Franklin/Templeton, and Pioneer, have multiple funds. The fund listed here is Pioneer II, an equity fund that invests in both US and overseas companies.

NAV. The net asset value (or NAV) is the value of one share of the fund. The number is found by dividing the assets in the fund by the number of shares outstanding. For Pioneer II, the NAV was $20.41 for March 27. The value of your assets in the fund is equal to the NAV times your number of shares.

Net Chg. This shows the change in the NAV for the prior day, measured in dollars and cents. In the case of Pioneer II, the NAV went up eight cents.

YTD % Ret. "The most important number," Mr. Norton says. This shows how much the fund has gained or lost in percentage terms during the current year, with all dividends reinvested. Pioneer II was up 4.9 percent through March 27.