Price and valuation of shares

The price of a share, like the price of any product or service, largely depends on the supply and demand for that resource at a given time. The opportunity to buy one or another share depends on the form in which the joint-stock company that issued the shares was established in its organizational and legal form.

If this is a closed joint-stock company, then a strictly defined circle of persons, the founders of the joint -stock company, may become the owner of the share. When creating a company, shares among the founders are distributed at a price not lower than the nominal value specified in the charter and the memorandum of association. To buy shares of a closed joint stock company, not being its shareholder, it is possible only if they are sold by a shareholder, and the remaining participants (in some cases the company itself) refused to purchase them at the price at which they are offered. Own estimation of shares in this case can be made on the basis of data on net assets.

Net assets of the company are the difference between the assets of the company (where the assets include the first and second sections of the balance sheet, with the exception of the cost of buying shares from shareholders, arrears in contributions to the authorized capital and including the amount of deferred tax assets) and liabilities. The liabilities include long-term liabilities of all types, short-term liabilities for loans and other short - term liabilities (indicating the amount of provisions for contingent liabilities), indebtedness to creditors and founders for income payment, reserves for future expenses, including deferred tax liabilities.

The received value of net assets is divided by the number of shares, so it is calculated - how much are the shares. Information on net assets is disclosed in the annual financial statements or can be calculated on the basis of quarterly balance sheets.

Valuation of shares based on net assets is also suitable for shares of open joint-stock companies that are not traded on the stock exchange. It is part of the fundamental analysis, which also includes analysis of the general economic situation, analysis of the state of the industry and the company itself, whose shares are planned to be purchased. In the event that the stock is traded on the exchange, it may have a price both above the value of net assets per share, and below. For example, Gazprom shares as of the spring of 2013 are twice cheaper than their value based on the estimation of net assets. This means that there is no demand for these shares in the market at a higher price.

If the stock's own valuation causes difficulty for the potential owner of the securities (this occupation requires extensive knowledge), then the decision on which stocks to buy can be taken on the basis of analytical materials offered by large investment companies and banks. It is necessary to read several reviews and make a choice, while it is very important not to invest the last money in the stock, as well as all available free cash.

Valuation of shares when deciding on their purchase on the stock exchange should take into account the cost of energy carriers in world markets, because The Russian economy is extremely dependent on this factor. If prices fall significantly, then it's better to wait with a purchase. When buying securities of other extractive enterprises, it is also necessary to take into account the change in the cost of extracted raw materials in the Russian and world markets. Due to the fact that the Russian stock market is heavily dependent on foreign funds, it is necessary to pay attention to the movement of indices on the Tokyo, London, New York and other exchanges. Stock prices sometimes rise on the eve of closing the register if it is expected to pay tangible dividends or if a large buyer interested in an enterprise has appeared on the market.

Operations in the securities market require some educational training, so if there is a desire to receive stable or high incomes in this field, it is necessary to study fundamental and technical analysis, as well as gain some experience.