6 factors that determine stock prices

As a stock investor, you also need to determine the price of securities. How much is that stock worth, and when to buy and sell is the question that any investor wants to solve correctly.
There are six factors in which you can analyze the value of a stock:

1. Fundamental analysis
What fundamental analysts see as a guide is that a companys real value is closely related to financial features such as: its ability to grow; the risks that the company may face; cash flow ... Any deviation from actual value is an indication that the security is below or in excess of its real value.
A long-term investment strategy is often based on assumptions such as:
The relationship between value and financial factors is measurable.
- This relationship is stable over a long enough period of time.
- Relationship deviations will be readjusted at an appropriate time.
Value is the primary goal in fundamental analysis. Some analysts typically use discounting cash flows to determine the value of a firm, while others use a price to earnings ratio (P / E) or numerical value. ..
When these analysts hold a large number of stocks that are below value in their portfolios, they are hoping that the portfolio will yield a return above the market average. 

2. Buy a franchise
Franchisees often focus on a handful of companies that they know well and will proceed to buy stock when those firms are below real value. Usually, the franchisee has influence on management and can change the companys financial or investment policy.
In terms of long-term investment:
- An investor who understands a company will be in a better position in its valuation.
- It is possible to buy companies that are below real value without bringing their prices closer to their true value.
Value also plays a key role, and franchisees direct their attention to companies they believe are below price. In addition, they are also interested in finding out how much more value they will add to the company if they can restructure the company.

3. Charts (technical analysis)
Technical analysts believe that the part of prices that fluctuate due to investor sentiment is at least the same as that due to financial factors. The available information such as price fluctuation, trading volume, short selling ... will provide indicators about investor sentiment about price fluctuations in the future.
But in general it can be seen that individual investors invest more on sentimentality than on rational analysis.
While value does not play a major role in technical analysis, there are also many avenues for the technical analyst to incorporate into the analysis. Value can be used, for example, to determine support or resistance lines on a price chart.
On a support line chart is usually based on the lower point below which price tends to stop falling, while resistance line is based on the upper point on which the price tends to stop rising. These levels are usually estimated at historical prices, and the amplitude of the value-based price can be used to make this decision. This means that the maximum value will become the resistance level and the minimum value will become the support line.

4. Information
Price up and down depends on information about the company. Traders who rely on trading information (on the advantage of new information or as soon as the news is released in the market), they buy when there is good news and sell when there is bad news. The hypothesis is that traders can predict the information to be released and evaluate the markets reaction better than the average investor.
For the trader who relies on information, the study of the relationship between information and the price change is more important than the study of value. Thus, the trader can buy a company that exceeds its real value based on the belief that the next information is good, exceeding expectations and will drive the price up.
Thus, if there is a relationship in the fact that the company is below price, above price and the mechanism of the stock price responds to information in the market, investors based on information will make decisions. reasonable investment.

5. Timing
The investors of the moment believe that predicting the changes of the whole market is easier than choosing a particular stock and so the prediction is based on observable factors.
While valuing a stock may not use the timing analysts tool, market timing strategies can use value tools in at least two ways:
- The total market itself is priced and compared at the present time.
The value model can be used to calculate the value of all stocks and the results from the cross-checking can be used to decide whether the market is below or above its true value. 

6. Efficient market
Effective marketers believe that the one-time price represents the best prediction of a companys net worth and that any intention to benefit from the market effectively will be more costly than profitable. profits. They believe that the appropriate market information quickly and accurately and borrowers-buy investors will immediately fill in ineffective gaps.
For the efficient market analyst value is a powerful test tool for understanding why a stock is sold at that price. Since the market price hypothesis is the best prediction of a firms net worth, the deciding object of this hypothesis is to analyze the impact of growth and risk in market prices rather than analysis of the impact of growth and risk in market prices. Find companies below or up real value.