Recs

0

Foolish Fundamentals: Stocks

Through the end of August, go back to school with The Motley Fool. You'll find more educational book reviews, stock analysis, and financial advice here.

In the investing world, there may be no question more basic than this: "What's a stock?" Yet many people don't know the answer.

A share of stock represents actual ownership in a company. Consider this very simplified example: Imagine that Home Surgery Kits, Inc. (Ticker: OUCHH) has 10,000 shares outstanding (in existence). Now suppose that you own 100 shares of OUCHH. Divide 10,000 by 100, and you'll get 100, which means that you own 1/100 of the company, or 1%.

Of course, companies almost always have way more than 10,000 shares outstanding. Last time we checked, Kellogg (NYSE: K  ) had 396.7 million, Wells Fargo (NYSE: WFC  ) had 3.37 billion, Boeing (NYSE: BA  ) had 794.5 million, Apple (Nasdaq: AAPL  ) had 852.9 million, eBay (Nasdaq: EBAY  ) had 1.42 billion, Amazon.com (Nasdaq: AMZN  ) had 418.9 million, and Dell (Nasdaq: DELL  ) had 2.27 billion.

Ownership entitles you to a share in the company's earnings. These are sometimes partially paid out to shareholders in the form of dividends. Instead of dividends, or in addition to them, earnings may also be reinvested into the company, to fuel growth and generate more value.

With most shares of common stock, ownership is accompanied by voting rights. That's right -- when a company you hold shares in has a big decision to make, it will ask you what you think.

Individual investors typically buy "common stock" in a company. Another form of stock is "preferred," which usually carries some extra conditions and often excludes voting rights.

To learn more about investing Foolishly, visit our Fool's School and our Investing Basics area.

Amazon, Dell, and eBay areMotley Fool Stock Advisorrecommendations. Dell is also aMotley Fool Inside Valuerecommendation. Free trials for all our newsletters are yours for the taking.

Shruti Basavaraj, Adrian Rush, and LouAnn DiCosmo updated this article, which was originally written by Selena Maranjian. LouAnn does not own shares of any company mentioned; Adrian owns shares of Amazon.com; Shruti owns shares of eBay.The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 507415, ~/Articles/ArticleHandler.aspx, 4/19/2014 1:16:59 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 2.54 0.14%
NASD 4,095.52 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

4/17/2014 4:00 PM
AAPL $524.94 Up +5.93 +1.14%
Apple CAPS Rating: ****
AMZN $324.91 Up +1.23 +0.38%
Amazon.com CAPS Rating: ***
BA $127.92 Up +1.88 +1.49%
The Boeing Company CAPS Rating: ***
DELL $0.00 Down +0.00 +0.00%
Dell CAPS Rating: *
EBAY $54.97 Up +0.28 +0.51%
eBay CAPS Rating: ****
K $66.34 Up +0.36 +0.55%
Kellogg Company CAPS Rating: ***
WFC $48.93 Down -0.16 -0.33%
Wells Fargo CAPS Rating: ****

Special Offer for Savvy Investors Like You!

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut semper dui vitae molestie venenatis. Suspendisse.

Enter Email Address:



Privacy / Legal Information
Advertisement