Pertaining to the Quarterly Statement of a Company Which Is Publicly Traded That Was Jsut Released?
The last line of the statement reads as follows:
NET INCOME (2,295)
NET INCOME APPLICABLE TO COMMON SHARES (2,295)
Q1: This is a negative number correct?
Q2: In today’s economy where it seems so many companies are in the red i’m not sure how I should handle it, should I drop the stock or maybe roll with it on Monday and see what happens?
If it makes a difference it is a commodity…with a long term moving average that has been positive until it took a dive on Friday about 4%.
I am fairly new at trading so I welcome advice from experienced traders!
Tagged with: Economy • Experienced Traders • Moving Average
Filed under: Commodity Trading
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Yes, its a negative number. Thats the current results. You should base your decision on what you think its going to do in the future. If they think they are going to continue losing money then you should probably sell. If they are expected to increase earnings it may be a good idea to keep it.
In more normal times I would think differently, but for the last year or so I just don’t buy stocks that are losing money. Personal choice, but I think it is safer — and there are plenty of stocks making money. I will buy a stock if the loss is the result of a one-time charge off that makes sense to me, like ‘early extinguishment of debt’ for example.
A 4% dip is no big deal; I would not sell for that reason. You should read what you can find on why it dropped, to see if it makes sense to you or not.
Sometimes it is advantageous in a case like this to wait a few days, so long as it doesn’t keep dropping, and then if it still seems kind of ‘stalled out’ then sell it.
You don’t know a stock from a commodity and obviously don’t know what moves stock prices. Yet you gamble your money based on a technical chart pattern with a long term moving average? Ready shoot aim? You need to do a lot more studying before playing with real money. You, my friend are a source of funds for educated experienced investors. I think you are smart enough, but you have done the equivalent of taking off piloting a 747 after 10 minutes of instruction.
1) Yes it is a negative number, and it is not uncommon to have negative net income.
For example, look at Time Warner (TWX) and New Corps (NWSA) 2008 net income. they are negative. do you think they are bad companies?
2) Negative income results due to non-cash amortization, deprecation, impairments and write-offs. These are all non-recurring and one-time items. You should ignore these to find out the true performance. For this reason, companies release Proforma or Non-GAAP income statements, where they will explain why they got negative numbers. Ignore them, and then analyze. For more realistic analysis, use proforma income, revenues, gross profit margin etc.