What You Should Know about Chevron Stock
Finding the right stock to invest in takes patience and an understanding for how a business has performed in the past, in addition to how it may be projected to perform in the future. Evaluating trends and knowing when to buy or sell will allow new investors to build a successful portfolio. Chevron Corporation (NYSE: CVX) is one of the Big Four oil companies on the market and, with such widespread brand recognition, may gain the attention of those looking to purchase stock for the first time. Learning about Chevron stock and educating yourself on the ins and outs of the stock market will help you while you consider whether or not to buy.
The Numbers Game
Chevron has been trading between a high of $135.10, set near the end of July 2014, and a low of $98.88, set at the end of January 2015, over a 52-week period. At the end of February 2015 the stock was hovering around $108.00 with a trailing price-to-earnings (P/E) of 10.71 and a forward P/E projected at 15.94 for the fiscal year ending December 31, 2016. The stock has seen a 52-week change of -6.15%, but also has a 200-day moving average around $115.00.
What Do These Mean?
Sorting through the numbers related to a certain stock gives you insight into how it is currently performing, has performed in the past, and may perform in the future. However, it is important to remember that past performance does not necessarily carry over to the future. Various metrics used by investors, some of which include the following, allow you to evaluate a stock and determine whether it would make a good buy.
- Trailing P/E – This is based on past earnings over the previous 12 months. This ratio is calculated by dividing the current share price by the trailing 12 months’ earnings per share.
- Forward P/E – On the other hand, this ratio is used to forecast earnings for the stock moving forward. It is calculated by dividing the market price per share by the expected earnings per share.
- 52-Week Change – This indicator shows how the stock is currently performing against where it traded a year ago.
- Moving Average – This can be calculated over any time period, usually 50, 100, or 200 days. The moving average adds up all data points for the time frame, and then divides by the number of days being charted.
Buying Chevron Stock
As oil prices continue to fluctuate, so does the price of Chevron stock. This leads Bidness, Etc. to believe1 new investors should avoid the stock, while an analyst at Forbes feels2 that at the right price it is a smart investment. Although it is risky to purchase stock on the decline, doing so can also lead to gains if it recovers.
It is important to come to your own decision about a stock based on the numbers you see and the knowledge you have about what performance metrics mean to the market. Start your education and learn more about investing in your financial future by contacting a representative of DriveWealth Education at 510-772-7444.