Part 3 of my guide to know about shares is the 52 week high/low indicator. This is always shown in the pricing on the ASX website and is usually an important indicator in many reports.
What Does 52-Week High/Low Mean?
The highest and lowest price at which a stock has traded in the past 12 months, or 52 weeks.
Many investors see the 52-week high or low as an important indicator. For example, a value investor may view a stock trading at a 52-week low as an initial indication of a possible value play (a stock sitting at a price below its intrinsic value).
Many investors see the 52-week high or low as an important indicator. For example, a value investor may view a stock trading at a 52-week low as an initial indication of a possible value play (a stock sitting at a price below its intrinsic value).
An astute value investor will have to conduct a lot more analysis to come to this conclusion, but the fact that the stock is trading at its 52-week low can be a potential starting point.
This indicator gives you a good point to start researching the company and a rough idea of whether the price is close to what it may actually be ‘worth’. But once again, it’s only one part of the research process.
PD
