Reading more, beyond the bottom line... You need to understand the number of shares outstanding in a company, and later, who holds most of those shares (i.e., Major Holders), and what the likelihood is that the company will issue more through Secondary Offerings.
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It's basic arithmetic, right?... Knowing the number of shares outstanding, times the current share price indicates the market value, or "market capitalization" of the company. Why do companies issue more stock?... That's simple. To raise more money for the company. But it's the reason why they do it that matters. If it's to keep it from going under... to make debt payments... that may not be a good sign. But if it's to fund a cutting-edge new technology & product launch, that may be a pretty good reason. And that may actually cause the stock price to go up after they announce the secondary offering & reason for it. If a company decides to dramatically increase the number of its outstanding shares (or has a history of doing so in the past, through secondary offerings), this can indicate a certain level of risk that your shares may be diluted, resulting in a drop in share price (and stock losses) for you. In addition to looking at your company's past decisions to offer more stock (and number of times, if any, after their initial public offering), you also want to look at its competitors, and how many shares they have outstanding, as a possible indicator of your company's likelihood to offer more stock to raise funds.
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Your company's stock - Number of Shares Outstanding: We find that Intel Corp. has issues, and has outstanding, 5.52 billion shares of stock. [link to this information - here >]
Competitors' stock - Number of Shares Outstanding: You now know that Intel's top direct competitors are: Texas Instruments (TXN), Analog Devices (ADI), STMicroelectronics (STM), and Advanced Micro Devices (AMD). Now, just repeat the step using the same link above, but enter the competitors' stock symbols to determine the number of shares outstanding. [link to this information - here >]
Comparison of all stocks - shares outstanding:
Intel (INTC) - 5.52 billion shares outstanding
Texas Instruments (TXN) - 1.24 billion shares outstanding (23% of Intel's # of shares)
Analog Devices (ADI) - 297.69 million shares outstanding (5% of Intel)
STMicroelectronics (STM) - 878.32 million shares outstanding (16% of Intel)
Advanced Micro Devices (AMD) - 672.13 million shares outstanding (12% of Intel)
Share stability and volatility: A greater number of shares outstanding can also support the claim that a company has greater price stability, given that it takes many more shares traded to create a significant percentage movement in the stock. Contrary to this, the stock with a much lower number of outstanding shares, like ADI above, representing only 5% of Intel's total, could be more vulnerable to price manipulation, requiring much fewer shares to be traded up or down to move the stock price.
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