Tackle Today: Security Matters
March 24, 2022
«Balance Sheet Beauties.»
Good Day Traders, Coach Greg Holmes here.
Any conversation about value would not be complete without looking at the underlying financials of a company. As we spoke about yesterday, value is what you get for what you have to pay. The what you get that we spoke about yesterday was in the form of earnings but this is only a fraction of what we expect to get when we put our hard-earned investing dollars to work. Investing is a time that we can be a bit selfish and want a little more for our investing capital. The value we spoke about yesterday was in regards to earnings and today we are going to look for a little more.
We spoke about a metric called P/E Ratio (Price-to-Earnings Ratio) yesterday and that gives us a view of how much the company makes and what our potential cost is to get a piece of the pie. Today, we want to delve into what else a company can produce during the course of running the business. A great business will produce assets as well as products and these assets have value to them and we want a slice of that pie too.
We can find a record of these assets on the balance sheet and this can give us a picture of how efficient the company is at building an asset base. We can see the raw numbers there and the overall number is important but it doesn’t tell us what the real value of the company is, for that we need another metric called price to book ratio. This number tells us what all the plants, equipment, accounts receivable and any other tangible assets are worth in relation to the current price of the stock is.
This Price-to-book Ratio (P/B Ratio) adds to the things we get for our value dollar. We not only want the earnings but a share of the assets as well. These two metrics can be used in conjunction with one another to assess the value of any prospective interests. So always be on the lookout for those balance sheet beauties!
Join the newest trading lab here at Tackle Trading: Fundamental Society. This is where we talk all things fundamental including what good and great companies look like and how they keep things healthy in all economic conditions.
🛑 Upcoming Options 101 Webinar: Iron Condor for Beginners with Coach Tyler Craig | March 28th, 2022 at 8:30 PM EST on YouTube
Join Coach Tyler Craig as he teaches everything you need to know to get started with trading Iron Condors for monthly cash flow. As the architect of Tackle Trading’s Cash Flow Condors system, Tyler brings a wealth of knowledge on the topic and will break down this popular strategy in simple, easy-to-understand terms.
In this webinar you will learn:
✅ What is an Iron Condor
✅ How to Build an Iron Condor
✅ Why Iron Condors Make Money
✅ Best Practices for Trade Management
✅ The Ideal Stock to Use
Video of the Day: Jedi Options: How to manage an Iron Condor
In today’s Jedi Options, Coach Tyler answers the question on how to manage an Iron Condor.
Chart of the Day: $XLE
This ETF tracks oil, gas, and consumable fuels; and energy equipment. The energy sector has been one of the strongest sectors in the entire marketplace and seems poised to continue in that role, This ETF can be a cheaper way to get exposure to the mega-cap companies that comprise part of its holdings. XLE looks poised for a breakout at any moment.
Today’s line up
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cashflow Club 8:30 PM EST
Held every Thursday before Friday’s option contract expirations, this show helps you perfect your favorite cashflow strategies.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.
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