There's more to valuing a stock than just crunching numbers. Investors have to take into careful consideration qualitative factors also, such as a company's economic moat. Moats encompass companies' competitive advantages, such as a network effect, cost advantages, high switching costs, or intang...

Another metric useful for evaluating some types of stocks is the price-to-book ratio.

How to calculate?

1. Assets-Liabilities = Book value
2. Book value/Outstanding shares = Book...

A single share of a company represents a small, but real, ownership stake in a corporation.

One stock's percentage of ownership is determined by dividing it by the total number of shares outstanding.

Stock ownership generally entitles the owner to corporate voting rights and to any di...

It is important to understand that the stock's intrinsic value is not necessarily directly tied to its current market price.

The efficient market hypothesis, a theory that states that all known information is currently priced into a stock. However, this is not always the case.

While using the P/E ratio as a building block is probably the most popular method to value stocks it is far from the only way. Another common technique to valuing stocks is the price/sales ratio. The P/S ratio is determined by dividing a company's market cap -- the total value of all the companie...

Unfortunately, there's no P/E ratio set in stone that makes a stock a buy if it's below, or a sell if it's above.

Often value investors and growth investors will look for different things in a P/E ratio. 

• Value Investors - the lower the P/E ratio the better.
• Growth Inves...