Shares of Iamgold Corp (IAG) are moving on volatility today 1.46% or 0.09 from the open. The NYSE listed company saw a recent bid of 6.235 on 800609 volume.
When looking back historically at the stock market, it is easy to see that there are always extended periods of upturns and downturns. The speed at which the market can shift can cause even the most experienced investors stomachs to turn. When times are good and markets are rising, it can be easy to forget that a downturn may be just around the corner. Being prepared for sudden changes can help the investor plan for the unknown as best they can. Getting caught off guard can be extremely disconcerting and lead to irrational decision making. There is rarely any substitute for extensive study and focused dedication. Investors who put in the extra time to create a backup plan may be better able to traverse the road when the market environment inevitably shifts.
Now let’s take a look at how the fundamentals are stacking up for Iamgold Corp (IAG). Fundamental analysis takes into consideration market, industry and stock conditions to help determine if the shares are correctly valued.
First we’ll look at Return on Assets or ROA, Iamgold Corp (IAG) has a current ROA of 14.08. This is a profitability ratio that measures net income generated from total company assets during a given period. This ratio reveals how quick a company can turn it’s assets into profits. In other words, the ratio provides insight into the profitability of a firm’s assets. The ratio is calculated by dividing total net income by the average total assets. A higher ROA compared to peers in the same industry, would suggest that company management is able to effectively generate profits from their assets. Similar to the other ratios, a lower number might raise red flags about management’s ability when compared to other companies in a similar sector.
Another key indicator that can help investors determine if a stock might be a quality investment is the Return on Equity or ROE. Iamgold Corp (IAG) currently has Return on Equity of 21.26. ROE is a ratio that measures profits generated from the investments received from shareholders. In other words, the ratio reveals how effective the firm is at turning shareholder investment into company profits. A company with high ROE typically reflects well on management and how well a company is run at a high level. A firm with a lower ROE might encourage potential investors to dig further to see why profits aren’t being generated from shareholder money.
When it comes to trading stocks, even veteran investors are prone to making mistakes. Investors will often get bombarded with stock tips touting the next breakout star. Following these tips without fully looking into the situation can wind up being a huge mistake. If even one person knows about the next big stock, chances are many other people already do as well. Getting in too late on a stock that has already made a move can leave investors wondering what went wrong. Taking the time to properly research any stock investment may be a good way to eliminate costly impulse buys. Just because a stock has been running hot doesn’t mean it will continue to go higher in the future.