Volume ISN'T the key component for increasing pric

Volume ISN'T the key component for increasing price. That's an old witches fable. Here are the KEY COMPONENTS to a PRICE INCREASE.

This value, as determined by the discounted cash flow analysis or its equivalents, consists of two components:

1. Current value ratios , such as the price-earnings ( P/E ) ratio and price-book ( P/B ) ratio. ^[3] The PE ratio, also called the multiple , gives investors an idea of how much they are paying for a company’s earning power. The higher the PE, the more investors are paying, and therefore the more earnings growth they are expecting. High PE stocks – those with multiples over 20 – are typically young, fast-growing companies. P/B is the ratio of a stock’s price to its book value per share. A stock selling at a high PB ratio, such as 3 or higher, may represent a popular growth stock with minimal book value. A stock selling below its book value may attract value-oriented investors who think that the company’s management may undertake steps, such as selling assets or restructuring the company, to unlock hidden value on the company’s balance sheet.


2. Earnings growth which may be reflected in measures like the Prospective Earnings Growth ( PEG ) ratio. The PEG ratio is a projected one-year annual growth rate, determined by taking the consensus forecast of next year’s earnings, less the current year’s earnings, and dividing the result by the current year’s earnings. ^[4]