Historical Prices and Valuation of Shares
The value of a stock price reflects its probable future earnings or expectations on how the firm will perform. For example, If Apple Shares trade at $122.50, that means investors are valuing the firm’s future potential at that value. Investors primary concern is how Apple Inc will perform in the next 5 years rather than how it performed in the last few years. In Theory, a company’s stock has all the values priced in, this is known as Efficient Market Hypothesis EMH.
Stocks will be used interchangeably with shares. Why you buy shares of corporation, you are buying yourself a stake in the firm. When, people but a corporation’s share, their overall ownership in the firm is very firm. When investors buy shares of a firm, they become it’s owners, no matter how small their ownership is.
The share price of a firm is not a window to its past, but nonetheless historical share price information can help you find out how investors treated a company’s stock after it failed to deliver its quarterly earnings, how its stock price moved when it reached or exceeded investor’s expectations. Share price history can also help you make possible educated guesses on how a corporation’s investors or stocks would react given a merger or a lawsuit. Although each situation would be different, whether it is a merger or a new product release, knowledge of a corporation stock’s historical performance can help you in your investing decisions.
To find out old stock quotes, you can have a service that provides you with raw data which displays firm’s stock movements for a specified period of time, or you can have a service that provides you detailed historical stock information movements along with news events that caused it to trend that particular direction. The later service is a better option as it gives information that directly affects the share price.
One of the services that I found useful was “End of Data”, I found the service to provide about 15 years of past share quotes, although that costs money. If you are a Wall Street Journal Subscriber you will have access to excellent financial information about different companies listed in exchanges.
