A Stock Price (Agilent Technologies)
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What Affects the A Stock Price?
The A Stock price, just like any other stock price, is dependent upon many different factors: The economic outlook, supply and demand, the influence of company news, the release of a new product or service, expected growth rate, inflation, trends in society, securing new large contracts, layoffs, and even changes of management can all positively or negatively affect the A Stock price.
The volatility of the A Stock price is also predicated upon many more factors, too. However, the ones listed below are among the most significant. Additionally, the A Stock price may stagnate for short or long periods of time due to the status quo of the company and the economy being stagnant. Read on to learn more about what may effect the A Stock price.
How the Economic Outlook Effects the A Stock Price
There is no question that the A Stock price is inexorably tied to the health of the respective economy with which its company resides in. Such things like increased GDP, as well as economic recessions can all affect the A Stock price.
Now, while the A Stock price would likely need several factors to drastically alter the individual price of 1 share, depending upon the significance of the event, the A Stock price may become more volatile. Generally speaking, promising economic outlooks may positively effect the stock price, while negative economic outlooks may negatively effect the stock price.
Correlation Between A Stock Price & Supply and Demand
Supply and demand of the company's products/services can effect the A Stock price significantly. For example, if the demand for their product/services outpaces the supply, then the A Stock price is likely to go up. On the other hand, if the supply outweighs the demand for the product/services the company offers, then we may see a decreased A Stock price.
Although not directly related, typically, when investors notice that the demand for the product is higher than the supply, this is good for business. Thus, causing more investors to purchase more stock and increasing the demand for the stock. Consequently, this may increase the A Stock price as a result.
The Influence of Company News
Company news can definitely affect the share price. For example, if the company puts out a press release explaining how they are shutting down hundreds of stores nationwide, this may negatively effect the A Stock price. On the other hand, news that they are opening hundreds of new stores may increase the A Stock price as many investors may see this as a great opportunity to purchase stock from a growing company, thus increasing the demand for the stock.
While a company can definitely control its public relations to a certain degree, the price per share may ultimately be subjugated to the will of the public insofar as a large news organization puts out a story covering their opinions of the company's business doings.
A Stock Price & New Products/Services Being Released
When a new product or service is announced, this may positively effect the A Stock price. This is especially the case if the novelty item in mind is one that the public is very excited about. This anticipation may cause more people to purchase additional shares of the company, thus increasing the share price.
Contrastingly, if the company releases a product or service that is unsatisfactory to the public, then this may drastically impact the share price in a negative way. Thus, another share price factor that is somewhat out of the company's control.
A Stock Price & Expected Growth Rate
Whenever the company releases its projected earnings report for the subsequent quarter, such news may increase or decrease the share price. For example, if the projected earnings report showcases increased profits, then the A Stock price may increase as more investors purchase more shares. Conversely, if the projected earnings report shows lackluster earnings, then many investors may sell off their shares to exit their investment, thus lowering the share price.
Besides releasing a projected earnings report, there are also other expected growth rate factors that can effect the A Stock price, such as the overall consumer sentiment, as well as the investor's sentiment and trust that the company will continue to grow.
How Inflation Effects the A Stock Price
There's no question that inflation can drastically impact the A Stock price. When inflation gets out of control in a nation, this means that the purchasing power of the respective country's currency is diminished. This lack of value can effect the A Stock price negatively simply by virtue of the stock itself not holding its value when converted to the country's native currency.
Furthermore, high inflation rates in country's can lead to much larger economic problems, thus causing other issues to arise. This, in conjunction with any other related issues, may negatively impact the share price as time goes on.
How Trends Effect the A Stock Price
Like all trends and fads, they come and go. If the company were to come out with a product that was trendy, then this may increase the A Stock price in the short-term, only having the A Stock price to decrease in the long-term once the trend ends.
Releasing trendy products or services by a company may be a great way for day-traders to capitalize on quick gains. However, knowing when to sell can definitely be tricky. With this in mind, the share price is likely to be volatile when trendy products or services are released by the company.
How Securing a New Large Contract Can Increase the A Stock Price
The A Stock price can be effected if the company is able to secure a large contract with a new supplier or vender. Depending upon the specific products/services the company offers, this could drastically alter the A Stock price.
Conversely, when news breaks out that the company has lost several large contracts that were once thought to be secure, the A Stock price may lower due to many investors deciding to sell off their shares of stock before the A Stock price decreases in value.
How Employee Layoffs or Large-Scale Hiring Effects the A Stock Price
The A Stock price may increase significantly if the company lays off a large number of its employees. This is mainly due to the fact that such information will likely be released to the press in some way, thus resulting in many of its shareholders to lose hope in the company and to then sell off their shares.
On the other hand, if the company is found hiring large amounts of employees, especially for specialized positions, then this means that the A Stock price may increase as more people will purchase shares in the company with hopes that all of these new hires means growth in the company and ultimately an increase in share price over time.
How a Change of Management Can Effect the A Stock Price
When the company changes management, this may affect the A Stock price, especially if the change in management is believed to be a positive or a negative thing. For example, if a new CEO is taking over the company, who the CEO is, as well as what he or she is bringing to the table may significantly impact the A Stock price.
The same can be said if the new management being hired is a controversial figure in society, one that would likely bring about negative press to the company. Such a move may cause the A Stock price to decrease due to investors selling off their shares for fear that the A Stock price would decrease further as a result of the potential incompetent leadership of the company's new managers.
As you can see, there are a lot of factors that need to be taken into consideration before deciding to purchase shares of a stock as there is no guarantee that the price will go up or down in perpetuity. While there are many factors that a company can control, there are unfortunately just too many factors that are unforeseeable, such as future recessions, future competitors, and future news stories, just to name a few.
Disclaimer: This article is not financial advice. You should always talk to your financial advisor before you decide to purchase any stock or make any sort of investment. This article is meant to be educational only. As the reader, you assume full responsibility for any action or inaction you take based on the information laid out within this article.