You have decided to start investing. It is a great decision. However, you should learn how to invest, what shares to buy, and how to withdraw your income. In this article, we will consider the main principles of investing, methods of reducing risks, and means of withdrawing funds. We will also focus on the liquidity and profitability of the most popular stocks in the world.
How to start
In this section, we will find out what a novice investor should do if he or she decides to get into investing.
First of all, let us focus on the stocks and their types.
Every business needs a source of income to grow. A stock or bond is one of such sources. Investors buy them, allowing the company to fund its growth.
In other words, it is a share in a company's business that entitles an investor to a portion of its profits. Since securities are globally divided into two types, let's look at both of them:
| Preferred | Common |
| Cannot vote | Can vote |
| Cannot have a share in the company | Have a share in the company |
| Fixed dividends | Initially, the dividend sum is unknown |
| Dividends are fixed and cannot increase | Dividends may rise |
What are dividends?
A dividend is a portion of a company's net income that is used to pay out to the holders of publicly traded securities. Dividends can be paid in many different forms, such as cash, stock, or other forms. An organization's dividend amount is determined by its board of directors and requires shareholders’ approval.
There is also another important point to consider. The company is not obliged to pay dividends. If a corporation faces a cash shortage or needs funds to reinvest, it can skip paying a dividend.
So, we have learnt the basic concepts. What is more, you can earn not only by buying cheap and selling expensive assets but also through dividends.
Factors to focus on when buying
Reading this section, you will learn what to focus on when forming your investment portfolio and how to reduce risks in the online stock markets. We also continue to determine what shares beginners should buy and what they should focus on when buying them.
The purpose of any trade is to buy an asset at a lower price and sell it at a higher one. As a result, you get back the money you invested and profit from the increased price of the asset. Although it seems simple, online trading is considered risky, and many investors lose money and get frustrated with this method of additional income.
The fact is that the rule of any online market is to buy before it rises and to sell before it falls.
To understand when stocks will rise and when they will fall, investors can use the following analysis tools:
- Global news
Global events can have a significant impact on both the rise and fall of stocks. This largely depends on the nature of the event. If the event is positive, for example, higher demand for a company's products, the securities may rise, and vice versa.
- Charts
Using price charts in online trading is called chart analysis. Traders also use various chart figures or patterns by placing them on a price chart. Thus, they can predict a rise or fall in prices.
- Financial indicators
This type of analysis is called fundamental. Its essence is that the stock has a fair price, which may differ from the market price. The fair price or ratio is made up of several financial indicators of the corporation. If it is higher than the market price, there will be growth. If it is lower, there will be a decline.
How to choose
So, we have already studied such concepts as stocks and dividends. We have figured out what analytical tools you can use and what shapes assets’ prices. Now, let us find out how beginners should choose a stock, which industries they should pay attention to, and how they can diversify their investment portfolio.
There are a few fundamental rules to follow when choosing shares.
Choose stocks of trusted and familiar companies
A novice investor should, first of all, pay attention to organizations whose services he or she has already used or companies with many years of experience. The business of the chosen companies must be clear to the investor. This will also help with the further analysis of quotes.
Study corporations that are leaders in the industry
Since industry leaders show results that exceed those of other companies, their stocks also show stability. However, they may cost more than the assets of other companies in the sector. You should also pay attention to the news about these companies. It can tell you a lot.
Diversify your investment portfolio
Diversifying your portfolio means allocating assets in a way that reduces the risk of losing money. Experienced investors buy securities from companies in different industries. In case one of them draws down and loses profits, the securities of other companies will continue to work and bring income.
Diversification is perhaps one of the most important tools for an investor. It is a necessary tool, as trading in online markets carries great risks.
Stock yields
In this section, we will learn how to choose assets based on their yield, how to determine the yield based on the term of the investment, and which stocks are the best to buy.
Beginning investors need to pay attention to two principles that will allow them to gain income from stock trading:
To buy stocks at a low price and sell them at a high price (we have already talked about this principle).
This principle suggests both high profitability and a high risk of losses. At first, it is not recommended for beginners to choose so-called intraday trading (when all transactions take place within one trading day).
To buy stocks for a long period of time. In this case, there are also risks. However, if you take into account the stability of issuers (companies, whose securities you buy), the stability of the industry, and the forecasts of analysts, your profit is likely to be higher and the risks will be lower.
When choosing which shares to buy in the long term, it is worth considering the following company's performance:
- Demand for the product (sales volumes, logistics)
- The company's history of crises (adaptation, financial statements)
- Volume of credit obligations (amount of debt, number of lenders)
- Diversification of business activities (creation of new products)
- Independence of the organization from government support
- News about the corporation in the media (plans for the future, statements of top managers)
So, we have figured out what factors should be taken into consideration when choosing an instrument to invest in. We have learnt what approaches exist. Now, we need to answer the last question: to avoid risks or to try to benefit? It's up to you to decide.
Shares of well-known companies and factors affecting them
Micron Technology, Inc.
Micron Technology, Inc. is a US multinational corporation that was founded in 1978. It is a manufacturer of semiconductor-based computer storage products, including dynamic RAM, flash memory, SSD media, and USB drives. The company is headquartered in Boise, Idaho. In 1984, Micron shares were worth $2.09 apiece. At the time of writing, the stocks cost $57.34 apiece.
Let us find out what boosted the growth of the company's shares and what factors can influence them.
Micron Technology shares can be influenced by the following factors:
- Rising popularity of semiconductors
Semiconductors are widely used in microelectronics, automotive electronics, and electric cars. If their popularity stays as high as it is now, the stocks will rise.
- Business with China
At the moment, there are difficulties with supply and logistics. If the situation remains the same, the value of the stock could decline, and vice versa.
- US economic situation
The key interest rate, GDP, imports and exports, unemployment rate, announcements made by the government, and foreign debt.
- Geographic expansion
Currently, the organization has offices and production facilities in 17 countries. If Micron Technology continues to expand its territories wisely, its shares are likely to rise. If there are production failures in some offices, the share price may start falling.
Analysts foresee stable growth in the company’s securities in the next 5 years. There is a high probability of success in case of correct management and production decisions during this period.
Mallinckrodt Pharmaceuticals plc
Mallinckrodt Pharmaceuticals is an American-Irish manufacturer of specialty pharmaceuticals, generics (analogs), and radiopharmaceuticals. The corporation was established in 1867. Headquartered in Ireland, it also has offices in the United States.
In 2013, Mallinckrodt shares were worth $60.9 apiece. However, they lost their value by 2023, trading at $9.49 apiece.
Let us find out what caused such a slump in the share price.
The following factors could have influenced the company's shares:
- Bankruptcy proceedings initiated in 2020
The company suffered multi-billion-dollar lawsuits issued by the US government over the non-compliance of drugs with pharmaceutical regulations. At present, the corporation's securities can be bought only on the over-the-counter market.
- Inflated prices of medicines
A drug used to treat multiple sclerosis went up in price several times in a short period of time. Mallinckrodt was unable to justify this situation.
- Stocks delisting
This is the removal of all securities of Mallinckrodt from all global exchanges. Against the background of such rumors, their price tumbled.
- Falling financial indicators even before the bankruptcy
Sales of drugs dropped dramatically amid rising prices, rumors of bankruptcy, and non-compliance with pharmaceutical standards. As a result, the organization lost the trust of consumers. This may have also contributed to the fall in shares.
- Failure to pay dividends
In theory, investors were prepared for this given the financial position of the business. Nevertheless, many people lost tens or even hundreds of thousands of dollars.
At the moment, the corporation is still in limbo. Angry shareholders are demanding their deposits back, while the US and Irish authorities are exerting pressure on the company’s management. In the near future, even if the company manages to restructure or rebrand, it will be very difficult to win people's trust again.
Macy’s
Macy's is a US firm established in 1858. It sells clothing, shoes, cosmetics, furniture, and jewelry. The headquarters is located in New York City. At the time of writing, the corporation consists of 800 stores nationwide and about 120,000 employees.
The company's securities first appeared on the stock exchange in 1992. Macy's shares were trading at $9.88 apiece at the time. However, a bit later, they started to bring a steady income. At present, the store chain's shares cost $22.7 apiece. Let's find out whether a nearly $12 increase over 30 years is reasonable and what caused it.
- Pandemic period and store closures
In 2020, most of the stores were closed because of the pandemic. The corporation reported a loss of $3.58 billion at the end of the year, which obviously affected its stock performance.
- Slow development of online sales
While competitors have long been developing mobile applications and ordering clothes from home, Macy's management has only recently addressed this issue. People are used to clothing delivery, and this inconvenience could also have affected the shares.
- Falling revenue caused by goods delivery
This reason comes from the point above. Consumers are ordering almost everything online, and this trend is developing. In addition, the cost of running huge stores is soaring.
- External debt size
Today, the debt of the organization exceeds $14 billion. Such a debt is causing concerns among shareholders and is affecting the share price.
Thus, one of the most popular clothing retailers is losing its position. Notably, its status on the stock exchange is relatively stable. Since analysts' forecasts vary, it is worth taking a wait-and-see approach.
Alphabet Inc.
Alphabet Inc. is a US company that operates Google Inc. and all its subsidiaries. In 2015, Google's management decided that they needed a separate legal entity to manage all structural divisions. This is how Alphabet Inc. was created.
The company is headquartered in California. The number of employees is about 190,000. In 2015, just after the reorganization, the shares of the company cost $490 per unit. At present, the company’s stock is worth $91.
The following factors may have influenced the volatility of the IT giant's shares:
- Increased demand for online advertising
If Google Ads remains in demand, the shares of the company will grow.
- Diversification of business
Nowadays, Alphabet invests not only in the Internet but also in smart devices, namely fitness trackers and smartwatches. If the firm continues to develop all divisions wisely, it can affect the movement of stock exchange indicators.
- Information security
In September 2022, Alphabet acquired Mandiant, an information security company. If business bears fruit, the corporation's position on the stock exchange can probably grow.
- Cost optimization
Any organization has to optimize its costs from time to time, especially such firms as Alphabet, which has a market capitalization of $1.38 trillion. If the company can do this and uses these funds for development, its shares may gain in value.
We have analyzed the factors that may affect Alphabet Inc. shares. Curiously, analysts also predict further growth of the corporation. Everyone decides for themselves whether to invest or wait.
Ford Motor Company
Ford Motor Company is a world-famous company that specializes in the production of automobiles. It was founded in 1903 by Henry Ford. The headquarters is located in the state of Michigan, US. To date, the number of employees totals 180,000.
Ford’s initial public offering (IPO) took place in 1972. Let us take a closer look at changes in the company’s share price. After the IPO, the shares were trading at $2.45 apiece. Now, one share costs $12.55. What affected the giant's share price?
- Investments in other areas
In 2019, Ford Motor acquired unmanned car developer Argo Al for $2.6 billion. In 2022, the investment failed to meet its targets, and the subsidiary was liquidated. This caused a decline in stocks.
- Financial indicators
Reports, forecasts, US economic policy, Fed key interest rate, GDP, car exports and imports. Such data always influences the stock price.
- Dividend payment policy
If dividend payments are paid annually and are steadily increasing, investors become more confident, thus boosting the price of shares.
- News about the organization
Traders should pay attention to statements provided by Ford officials: a change of top managers, development plans, posts on social networks, interviews, reviews, and releases of new car models.
We have talked about the history and shares of one of the most popular car producers. Analysts suppose that Ford’s shares will grow in the long term, i.e. slowly but stably.
CD Projekt Red
CD Projekt Red is a Polish developer of games for personal computers and consoles. It was established in 2002. The headquarters is located in Poland. It is a subsidiary of CD Projekt, specially created for the development of "The Witcher" game series. To date, the number of employees is about 800. The company's shares are traded on the Warsaw Stock Exchange. Their price is denominated in the Polish zloty ($1 = 4.43 PLN).
What ups and downs has CD Projekt Red experienced? In 2015, after the release of the first game, "The Witcher", the company’s shares were trading at 23.77 PLN apiece. At the time of writing, their value was 132.84 PLN. What can affect CD Projekt Red's share price?
- Games with bugs and errors
In 2020, after the release of the long-awaited CyberPunk 2077 game, the stocks of the organization fell by 50%. This was due to the huge number of complaints from players about the abundance of defects, bugs, and errors. Hasty decisions cost the management a fall in the value of the stock.
- Refusal to distribute games to some regions
Such rules can also trigger a fall in the stock price.
- Staff replacement
Since the staff of CD Projekt Red is not very large, the replacement of, for example, artists, scriptwriters, or developers can provoke negative feedback from fans, which, in turn, can affect the movement of shares.
- Development of boring and unspectacular games
Sometimes management decisions about new projects lead to a corporation taking on games with weak storylines, unexplored characters, or ugly graphics. Sales of such games can be very weak. Thus, shares may lose value.
We looked at the shares of Polish game developer CD Projekt Red and factors that may affect them. Although The Witcher and CyberPunk 2077 are popular, the firm's stock performance remains unstable. Analysts suppose that it is better to take a wait-and-see approach.
NVIDIA Corporation
NVIDIA Corporation is a US developer of graphics processors, mobile technologies, and desktop computers. It was founded in 1993. Its headquarters is located in California, US. The corporation's developments are also used in the production of autonomous cars.
NVIDIA went public in 1999. How did investors react to the appearance of NVIDIA on the stock exchange? During the first year, shares of the company cost $3.91 apiece. At the time of writing, one share cost $238.9. What factors can influence the company’s shares?
- Increased demand for cryptocurrency mining equipment
NVIDIA graphics cards are considered to be of the highest quality. That is why they are also used for mining. Thus, demand for the company’s products boosts the stock price.
- Mismatch between competitors' criticism and the real state of affairs
In 2003, 2012, 2014, 2015, and 2019, the organization's competitors accused NVIDIA of low quality without any proof. As the accusations dissipated, the corporation strengthened in the eyes of investors. This led to a rise in shares.
- Quarterly dividend payments
Since the IPO, the company has been paying dividends steadily. Since 2012, dividends have been paid on a quarterly basis. Such a gesture has helped to win the confidence of shareholders, which, in turn, has boosted stocks.
- Stock split
In 2021, NVIDIA conducted a stock split (1:4) to allow more shareholders to buy shares. The split could mean that the corporation is confident in its position and is focused on continued growth. It could also have influenced the growth of the stocks.
So, we have examined the stock growth dynamics of one of the most recognizable video card manufacturers. Analysts foresee a further increase in the value of the firm's securities. However, everyone decides for himself what shares to buy.
Carnival Corporation & plc
Carnival Corporation & plc is an international cruise company established in the United States in 1972. It is considered one of the largest travel companies in the world. It consists of 20 subsidiary cruise firms. Shares of the organization are included in the British stock index FTSE 100 and the American stock index S&P 500.
The company’s shares appeared on the stock exchange in 1987. The initial share price was $4.22. Today, its value is $11.99. Let us find out what has affected the stock price of the company.
- Pandemic and self-isolation
In 2020, the company suffered huge losses due to self-isolation and the temporary suspension of all cruises. The stocks obviously went down.
- Sales of extra services
Tickets for the corporation's cruises are far from cheap. In addition, customers should pay extra money for nightclubs, bars, pools, casinos, and sports clubs. Not all customers like such services. That is why the negative feedback on the issue might have affected the firm’s shares.
- External debt
In the financial report for the first quarter of 2022, Carnival Corporation & plc unveiled its external debt of about $35 billion. Such news could demotivate shareholders, thus spurring a decline in the share price.
- Falling demand for cruise travel
The majority of Carnival's customers were retirees. After 2020, they became wary of purchasing cruise tickets due to cramped quarters, fear of catching the coronavirus, and the consequences of infection (prolonged self-isolation on the ship). This may also have contributed to the depreciation of shares.
In 2021, analysts expected a rise in the company’s shares. However, the decline is still in force. It is probably worth taking a wait-and-see approach.
Virgin Galactic Holdings Inc.
Virgin Galactic Holdings Inc. is a US space company that is working on tourist suborbital flights and launches of artificial satellites. It is part of the Virgin Group. It was established in 2004 in the United States, with its headquarters in New Mexico, US.
Despite this, Virgin Galactic was listed on the stock exchange only in 2019. Then, one share cost $11.75. Today, the corporation's stocks have a value of $6.44 apiece. Why did they fall?
- Additional issue of shares
When a corporation wants to raise money for growth, it issues new stock. This is what is called an additional issue of shares. Thus, the company receives new shareholders, but investors who bought shares before may lose ownership and interest on dividend payments. Such a situation could easily spur a fall in stocks.
- Competitors
Space tourism is an expensive hobby, but the organization's competitors, namely Elon Musk's SpaceX and Jeff Bezos' Blue Origin, are also trying to grow and develop. Such competition may affect the stocks, especially against the background of their successful launches and flights.
- Uncertain dividend payment date
Since many analysts write that Virgin Galactic is rather a story of slow growth, dividend payments to shareholders are not expected soon. This could also cause a decline in the value of its shares.
- News about the company
Everything should be taken into account, namely, statements from Richard Branson, posts on social networks, video reports about launches and flights, plans, interviews, and feedback from employees. All these factors can affect share movements.
It is worth noting that despite the low price of shares and weak growth, analysts assume that over time, the company’s stocks will rise when the corporation begins to show stable results. However, each investor should make such decisions independently.
Facebook is a US social network and one of the most popular in the world. It is part of Meta Platforms, Inc. The headquarters is located in California, US. The social network was created in 2004.
The IPO took place only in 2012. At first, Facebook shares cost $38.23 per piece, now the price is $338.54. The asset has appreciated almost 10 times. Let us find out what happened:
- A large number of social networks and competition
Along with Facebook, other social networks are also making huge efforts to grow and develop. Thus, Twitter, Instagram, and TikTok are rapidly expanding. The increased popularity of any competitor could cause a drop in the corporation's stocks.
- Number of active users
The more users visit the social network and the more new users sign up, the faster the shares will grow.
- Number of advertisers
Since Facebook has a huge number of active users, many companies see it as a great advertising platform. The more advertisers there are, the more often people click links, the more activity is recorded, and the more reasons shares have to rise.
- Financial reports
Any financial report, including plans, determines the price of a share. If a report is gloomy, stocks go down. If a report is positive, they rise.
So, we have learnt that one of the most influential social networks is also affected by external factors. At the moment, the shares of the social network are close to an all-time high. However, everyone decides for themselves whether to invest or not. We continue to study popular organizations and decide what shares a beginner could buy.
Tesla
Tesla is a US firm and one of the most recognizable manufacturers of electric cars and batteries. It was established in 2003 in the United States. The headquarters is located in Austin, United States. The corporation is directly linked to the American billionaire Elon Musk, one of the most influential people in the world.
Only in 2010, Tesla’s shares were listed on the stock exchange at a price of $35.32 apiece. At the time of writing, the shares are worth $1,199.78. Let us see what affects the asset:
- Elon Musk and his statements
As of today, Elon Musk is an opinion leader. His posts on Twitter can both make shares grow and collapse. Ironically, in the 21st century, posts on Twitter are also indicators of stock movements.
- Tesla car shows
The corporation unveils new models at trade shows. The advantages and disadvantages of vehicles can also boost or lower the share price, respectively.
- Business diversification
In the event that the management chooses diversification and invests in other related businesses, the stocks may rise.
- Optimization of car prices
Consumers want electric cars to cost less while offering the same features. If management optimizes car assembly and can make the final product cheaper, such an action is likely to affect stock performance.
We took a look at Tesla, one of the giants of our time. Some analysts even call the situation with the incredible growth of the corporation's shares "The Tesla Phenomenon". With the growing popularity of eco-friendly products, electric cars are being sold more and more. Thus, analysts believe that the growth in shares is likely to continue. However, each investor decides for himself whether to buy or wait.
GameStop
GameStop is a US retailer of consoles, console games, and accessories. It was founded in 2000 in the United States. It is headquartered in Dallas, Texas, United States. Two years after its establishment, the corporation went public.
GameStop, whose shares were worth $12.1 apiece at the beginning, has shown ups and downs in the last 10 years. Now, its shares are worth $18.65 apiece. What might have affected the asset?
- Self-isolation in 2020
The store chain's business was based on the physical presence of customers at its stores. Online ordering, console and game delivery were not envisioned and were developed at an accelerated pace. This might have affected the movement of the asset.
- Artificial purchase of securities and increased capitalization
In 2021, users of the social network Reddit united and started buying back GameStop shares. By doing so, they wanted to "teach a lesson" to hedge funds, which were speaking unflatteringly about private investors in online trading. In about a week, investors artificially raised the price of securities from $17 to $483 per unit. When the flash mob ended, the price began to decline again.
- A shift to online services
This factor comes from the first point. At the moment, players are switching to online ordering. This means that people no longer buy games in regular stores but buy and download them from the cloud services of PlayStation and Xbox game consoles. Thus, GameStop's sales are inexorably falling, like its stocks.
- Adapting business to new realities
Nowadays, GameStop is headed by Ryan Cohen. If his decisions help the network adapt and work in a new way, it can probably cause further growth in shares.
Taking all of the above into account, analysts are predicting a rise in stocks in the long term. It is likely to be slow, though persistent. In this case, many experts recommend waiting to see how the company will behave under the new conditions.
Pfizer, Inc.
Pfizer, Inc. is a US corporation that specializes in pharmaceuticals. It was established in 1849 in the United States. The headquarters is located in New York, US. In 1972, Pfizer Corporation entered the stock exchange. At that time, Pfizer's shares were worth $0.91 apiece.
In 2023, the price is $41 apiece. The movement of any asset is influenced by different factors. In this case, the factors are as follows:
- Dividend payout
At present, Pfizer is steadily paying dividends to its shareholders. This shows a stable state of affairs, which, in turn, can boost the share price.
- Scandals
From 1996 to 2021, the organization faced scandals and accusations of monopolization of the market, non-compliance with established pharmaceutical standards, and overpricing. In some cases, the corporation won lawsuits, while in others, it simply ignored them. As a rule, accusations cause a decline in stocks.
- Financial reports
A lot depends on whether shareholders are satisfied with the firm's financial reports or not. Investors have been monitoring Pfizer/BioNTech's vaccine sales for the third year in a row. Demand for this vaccine strongly influenced the share price during the pandemic.
- Pharmaceutical line extension
Pfizer is developing a myriad of drugs, from Viagra to the COVID-19 vaccine. Most of them are effective. If management continues to introduce new and effective drugs to the market, it can affect consumer confidence and stock growth.
Analysts are predicting a rise in the stock price of the company. Considering all factors, including scandals, Pfizer is doing quite well. Of course, it is up to each investor to decide whether to buy or not its shares.
Magnit
Magnit is a Russian organization specializing in the retail sale of food. It was established in 1995 in Moscow, Russia. The company’s shares appeared on the stock exchange in 2010.
Magnit, whose shares cost 4.101 rubles per piece, has been showing stable results. At the time of writing, the stocks are worth 4.543 rubles apiece. Let us find out what affects the company’s shares:
- Risk of dividend cancellation
If a corporation pays dividends unstably or not at all, it hits the reputation of investors. This fact may lead to a decrease in the share price.
- Financial reports
Transparent financial reports can influence the share price. If indicators increase, shares are likely to gain in value. If the company fails to achieve its financial goals, its stocks may fall. Meanwhile, incomplete reports may impact the stock's volatility in the near future.
- Stocks value stagnation
The value of the stock has hardly changed in 13 years. This can also scare away new investors. As a result, the company will not profit from the purchase of new securities. This factor may affect the share price.
- Adaptation to new realities
Given that many items have disappeared from the shelves of Magnit stores, the management needs to replace them with Russian alternatives. If this happens quickly and with proper quality, it is likely to boost investors’ confidence and the price of shares.
Analysts disagree on the future of the Russian food retailer. Some are sure that its shares will continue to decline, while others suppose that Magnit will soon be able to offer consumers new positions and will confidently grow.
Ozon Holdings PLC
Ozon Holdings PLC is a Russian marketplace created in 1998. This online store sells millions of products, including clothing, home appliances, food, electronics, and more. The corporation is headquartered in Moscow, Russia.
More than 20 years after the creation of the business, that is, in 2020, Ozon Corporation was registered on the Moscow Exchange and on the NASDAQ exchange. At first, its shares were trading at 2.227 rubles and $30 apiece. This year, the value is 1.700.5 rubles or $11.60 apiece. What caused a decline in the company’s shares?
- No dividend payment
Ozon officially announced that it will not pay dividends to shareholders. This is explained by the desire of the management to invest all available funds in development. On the one hand, the company has the right to make such statements. On the other hand, such statements can cause a slump in stocks.
- High competition
Along with Ozon, online sales are developed by such marketplaces as Yandex.Market, Wildberries, Apteka.ru, and Detmir.ru. Against the background, shares of online marketplaces may decrease in cases of longer delivery, fewer delivery points, or a lack of feedback from technical support.
- Logistics
In 2021–2022, there were several cases when Ozon's logistics failed and consumers received their orders with a long delay. Such factors also affect stock performance.
- Increasing popularity of online orders
This fact could boost Ozon's shares. With the beginning of self-isolation, the popularity of internet orders has grown considerably. Sales on marketplaces began to grow. If the company continues to develop the business correctly, the value of shares may increase.
We have focused on one of the most popular Russian marketplaces. Many analysts predict the development of the business.
Qiwi plc
Qiwi plc is a Russian group of companies that provides payment systems and financial services. It was established in 2007. Its headquarters is located in Cyprus. In 2013, Qiwi Corporation was listed on the NASDAQ exchange. The stock was priced at $17 apiece.
Today, their value is $5.67 apiece. What caused a decline in value? Let us find it out.
- Unsuccessful investments
In 2017, Qiwi invested in the Rocketbank installment card. The investment did not justify itself, and this business segment was sold at a loss. The corporation's stocks began to decline as a result.
- Regulatory restrictions
In 2021, regulatory authorities imposed restrictions on many international transfers using the QIWI system. Thus, clients of the organization lost the ability to pay for purchases abroad. This could also affect the stock position.
- Irregular dividend payments
Qiwi, if possible, tries to pay dividends to shareholders, but it happens irregularly. Consequently, investor confidence was lost, which resulted in a fall in the company’s stocks.
- Competition
Many banks introduce universal payment systems without commissions. Clients can also choose a convenient, fast payment system and transfer funds without fees. The advantage of the Qiwi system is the possibility of international transfers. Nowadays, this opportunity could also be lost. The company’s management has to search for new ideas.
So, we have looked at a Russian payment system provider, one of the pioneers of payment solutions. Analysts are providing mixed forecasts. Some of them suppose that the business is unprofitable and that it is not worth buying shares. Others say that the corporation will be able to increase its turnover and improve its position in the market. Nevertheless, each investor should make an independent decision.
Yandex
Yandex is a Russian IT corporation providing Internet search services. It was established as a separate company in 2000. It is headquartered in Moscow, Russia. The corporation held an IPO in 2011.
According to information from 2014, Yandex shares were worth $36.93 apiece on the NASDAQ exchange. At the time of writing, the shares cost $18.94 apiece. Notably, now they are only traded on the Moscow Stock Exchange. Let's find out what factors may influence the movement of the IT giant's stocks:
- Yandex.Direct
The contextual advertising system continues to gain popularity among users and advertisers. It is in demand and generates profit. If the organization continues to develop in this field, such a decision may boost shares.
- Yandex.Market
Marketplace Yandex.Market is also gaining momentum. After self-isolation, people appreciated the possibility of online ordering and are trying to buy most of the necessary goods online. If the management continues to optimize this service, it may serve as a driver of the shares’ growth.
- News about the company
Any activity in the media can affect shares: statements of top managers, financial reports, users’ feedback, interviews, and posts on social networks.
- Development plans
If the management of the organization is able to promote the business or find other effective branches, it can have a positive effect on investors and cause a rise in shares.
Yandex is a Russian pioneer of information search on the Net. Many analysts predict the growth of the company in the near future. If it is able to adapt to new conditions, gain a foothold, and continue to develop under such circumstances, the value of its shares may rise.
PJSC Gazprom
PJSC Gazprom is a Russian organization that supplies natural gas. It was established in 1990. It is headquartered in Moscow, Russia.
According to information on the Net, the company went public in 2010. Gazprom shares were worth $6.52 apiece. At the moment, they cost 162.88 rubles apiece and are traded only on the Moscow Stock Exchange. What affects shares of the gas giant?
- Gas price changes
Nowadays, the stock value is highly dependent on changing gas prices. Since Gazprom is an international company and sells gas to other countries, gas prices can change. This affects profits and the value of shares.
- Dividend payments
Since 2012, the corporation has been paying dividends to shareholders every year. This factor, despite the others, could have a positive influence on stock performance.
- Reduced supply
Many countries have either refused to supply Gazprom or are trying to establish purchase prices on their own. Thus, a large amount of unsold gas may remain in the company's reserves. This, in turn, may have a negative impact on the stock price.
- Rising tax burden
In 2022, the corporate tax burden increased significantly. A higher tax burden means higher expenses, while higher expenses mean less money for development. In this light, shares may begin to decline.
So, we have looked at the factors that may affect the stocks of Russia's largest natural gas supplier. Although there are many obstacles and sanctions, analysts predict share growth in 2023 amid an increase in the price of gas. However, each investor should decide for himself whether to buy Gazprom shares or not.
PJSC Mobile TeleSystems
PJSC Mobile TeleSystems is a Russian provider of telecommunications services, which include mobile communications, mobile Internet, fixed-line Internet, television, and satellite Internet with television. It was established in 1993. It is headquartered in Moscow, Russia.
The corporation went public in 2011. MTS shares were priced at $6.95 apiece on the NASDAQ exchange. At the time of writing, the value is 257.9 rubles apiece. Shares are traded only on the Moscow Stock Exchange. What factors may affect the share price?
- Dividend payments
Since 2019, MTS has been steadily paying dividends of 28 rubles per share to shareholders every year. It is a positive factor. If the payments continue, it could have a positive effect on the value of the provider's shares.
- External debt
The external debt of the organization totals about 414 billion rubles. The situation is quite complicated. If the company begins to reduce its debt and reflects this in its financial report, it will regain the confidence of investors. If it fails to do so, its shares will decrease.
- Competitive market
Even if we do not take into account regional providers, there are still Beeline, Megafon, and Tele2. These companies are also trying to develop, launch new tariffs and loyalty programs, as well as constantly increase the speed of the Internet. If MTS succeeds in a particular struggle and increases the number of clients, its shares may surge, and vice versa.
- Business diversification
The modern world is developing exponentially, and businesses have to come up with new directions to remain in demand. If MTS expands its economic presence by introducing new products and systems, its stocks may also grow.
Many analysts believe that 2022 was a challenging year for the organization. There are recommendations to take a wait-and-see attitude. However, the final decision is always made by a particular investor.
Mail.ru
Mail.ru is a Russian Internet portal that includes several services: e-mail, cloud storage, information search, and a messenger. The company was established in 1998. It went public in 2012 on the London Stock Exchange.
Mail.ru Group shares were worth $42.6 apiece. Now, the value is $2.7 apiece. Curiously, since 2020, Mail.ru shares have been traded only on the Moscow Stock Exchange. In 2023, their cost has been 488 rubles per unit. What could affect the share price?
- Lack of dividend payments
Mail.ru does not pay dividends. The company reinvests most of its profits in development. This fact can both reduce the confidence of existing investors and be an obstacle to the purchase of shares by new ones. This may cause a decrease in the stock's value.
- Business expansion
The company also includes the following areas that are gaining popularity: free classifieds service Yula, social networks Odnoklassniki and VK, as well as professional development services Skillbox and GeekBrains. If these products attract enough customers and investments, the company's shares are likely to start moving upward.
- News about the company
Any references in the media can influence the movement of shares: statements of the management about plans, financial reports, news of the company, lawsuits, and posts on social networks.
- Number of advertisers
The firm has launched the myTarget targeted advertising service in the VK and Odnoklassniki social networks. At the moment, the service is developing quite rapidly. In case of favorable conditions and a large number of clients, the success of this service may positively affect the share price.
We have considered what factors may affect the stock of Mail.ru. Many analysts predict a rise in cases of successful integration of all the services into one ecosystem. However, keep in mind that each investor makes an independent decision.
Conclusion
In the article, we have figured out what shares are, what shares a newbie should choose, what to pay attention to, and what risks to consider. We also took a close look at the shares of popular companies on the stock exchange and the factors that affect them.
IMPORTANT
Online trading carries the risk of losing all your funds. If you decide to trade, make sure that you cooperate with a reliable broker and have thorough theoretical knowledge.
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