Share prices change every day in the market because of differences in supply and demand factors. Understanding supply and demand factors are easy, but what is difficult to understand is why traders will prefer one stock over the other. Several factors are responsible for deciding investors sentiment about company stocks, including,
Company Earning
Investors’ perception of the company
An earning base, like earning per share
A valuation multiple, such as the P/E ration
Understanding stock price movements will help you get clarity on how to invest in stocks.