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Toro Demo Trading

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Never invest money that you can’t afford to lose.

RISK WARNING: 68% of retail investor accounts lose money when trading CFDs.

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Earnings Per Share on eToro – What Is It?

An organisation’s income is usually the benchmark that is used to judge its success. In the previous articles, we spoke about the basic metrics to analyse when picking a stock, and this is the most fundamental one of the lot – a company should be making money if they are to do well and grow. As an educated investor, you understand that the devil lies in the details. Which is why we go deeper into this metric and see how we can understand it better.


(NOTE: Before we continue, we have to give a disclaimer that the trading products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds. CFDs are complicated instruments that are never guaranteed to provide you supplemental earnings.  In fact, Around 68% of all retail investors experienced a loss while trading CFDs. Make sure to keep this in mind before attempting to use the eToro platform yourself. All the information found on this website is not official trading advice and all practices shown are referenced for the use of the Demo account only.)


 

Ford Income eToro

As the previous article mentions, EPS is the ratio of the adjusted income of the company (net income minus the preferred dividends) to the outstanding shares. Let’s walk through this with an example – two automotive companies – Ford and General Motors. When looking at their income alone you might think that Ford, with revenue of 155.9B is doing better than General Motors, with a revenue of 137.21B.

GM Income eToro

This is where looks can be deceiving and the EPS metric can help you decipher which one is a better investment for you. When looking at the EPS metric for these stocks we can tell that Ford is more likely the bad investment.

Ford EPS eToro

Why? You may ask. This is because Ford has negative earnings per share. General Motors has a positive (and higher) earnings per share when compared to Ford – therefore, the better investment (at least with regard to EPS).

GM EPS eToro

This metric is not always taken seriously by big-time investors as there are many ways to make this number look better than the actual status of the company. Nonetheless, this is an important metric to look at when picking a stock. Another item to check is the type of EPS you are looking at. There are three types:

  • Trailing EPS: As the name suggests, it is calculated based on the previous year’s results. This is sometimes referred to as the ‘true EPS’.
  • Current EPS: It is calculated based on a projection of the current year’s results to date.
  • Forward EPS: This is an estimate of this metric for the coming year(s) based on the prevalent trends.

Now that you have a good grasp of the Earnings Per Share metric, feel free to try your hand at investing using the free eToro Demo Practice Account.


This Article is Part of A Total guidance list on How to pick individual stocks, make sure you go by the article one by one to get a bigger understanding of the total picture. 😉
  • How to Pick an individual stock Part 1 - The Strategy
  • How to Pick an individual stock Part 2 - 5 metrics to look at when stock picking
  • How to Pick an individual stock Part 3 - P/E Ratio (Price-Earnings ratio)
  • How to Pick an individual stock Part 4 - Earnings Per Share‎
  • How to Pick an individual stock Part 5 - Dividend Yield
  • How to Pick an individual stock Part 6- Company History And Strength
  • How to Pick an individual stock Part 7- Debt-Equity Ratio

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eToro is a multi-asset platform that offers both investing in stocks and crypto assets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.

Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorized and regulated by the Cyprus Securities and Exchange Commission.

Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity-specific information about eToro.

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RISK WARNING

68% of retail investor accounts lose money when trading CFDs. 

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.

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The trading products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds.
You should never trade money that you cannot afford to lose.
Please Be aware that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
68% of retail investor accounts lose money when trading CFDs.
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