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Important ! this is the definition of stock that you should know

Understanding Stocks

Understanding Stocks | Stocks are one of the most sought after capital market instruments by investors because they provide an attractive rate of return. Shares can be interpreted as a sign of individual or unilateral capital participation (business entity) in a company or limited liability company. By entering this capital, the party has a claim on the company's income, claims on the company's assets, and has the right to attend the general meeting of shareholders.

This is the meaning of shares according to experts

1. According to Sapto (2006:31)

 Shares are “Securities which are evidence of ownership or participation of individuals or institutions in a company. Meanwhile, according to general terms, shares are evidence of equity participation in share ownership of a company.

2. According to Husnan Suad (2008:29)

The definition of shares is as follows "Share is a piece of paper that shows the rights of investors, namely the party who owns the letter to obtain a share of the prospects or assets of the organization that issued the securities, and various conditions that allow investors to exercise their rights".

3. Meanwhile, according to Fahmi (2012:81)

 “Stocks are one of the most sought after capital market instruments by investors, because they are able to provide an attractive rate of return. Shares are securities that clearly state the nominal value, company name, and are accompanied by rights and obligations that have been explained to each holder.

4. Then according to Darmadji and Fakhruddin (2012: 5)

 “Share (share) is a sign of participation or ownership of a person or entity in a company or limited liability company. Shares are in the form of a piece of paper that explains that the owner of the paper is the owner of the company that issued the securities.

Stock Type

Stocks are the most popular and widely known securities in the community. According to Darmadji and Fakhruddin (2012:6), there are several types of shares, namely:

1. In terms of the ability to claim rights or claims, shares are divided into:

a. Common stock (common stock), namely shares that place the most junior owner in the distribution of dividends, and rights to company assets if the company is liquidated.

B. Preferred stock, is a stock that has the characteristics of a combination of bonds and common stock, because it can generate fixed income (such as bond interest), but also can not bring the results as desired by investors.

2. Judging from the way of maintenance, shares are divided into:

a. Bearer shares mean that the owner's name is not written on the shares, so they can easily move from one investor to another.

B. Shares in the name (registered stock), are shares that are clearly written who owns it, and the method of transfer must go through certain procedures.

3. In terms of trading performance, stocks can be categorized into:

a. Blue-chip stocks, namely common stock from companies that have a high reputation, as leaders in their industry, have stable earnings and are consistent in paying dividends.

B. Income shares, namely ordinary shares that have the ability to pay dividends higher than the average dividend paid in the previous year.

C. Growth stock (well-known), namely shares of issuers with high revenue growth, as leaders in similar industries with high reputations. In addition, there are also lesser known growth stocks, namely stocks from issuers that are not leaders in the industry but have growth stock characteristics.

D. speculative shares, namely company shares that cannot consistently earn high profits in the future, even though it is not certain.