Glossary


C
Calendar Spread

These are also called “Horizontal Spreads.” A calendar spread consists of buying a longer-term call (put) and selling a shorter-term call (put) with the same strike (usually at-the-money). These spreads tend to make money if the stock stands still, but they can incur losses if the stock moves sharply in either direction. See “Calendar Spreads,” Ot061023.Pdf in our Reports Archive.  

Call

The redemption of a debt by the issuer before maturity. Companies generally call convertibles to force conversion into common shares or to refinance the debt at a lower interest rate.

Call Date

The date on which protection expires or call terms changed.

Call Option

A call option gives you the right but not the obligation to buy the stock at a particular strike price over a specified time period (American-Style) or on a specified date (European-Style).  

Call Protection

A period of time during which the issuing company cannot redeem the debt. Call protection comes in two forms. (1) Uncondidtional call protection whereby the issue cannot be called before the date set at issuance; and (2) conditional call protection where an issue cannot be called before a ceratin date unless certain conditions have been met.

Capacity at Peak

The capacity at peak, per megawatt, for Electric Utilities as stated in the Electric Operating Statistics

Capacity at Peak (Electric Utility Industry)

A utility’s generating capability plus purchases from other utilities less sales to other utilities. 

Capacity Utilization

The ratio of actual production levels to maximum possible production levels, expressed as a percentage. The Federal Reserve Board publishes capacity utilization figures monthly for both the overall economy and individual industries.

Capital Change

A stock split, stock dividend, merger, or spin off that affects the number, and sometimes, the composition of shares of stock owned by an investor. See “Adjusted Strike Price.”  

Capital Funds (REIT Industry)

Stockholders' equity (net worth) plus subordinated debt.

Capital Funds to Total Capital

Capital funds to total capital

Capital Gains

The increase in value of an asset (e.g. real estate or investment) compared with the purchase price. The gain is not realized until the asset is sold.

Capital Gains Declared per share

The increase in value of an asset (e.g. real estate or investment) compared with the purchase price, as expressed on a per-share basis. The gain is not realized until the asset is sold.

Capital Gains Per Share After Tax (Real Estate Industry)

Profits derived net of income taxes on the sale of property (either land or buildings) during the year, expressed in terms of the number of common shares outstanding at year end.

Capital Spending

The outlays for property, plant, and equipment for the year. Excludes funds spent for acquisitions.

Capital Spending per ADR

The outlays for property, plant, and equipment for the year expressed on a per-unit basis. Excludes funds spent for acquisitions.

Capital Spending per ADS

The outlays for property, plant, and equipment for the year expressed on a per-unit basis. Excludes funds spent for acquisitions.

Capital Spending Per Share

The outlays for property, plant, and equipment for the year expressed on a per-unit basis. Excludes funds spent for acquisitions.

Capital Spending per unit

The outlays for property, plant, and equipment for the year expressed on a per-unit basis. Excludes funds spent for acquisitions.

Capital Structure

The mix of financing sources (debt, equity, etc.) that a company uses to fund its operations. Value Line provides a snapshot of a company's capital structure on its full-page reports.

Capitalization

See Market Capitalization.

Cash

The sum of cash on hand plus short-term securities, such as Treasury bills, that can readily be converted into cash.

Cash & Equivalents to Current Liabilities

Cash ratio, measuring the amount of cash and equivalents in current assets to cover current liabilities

Cash & Marketable Securities

See Cash

Cash Assets

See Cash

Cash Flow

The sum of net income and non-cash charges (depreciation, amortization, and depletion) minus preferred dividends (if any).

Cash Flow Line

Also known as the “Value Line.” See page 17 for more information. 

Cash Flow per ADR

The sum of net income and non-cash charges (depreciation, amortization, and depletion) minus preferred dividends (if any), divided by units outstanding.

Cash Flow per ADS

The sum of net income and non-cash charges (depreciation, amortization, and depletion) minus preferred dividends (if any), divided by units outstanding.

Cash Flow Per Share

Net profit plus non cash charges (depreciation, depletion, and amortization), less preferred dividends (if any), divided by common shares outstanding at year end.

Cash Flow per unit

The sum of net income and non-cash charges (depreciation, amortization, and depletion) minus preferred dividends (if any), divided by units outstanding.

Cash Settlement Options

Options where the ultimate settlement is cash based on the price of an underlying instrument or a basket of underlying instruments. Index options are always cash settlement options.

Cash to Net Asset Value

Percent cash to net asset value

Cash-Covered Put

This a combination of a put write and enough cash to cover the strike price less the premium. A cash covered put is a “synthetic” or “equivalent position” to a covered call at the same strike price. That is both positions require approximately the same amount of capital to establish and offer approximately the same dollar risks and rewards. See “Writing Cash-Covered Puts – Doing the Math,” Ot071217.Pdf in our Reports Archive 

CD

Abbreviation for Certificate of Deposit. See Certificate of Deposit.

Certificate of Deposit

Interest-bearing deposits that a financial institution may require to remain on deposit for a specified period of time. Also called CDs or time deposits.

Class of Options

All listed option contracts on the same type (i.e., calls or puts) on the same underlying security (e.g., all listed IBM call options).

Closed-End Investment Company (or Fund)

A company or fund that has a relatively fixed number of shares (hence the term ''closed-end'') that are bought or sold through broker/dealers on the stock exchange.

Closing Transaction

This is the transaction that offsets your existing long or short option position. Usually, you should specify whether you are entering into an opening or closing transaction.  

Collar

Usually a hedge of an underlying stock position consisting of buying a lower-strike put and selling a higher strike call. Depending on the strike prices, collars entail a debit or a credit of premium. Alternatively, they have no net cost if the call and put premiums are equal. See “Stocks Hedged with Collars,” Ot090709.Pdf in our Reports Archive. 

Combined Ratio (Insurance [Property-Casualty] Industry)

The percentage of losses to premiums earned plus the percentage of expenses to premiums written. The break-even point is 100%; in other words, a combined ratio of less than 100% represents an underwriting profit and a combined ratio of more than 100% represents an underwriting loss. 

Combined Ratio (Insurance Property/Casualty/Industry)

The percentage of losses to premiums earned plus the percentage of expenses to premiums written. The break even point is 100%; in other words, a combined ratio of less than 100% represents an underwriting profit and a combined ratio of more than 100% represents an underwriting loss.

Commentary

Analyst review and critique of recent and projected corporate performance, as well as discussion in regard to the investment merits of the corresponding stock.

Common Dividends Paid

Total common dividends, excluding special dividends, paid by a company

Common Equity

See shareholders' equity.

Common Equity Ratio

Shareholder's equity divided by total capital (i.e., long-term debt, preferred equity, and common equity).

Common Shares Outstanding

The number of shares of common stock actually outstanding at the end of a company's accounting period. This total excludes any shares held in the company's treasury. The figures for common shares outstanding in previous years are fully adjusted for all subsequent stock splits and stock dividends.

Common Stock to Surplus (Insurance Industries)

The market value of the common stock held in the insurance company's investment portfolio divided by statutory net worth.

Common Units Outstanding

The number of units actually outstanding at the end of a company's accounting period. This total excludes any units held in the company's treasury. The figures for common units outstanding in previous years are fully adjusted for all subsequent splits and dividends.

Company Profile
The Company Profile or Company View Page is Value Line’s new digital layout for each stock that we follow. The data is organized in more than two dozen modules. These modules can be removed, resized, and hidden, so the user can create their own customized report.
Company View Page
The Company View Page or Company Profile is Value Line’s new digital layout for each stock that we follow. The data is organized in more than two dozen modules. These modules can be removed, re-sized, and hidden, so the user can create their own customized report.
Compound Growth

The annual rate of growth of an investment when dividends or interest are reinvested.

Conservative Stocks

Equities that tend to possess strong financial positions and low Beta coefficients. In addition, these stocks tend to be ranked 1 or 2 for Safety™.

Consumer Price Index

A Labor Department index published monthly designed to reflect changes in the cost of living. Housing; food and beverage; and transportation costs account for about 80% of the value of the index, a measure of inflation at the consumer level.

Contingent Orders

These are orders that specify only doing a particular transaction when the stock price (or some other price) reaches a particular level. 

Control Income

Pretax income for selected financial services companies

Conversion Price

The effective price paid for common stock when the stock is obtained by converting either convertible preferred stock or convertible bonds or debentures. For example, if a $1,000 bond is convertible into 20 shares of stock, the conversion price is $50, that is, $1,000 divided by 20.

Conversion Price(2)

The price of the stock, set at issuance, that when multiple by the conversion ratio equals the par value of the convertible.

Conversion Ratio

The number of shares for which a convertible security can be exchanged, generally set at issuance.

Conversion Value

The value of a convertible security if converted into common shares. That is, the price of a share multiplied by the conversion ratio.

Convertible Debentures

Long-term debt instruments, not secured with collateral, that may be converted into a specified number of shares of common stock.

Convertible Preferred Stock

Preferred stock that may be converted into a specified number of shares of common stock.

Convertible Price

The price at which the convertible security was quoted.

Corporate Profits

The aggregate of all profits for U.S. corporations reported by the Commerce Department as part of the domestic income and product (GDP) accounts. Reported both on a pretax and after-tax basis. They are somewhat different from profits reported to shareholders and profits reported for tax purposes.

Coverage Universe
Refers to the lists of stocks that are included in a user’s subscription. Analyst Covered refers to the roughly 1,700 stocks that are covered in The Value Line Investment Survey. Small & Mid-Cap Featured, as the name suggests, refers to the 1,800 stocks that make up The Value Line Investment Survey – Small & Mid-Cap. Information on all of Value Line’s subscription packages can be accessed from within the Subscribe tab.
Covered Call

This is a combination buying (or owning) the stock and writing a call on this stock.  Covered calls can offer varying degrees of income, protection and profit potential. See our report “Covered Calls - Doing the Math,” Ot071126.Pdf in our Reports Archive. 

Credit Spread

These are bull or bear spreads that give you a net credit of premium.  Bull put spreads and bear call spreads are both credit spreads since the option written has a higher premium than the one purchased. See “Option Spreads I – Basic Bull and Bear Spreads,” Ot070823.Pdf. 

Current Assets

Assets that may reasonably be expected to be converted into cash, sold, or consumed during the normal operating cycle of a business, usually 12 months or less. Current assets usually include cash, receivables, and inventories.

Current Assets per (common) share

Assets that may reasonably be expected to be converted into cash, sold, or consumed during the normal operating cycle of a business, usually 12 months or less, expressed on a per-share basis. Current assets usually include cash, receivables, and inventories.

Current Assets to Current Liabilities

See current ratio.

Current Liabilities

Financial obligations that will have to be satisfied within the next 12 months. Current liabilities include accounts payable, taxes, wage accruals, and total short-term debt, or Debt Due (the sum of notes payable and the portion of long-term debt maturing in the operating year).

Current Position

The components of a company's working capital are presented in this table in Value Line reports on industrial companies. The difference between current assets and current liabilities is known as Working Capital.

Current Ratio

The sum of current assets divided by the sum of current liabilities.

Current Yield

The annual convertible bond coupon divided by the current price.

Customer Portfolio Margin (CPM)

This is a new margining system developed by the Options Clearing Corporation that uses risk-based calculations to determine margin. In most cases, CPM affords the investor much more efficient use of his or her capital than does the standard “Regulation T” margining system (see “News on the Margin Front,” Ot071105.Pdf). 

Cyclical Stock

Stocks of companies whose earnings tend to fluctuate with the economy (the opposite of a defensive stock).