Chapter 4 Web Safari

Finding Beta

Question: What is the value of Beta for Dell? Are there different values of Beta for Dell available on the Internet? If so, why are there different values? This web safari shows you how to answer questions such as these.

Use the following directions to find Dell's current situation.

Beta Source 1

Go to http://finance.yahoo.com. You may enter the ticker symbol for a company, such as Dell, in the field next to the Get Quotes button (note: if you don't know the ticker symbol, you can use their link to Symbol Lookup, shown above the Get Quotes button). Click on Get Quotes after you have entered your company.

After clicking on Get Quotes, you will see a screen with the ticker, time of the last trade, closing price, dollar and percent change in price, and the day's volume (number of shares traded). Directly below this data, there are links to additional information. You will want to click on profile in the section below the ticker symbol.

After clicking on profile, you should come to the following URL: http://biz.yahoo.com/p/d/dell.html. The screen will have information such as Business Summary, Financial Summary, Company Address, Officers, etc. Scroll down the page until you get to the box labeled "Statistics at a Glance-NasdaqNM:DELL". The Beta for Dell is shown in the Price and Volume statistics. Yahoo! actually receives this Beta value from http://www.marketguide.com/home.asp (Multex Investor), as do many other websites.

Beta Source 2

For an alternate source of Beta, go to http://www.bloomberg.com. You may enter the ticker symbol for a company, such as Dell, in the field under Stock Quotes at the top of the page (note: if you don't know the ticker symbol, you can use their link to Look up symbol). After entering the ticker symbol, you will click on the Go button.

After clicking on the Go button, you will come to the following URL: http://quote.bloomberg.com/apps/quote?ticker=dell&x=8&y=15. Scroll down the page until you get to the Fundamentals section, which is above the charts. The Beta for Dell is given in the Fundamentals section. Notice that this Beta is different than the one from Yahoo!

Beta Source 3

For an alternative source of Beta, go to http://stocks.internetnews.com/ and you will get the Internetnews.com website. You may enter the ticker symbol for a company, such as Dell, in the field under "Get Quotes: at the top of the page. After entering the ticker symbol, you will click on the arrow button.

After clicking on the arrow button, you should be at the following URL: http://www.internetnews.com/stocks/quotes/quoteredir.php.

Why are the values for Beta different?

You have noticed that Yahoo!, Bloomberg, and Wall Street Research Net all have different values of Beta for Dell. How is this possible for such a difference to exist? The answer lies in how the various sites calculate Beta.

Bloomberg Beta:
Bloomberg calculates beta using 36-60 months of returns (it doesn't say whether it includes dividends when calculating returns). It uses the S&P 500 as the market index.

Yahoo! (MarketGuide) Beta:
The Market Guide Beta uses 60 months of returns, defined the percentage price change (it ignores dividends when calculating returns). It uses the S&P 500 as the market index. Beta values are not calculated if less than 24 months of pricing is available.

WSRN Beta:
The 60-Month Beta uses total returns (which includes dividends) the 36-Month Beta uses percentage price changes (it ignores dividends). It uses the S&P 500 as the market index. A minimum of 12 monthly returns is required for this calculation.

Despite the similarity in the way that these sources calculate beta, the resulting estimates are often quite different, possibly due to how frequently they update their estimates.


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