Correlation Between Stock Price And Financial Information Under Full Circulation Condition

In the capital markets, changes in stock prices of listed companies, and despite the emotional impact of investor behavior and macroeconomic factors, such as GDP, interest rates, money supply, inflation rate, exchange rate, but in the final analysis, price of listed companies is determined by its intrinsic value Listed companies publish annual financial reports, which have a very important role to the changes of the stock price,by which the individual investors understand the profitability of listed companies, the operations and growth of the company, an important case way for investors to make rational decisions provide useful information.In this paper, the perspective of investors stand to the CSI300Index constituent stocks in Shanghai and Shenzhen A-share listed companies as the research object, analyze the company’s stock price and the extent of the role of financial information, hoping to get the stock price the key financial indicators influence so through information analysis of these financial indicators obtained to predict the company’s future earnings situation, ultimately making judgments about stock prices, provide a reasonable basis for investment decisions.For the above purpose, after data processing, paper selected Shanghai and Shenzhen300Index constituent stocks in144listed companies as samples to investigate the relationship between stock prices2011-2013and2010-2012annual financial information. In summary, based on the results of previous studies, using stepwise regression method for data processing, select a series of related financial indicators, and according to the price model to study the correlation between stock price and the financial information, obtain the following empirical results:Stock prices and earnings per share, net assets per share and Tobin Q have a significant correlation for three consecutive years, and the regression coefficient is significantly different from zero, indicating that earnings per share, net assets per share and the stock price Tobin’s Q are the factors those have an impact effect. Stable existence of these three financial indicate that investors investing in long-term practice, gradually realize that earnings per share, net assets per share and an important influence Tobin’s Q of the three indicators of stock prices. However, from the beginning of the assumption of22financial indicators to the final results of three empirical financial indicators, and they also reflect aspects of the company’s profitability and ability to grow,showing that may not comprehensive enough attention to the point when investors conducting financial analysis, ignoring the solvency and operational capacity concerns. On the basis of empirical results, the author puts forward the corresponding investment strategy advice:1. In the past three years the relationships between stock price and return to earnings per share, net assets per share and between Tobin’s Q are relatively stable, strong explanatory power, and P values are very good, especially the Tobin Q value, stable in seven consecutive years down, the effect of the strongest showing the stock price for the full absorption of financial information for the three financial indicators to predict stock prices during the segment that is more successful that the financial information has predictive value. Therefore, investors need to focus on these three financial indicators considered in accordance with the basic financial information of listed companies when making investment decisions, and according to the changes of the three financial indicators to make reasonable predictions about stock price movements.2. High Tobin’s Q value reflects investors’stock market valuation is high, stock prices deviate from the intrinsic value of the company, investor presentation irrational state, then according to Tobin’s Q value rises to stock investments which is unwise; Tobin’s Q is underestimated, indicating that the value of financial assets below replacement cost business, this time enterprises increase investment in new industries is detrimental, but through the acquisition of corporate equity capital markets, mergers and acquisitions, and expanding the scale of the enterprise is rational behavior, meaning that the acquisition may set off a frenzy. Tradable shares under the age of free flow, conversion funnels and industrial assets of financial assets between the unimpeded. Tobin’s Q is too high or too low, and will guide funds between financial assets and industrial assets conversion, so Tobin’s Q has a point value the role of long-term trends in the presence of mean reversion, stable at a reasonable level.After several years of a bear market, the overall valuation of the stock market stabilized, which can be seen from the SSE trend changes in the past three years, Tobin’s Q value stocks fall, the overall level is low, indicating that the stock market has been at a low level, little down space, but there are still differentiated phenomenon. During stock trading, we can be based on Tobin’s q value of the company, industry, research and analysis to make investment decisions. Based on previous studies, trying to do the following innovations:(1) Innovation research perspective. Based on the study of the results of previous studies, specializing in the2011-2013correlation between stock prices and financial indicators accounting information circulation between the coming eras, at present, China’s securities market has not yet been studied in this regard, which is the innovation of research perspective.(2) Financial data indicator selection of innovative methods. Using step wise regression method, so the selected indicators and stock prices are closely related, to avoid arbitrary indicators applied in order to choose the best stock price close relationship with several indicators, in order to guide the stock investment behavior, has a strong practical value.(3) Innovation of The research result. Empirical study found that declining stock price volatility, net assets per share and share price reflects primarily the ability to grow and Tobin’s Q and earnings per share reflect the underlying profitability, especially Tobin’s Q regression coefficient is very obvious, and continuous three significant obviously, this is different from the conclusions of previous studies and found that the description of the split share reform is successful, circulation under Tobin’s Q China’s stock market has an important role in the central value that can be used to guide specific stocks investment behavior.