I’d like to be able to select stocks based in part on this information.
One commonly used indicator is the Price to Earnings ratio or PE.
There is Trailing PE and Forward PE.
Trailing PE looks at earnings the company has had in the past.
Forward PE looks at PROJECTED earnings the company will make in the future.
A PE ratio of 5 means that for every dollar the company had in earnings, investors are willing to pay $5.00. This can be verified by simple math.
Look at this page from Bloomberg.com;
http://www.bloomberg.com/apps/quote?ticker=ba
It is a page with data on the Boeing Company. Look down to the section where it says "Earnings". The earnings for the last 12 months were 1.73 per share.
The Price to Earnings for the past 12 months is 31.858.
If you multiply 31.858 X 1.73 you get 55.11434 which is very close to the share price of $55.23 (At the time I wrote this, anyway!)
The lower the PE, the less investors are willing to pay for each dollar in earnings. Many investors pay attention to PE and seek stocks that have a lower PE as opposed to a higher one.
There are numerous other factors to consider so be diligent and do your research. PE is just one way to tell if a stock is over or undervalued.