If you like to estimate intrinsic value of a stock, then start with Net Current Asset Value Per Share (NCAVPS). Why? Because it is the easiest to calculate and is most reliable of all. Yes, for me it is even more reliable than DCF method. But the big problem with NCAVPS method is that, its…
PEG ratio is a useful valuation metric for stock investors. Potential investors can use it to gauge if a stock is overvalued or undervalued. PEG is a ratio which establishes a correlation between company’s price valuation with its future growth prospects (see here). We are more conversant with the use of P/E ratio (Price to Earnings…
Generally speaking, good news about a company can take its stock price up, and bad news can take the price down. In real world, lots of news keeps floating about companies. Some news are good and some may be bad. Hence the struggle of price moving up or down is happening every second. But what…
We often come across stock metrics like Face Value, Book Value, Intrinsic Value and Market Value. What does these terms mean? How important it is for us to know the difference between them? A basic question that arise here is, does these definitions help us to pick better stocks? So you can see, these terms…
The intrinsic value formula can help one estimate the ‘fair value’ of stocks. But why bother about ‘intrinsic value’? Why not simply buy stocks at an available market price? Because stocks will be profitable only if one buys them at a price below their intrinsic value. In fact, Benjamin Graham (The Guru to Warren Buffett)…
