Before we can do a leverage analysis of a company, we must know the basic definition of “leverage.” What is leverage? There can be two sources of capital for a company. First, equity and second is borrowed money (loan/debt). When a company uses loans to fund its capital requirements, we can say it is leveraged. What does the…
Understanding a company is essential before buying its stocks. Why? Because Stocks represent proportional ownership in a company. So, what is the utility of this information about stocks/business? Let’s understand this with an example. Consider yourself looking at two companies, Nestle India and Jet Airways. Former represents a healthy business, while the latter is languishing with…
Analysis of stocks that are new in the market is not so simple. What is the problem? The analyst must make some assumptions. For the company which has 10-year records, the assumptions-list is much shorter. Recently I met a friend who enquired me about the recent IPO (in Dec’2020) of Mrs. Bector Food. Someone advised…
Some people might question the utility of my Stock Analysis Worksheet. Why? Because it mostly rates its stocks as overvalued or of a low overall score. Some users find it frustrating and send emails to me about the plight. I can understand this feeling. We want the worksheet to throw a list of names of high-scoring, undervalued stocks….
Given a chance, an informed investor would not buy-sell stocks blindly. They would do stock analysis before investing. But only a few people do it. Why? Because of the lack of suitable tools. So what is the solution? We can analyze stocks in Excel. Please Check: Stock Screener Derived From Stock Analysis Worksheet. Generally, when…
In this method, we first estimate the ‘absolute PE’ of a stock. Then multiply the calculated PE with EPS. This will give us the fair price or intrinsic value of the stock. We will read about this in more detail. What is the PE formula? Conventional PE = Market Price / EPS. The same formula we…
[Note: Subsequent to the Reliance Future-Group deal, the company has been in a legal battle with Amazon. This legal controversy has severely hampered the long-term prospects of Future Group. The below article was written before Amazon intervened and changed the whole scenario.] Reliance retail and future group company entered into a deal on 29 August…
The stock comparison tool was one of the first tools which I developed in excel. In the last few days, we have made it more online savvy. Now, this tool can fetch stock data automatically upon click of a button. Check Our Big Screener – A WebApp The worksheet also has few limitations. It works…
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…
To do fundamental analysis of companies, it is important to look inside financial statements. There are three types of financial statements: The balance sheet, profit & loss accounts, and cash flow statement. These three documents has loads of numbers inside them. What a beginner should look for inside these reports? We will know about it…
Hindustan Zinc is the 27th biggest stock in Indian stock market in terms of its market capitalisation (Rs.1,04,661 Crore). Another feature of Hindustan Zinc which makes it my favourite is it being an almost ‘debt free’ company. There are many debt free companies in India. But as Hindustan Zinc being in the metal space, staying…
Venky’s is a stock which operates in FMCG sector. It’s line of business is Food Processing. People know Venky’s more for their line of product dealing with ‘processed chicken’. It is one of the most well known businesses operating in the small cap sector. Why Venkys stock? In last 12 months, the price of Venkys…
