Intrinsic Value of a Stock
Offen i curious how to calculate a intrinsic value of a stock,below some example copy from invest smart.
On the PE it self, it is need to be more
careful to just fix any PE. indeed what is the normalized PE it should be. i
think much related to industry and market willing to give what PE. better way
may use the Top and Lowest PE and get a mid range and some reasonable
adjustment.
On this review could be 1 of the similar
example. but indeed shall more focus on the growth it can archive. for mature
bank seem not much can be growth. buy on weakness for blue chips stock. as blue
chips bank die means economy died.
this is a good example of strong cash flow
position. which means the cash flow generate from operation is the best. to
find out check the Quarter report or annual report on the Net cash flow
generated,
Weak cash flow is borrow money
from credit company to run operation which will incur a huge cost of interest.
but suitable borrowing is good depending on the nature and cash flow
management.
Summary
Apparently this is much simple
way of calculate intrinsic value. anyway focus on growth is much more important
and growth is hard to be measure.
Good info!!
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