Questions tagged [stock-valuation]
For questions relating to the valuation of stocks, based on fundamental analysis, market conditions, etc.
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Why use NOPAT as numerator for ROIC
I have been researching online, and it appears that the prevailing recommendation is to use NOPAT (Net Operating Profit After Taxes) for calculating return on invested capital. The purpose of using ...
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Margin of safety quote from Graham's Security Analysis
The following is from Benjamin Graham's classic Security Analysis:
Examples of Analytical Judgments. In 1928 the public was offered a large issue of 6% noncumulative preferred stock of St. Louis-San ...
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When to use different valuation multiples
My basic question is this: I know that investors can use several different multiples when thinking about valuing companies (P/E, EV/EBITDA, EV/Sales, etc.) but how do you know when to use each one? E....
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GE historic stock price on DOD changed
My father owned GE stock and he died in November. In late November, for my appointment with the probate court, I looked up the closing stock price for the day he died. Unfortunately I downloaded the ...
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Is there a way to download the stock values of companies? [closed]
Recently, my bank approached me with an offer for an investment fund, its basket containing about thirty stocks.
I wanted to know about the evolution of those stocks, so I tried looking for "...
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Calculate PE ratio of equally weighted index
I need to calculate Price-to-Earnings Ratio (PE Ratio) of an Equal-weighted index.
Sum of market caps
P/E for Market-cap Weighted index = -------------------
...
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(DCF) Why do you add up ALL the future cashflows (discounted back) shouldn’t it just be The last years cashflow?
If every year company XYZ retains (most) of its earnings, reinvesting it. So in the last year(of your projection) Company XYZ only has its current cashflows! (as it reinvested it).
Similarly, if ...
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How can a company be losing money from year to year but have the same/increased cash and cash equivalents?
I am looking at a company (Uber) which to my knowlgede has no new investors. So how is it’s cash and cash equivalents slightly higher yoy.
When it’s been losing money (yoy?
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Ignoring dividends, why do we expect a stock to go up when a company does well? [duplicate]
I understand there are advantages to buying stocks and reaping dividends. Remove dividends from my question as well as owning voting rights in a company. What I don't understand is why we expect a ...
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Calculating stock prices falls and rises
Let's say I close my investment of $25 in a stock which is currently down from 313 to 123, I calculate my loss with this equation:
( ( Close - Open ) / Open ) * 100 = %change
Which would leave me with ...
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(DCF valuation) Will the cashflows (per share) of company XYZ, every year in the future (2023...) be added up and go into its shares price every yr
In a DCF valuation, all the cash flows for "x" period of time are added up and discounted back. So let's say this companies share price is $1 and the streets expectations is that the ...
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What does it mean to commence Chapter 11 to complete marketing and sales process? [duplicate]
I hold some stock in this company that just filed for chapter 11:
https://3dprint.com/295633/chapter-11-bankruptcy-who-will-buy-fast-radius/
What will happen to my shares?
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Should stock price and P/E ratio increase when dividends increase?
In private conversation, someone told me that an increase in dividends should always increase stock price and P/E ratio, if all other factors remain unchanged. The "proof" involves the ...
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Discounted cash flow: meaning of terminal value formula
I am reading a book about stock valuation using fundamental analysis — Accounting for Value by Stephen Penman. The following discounted cash flow (DCF) formula appears in chapter 2 with almost no ...
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Do stock prices increase by the anticipated amount of the dividend in the period before the dividend is paid?
It is known that stock prices will fall by the amount of the dividend on the ex-dividend date:
Do stock prices drop due to dividends?
Does a stock really dip in price on the ex-dividend date? And why ...
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Why does a companies value not reflect all the revenue over the last couple of years (intrinsic value/DCF question)
Take a company like Ford , if you would go 10 years back and create a DCF with the earnings that ford has IN FACT made over the last 10 years your numbers would be quite over its current share price! ...
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How do you figure out why a stock has a price/book ratio of 0.07?
Value investing puts great emphasis on the book value of a stock, which is said to represent what the shares are worth. But how do you determine whether a book value is comparable to your stock value?...
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what is more to Market Capitalization formula?
I wonder what is more to Market Capitalization formula ?
I am mostly an ETF investor, but follow some stocks with few # of shares and when I look at SPCE about 4-5 years ago its market capitalization ...
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When we invest in a corporation that has high capital expenditure every year but it is buying warehouses, is that less of a concern?
I think the usual idea is that capital expenditure that goes to $0 value is not usually a good thing. For example, if a company needs to buy 5 new fancy coffee maker for $800 every 5 years, and the ...
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Is the price-to-book ratio too arbitrary to be useful to investors?
Many financial portal websites show the price-to-book (P/B) ratio of companies. For example, Yahoo Finance shows this P/B ratio for TotalEnergies SE:
Under IFRS (IAS 16 — Property, Plant and ...
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Getting intraday price movements/candlesticks several months in the past on Yahoo Finance Charting
I am trying to look at intraday trading movements (seeing the price line/candlesticks for the day) several months in the past for the sake of analysis.
For example, on Binance, I would be able to ...
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Where can I find Industry Standard Stock Prices? [closed]
I'm taking up Business Finance and part of my research project is to compare my assigned company's yearly stock prices to the industry standard. However, I do not know where to find this nor am I ...
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Can someone explain this discrepancy in Air France stock price vs. Air France ADR price?
So recently Air France decided to issue lots of new shares, to raise money, making its stock price plummet on the Paris exchange by more than 60%:
https://finance.yahoo.com/quote/AF.PA?p=AF.PA&....
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Relationship between interest rates and DCF discount rates
I've been reading that interest rates lower the over future cash flows of equities, hence their decline as money can be moved elsewhere for better returns.
What is the direct relationship between ...
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Valuation Multiples for Growth Stocks
I recently started hearing about Valuation Multiples after the recent market drop. Many of the stocks which went higher during the pandemic have come down to 2019 level. ZM is an example. In 2020, ZM ...
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Combining DCF and P/B
If you have two companies with the same value according to DCF, but they differ in their equity. Let's assume company A has 1M USD in equity while company B has 0M USD equity. This means that company ...
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How can a company's equity go up when it doesn't generate a profit
There's a pattern I often see on companies balance sheets that I don't understand. The company will fail to generate a profit for the year, however their equity (assets - liabilities) increases.
I'll ...
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Why did Prosus NV's PE ratio fall so sharply?
Consider the historical P/E ratio of Prosus N.V. ADR (OTC markets: PROSY):
(source: https://ycharts.com/companies/PROSY/pe_ratio)
(source: https://www.gurufocus.com/stock/PROSY/data/pe-ratio)
...
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What is the relationship between the market cap, share price, and cash in the market?
Let's say that a company entered a stock market selling 1000 shares $1K each in total $1M.
What would need to happen in order to double the price of a share? Are both scenarios valid?
1st
Additional $...
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What does overvalued stock do when a company goes out of business?
So what does overvalued stock do? My assumption is that if a company decides to close its shop tomorrow, then it would give us less money compared to what actually overvalued stock is representing. ...
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Buffett believes Bitcoin has no value and no future. Isn't it the same with stocks? [duplicate]
Just listened to Warren Buffett's thoughts on Bitcoin and he claims that Bitcoin is a non-producing asset which has no value. Buffet also points out that it is just the hope that others will be ...
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What is the "Stock/Equity Ratio"?
I'm reading the Intelligent Investor and I found this:
Stock/Equity Ratio. This is the ratio of the market price of the junior stock issues* to the total face amount of the debt, or the debt plus ...
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Where does the formula for terminal value come from?
I am a beginner investor and I had this doubt in DCF models of valuation.
Where does the formula for terminal value even come from? Like I have seen this video: https://www.youtube.com/watch?v=...
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Stock Analysis Equation Questions
I am a newer value investor and I am trying to slowly learn. I came across these equations and I am not able to find for sure online or in the books I have available what these abbreviations/acronyms ...
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Intrinsic value of a stock which pays out dividend
I want to find the intrinsic value of a stock which pays out dividend but not a significant amount.
In particular, is there a way to incorporate the dividend payout in the discounted cash flow ...
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Will Didi make a profit from listing and delisting on the New York Stock Exchange?
You can find the news on all the media. Didi is planning to delist from the New York Stock Exchange after only six months. It floated shares for a value about 4 billions dollars last June. If they buy ...
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What is the significance of the valuation ratio EV/EBIDTA for investors?
I am new to stock market. I have a really basic doubt. Hope someone can solve it here
I recently came across a valuation ratio which is EV/EBIDTA.
Lets say there are two companies A and B. A wants to ...
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Does the stock price drop if one of the largest shareholders of the company sells all their shares?
I don't know if it makes sense, I'm just wondering about its logic. For instance, Elon Musk has a huge amount of Tesla shares and right now he is selling his shares like a madman. Does the Tesla stock ...
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Does buying stock have time duration that automatically sell after the period end? If not, how are people losing to stock? [duplicate]
I'm totally new to the stock market. I don't understand how some people do not win with stocks.
If you decide to sell your stock whenever you want to, then why can't you wait for long period of time (...
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How do early-stage share prices of companies going public via SPAC change?
I currently have a number of series C, non-voting shares (< 1000) in a company that would go public via SPAC on this Monday. Since the price of each unit of SPAC is always price at $10 per unit for ...
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How to evaluate an index? (other than PE based approach)
I am looking to invest in passive funds. In India there are least 5 popular indexes (Nifty 50, Nifty Next 50, Nifty MidCap 50, Nifty MidCap 100, etc.,). I am trying to find the most undervalued index ...
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What are the reasons behind the index going higher and higher every year? [closed]
The following is the chart for NASDAQ from the year 1981 to 2021. The chart shows:
Index went so higher in 2000 to 5000 points
Bottomed in 2002 to 1250
Went up and bottomed in 2008 to 1400
The Market ...
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What does a negative terminal growth rate mean?
Say I truly believe in efficient markets (prices reflect all available information to investors). Under this condition, say I figured that a company has a growth rate that is negative perpetually.
...
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Last stock trades in after hours sessions of a single share that causes huge movement in price
When I sometimes scan down after hours price changes, I notice tickers where there is a single last transaction that has a huge effect on the AH price.
This is not an anomaly. I see it everyday on a ...
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Where can I obtain research reports [closed]
As EU citizen interested in investing in US stocks, I'm interested in reading some local research about US companies from US banks/brokers. Where can I find such research reports? Do I have to pay or ...
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Finding the share price of a company couple years from now using the dividend discount model (practice)
A company is growing at a constant rate of 8%. Last week it paid a dividend of $3.00. If the required rate of return is 15%, what is the price of the share three years from now?
My initial thought was ...
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CAPE inflation adjustment
How does the CAPE calculation take into account inflation?
I thought that previous years earnings were discounted by prior year's inflation into today's money and then averaged. If that were the case ...
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How does Best Buy thrive with competition from Amazon? [closed]
Looking at best buy stock recently and it is near all time high, I personally don't go but I'm wondering how is it that they are doing so well when companies like Toys r us goes bankrupt?
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Is deal value equal to the enterprise value?
If a buyers pays $1.55 per share to get 6,480,000 shares of the target company such that the total outstanding shares of the target is 12,180,265.
So deal value is $1.55 x 6,480,000 = $10.044M, but is ...
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Do convertible preferred shares increase common equity when converted?
Do convertible preferred shares increase common equity (increase the ratio of common equity to preferred equity) when converted? For example there $4m in shareholders equity and there are 4 shares, 2 ...
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