Questions tagged [stock-valuation]

For questions relating to the valuation of stocks, based on fundamental analysis, market conditions, etc.

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1answer
134 views

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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1answer
48 views

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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2answers
56 views

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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1answer
68 views

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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24 views

Why should investors consider the "intrinsic value" of a company paying no dividends? [duplicate]

Why should a value investor consider the "intrisic" value of a company paying no dividends, if its stock price is fully determined by the perceived value? Theoretically, it could be possible ...
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1answer
85 views

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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1answer
92 views

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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1answer
65 views

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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43 views

Confusion on what goes into Book Value

I've been reading a bit and come upon a bunch of conflicting accounts of what all goes into Book Value. What I was originally taught was that it's total net assets less intangible assets. However, ...
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5answers
8k views

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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2answers
141 views

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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56 views

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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1answer
108 views

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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Uncertain which data to use from AMC's 10-Q to calculate various types of profit margin

I've spent some time googling, and am still confused about which numbers from AMC's 2021 Q2 10-Q I should use to calculate the gross profit margin, operating profit margin, and profit margin. In ...
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2answers
169 views

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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1answer
77 views

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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1answer
57 views

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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1answer
68 views

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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1answer
94 views

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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33 views

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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2answers
147 views

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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2answers
72 views

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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1answer
72 views

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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1answer
53 views

Is book value in BVPS really just shareholders equity?

So shareholders equity is total assets - total liabilities while book value is tangible assets - total liabilities. But apparently book value in practice could also just be total assets - total ...
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0answers
116 views

Arriving at true price of Robinhood stock as of IPO

This is how I am reading the Robinhood S-1 filing. The company is entirely divided into a total of 60,500,000 shares[1]. Of this, 5,500,000 shares are promised (right; not obligation) to the ...
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1answer
42 views

How is BVPS calculated for common shares vs for preferred shares?

I've read a whole bunch of articles (eg: BVPS Definition) and all of them say BVPS is calculated using a formula similar to this: (total shareholder's equity - preferred equity) / total outstanding ...
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2answers
101 views

Market Cap, NAV and finite resources

Gave a read through this question and I believe I understand the following: NAV is the sum of a companies assets; represents the value if the company was liquidated Market Cap is (shares outstanding ...
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3answers
78 views

How does a company’s potential market cap affect share price?

As I understand it, market cap is the perceived worth of a company to the market. It’s derived from share price and shares outstanding, and I’m curious if it can be correlated to what share price a ...
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6answers
420 views

Can an investor who perpetually holds stocks lose money?

I'm a little confused about stocks, since I'm a crypto holder. Thus, I'm used to seeing value on ideas that have no inherent value. Therefore, I want to draw some hypothetical situation with some ...
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3answers
3k views

Company just got acquired. What does this mean for my common stock?

I own 200 common shares of a private company I worked for up until about 3 years ago. Today, I read in the news that they were acquired for a LOT of money but I don't know yet what the current stock ...
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62 views

Why a large proportion of a bank’s balance sheet would fall into either Current Assset or Liabilities, while defining Working Captial?

In "Valuing Financial Service Firms" by Aswath Damodaran he wrote With working capital, we run into a different problem. If we define working capital as the difference between current ...
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55 views

Treating debt of financial firm as Source of Capital, why small change in value of firm's asset value causes large change in Equity Value?

Let us treat debt as source of capital for Financial Service Firm and firm is operating on High Financial Leverage. Then how small changes in the value of the firm’s assets can translate into big ...
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1answer
85 views

Why do we discount cash flows with WACC instead of the opportunity cost?

First, a definition of WACC: The weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is proportionately weighted. All sources of ...
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1answer
54 views

Investment with Valuation and Credit Line with 10% Equity

Before I ask my question, I would like to tell that I am not from a Business background and therefore this might sound like a stupid question to most. Recently, I watched a film based on Steve Jobs ...
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1answer
59 views

Stock Offering Pricing

All- Quick general question about the pricing of secondary offerings: I understand that a dilutive offering decreases earnings / share, which is why it often leads to selling pressure. I’m wondering ...
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7answers
2k views

Why is there a distinction between growth and value investing, when growth is part of value?

I regularly come across articles about "growth vs value investing", "growth stocks beat value stocks", etc. Why is there a distinction between growth investing and value investing ...
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0answers
30 views

How prices in stock market changes in accordance with demand and supply [duplicate]

Let's assume there is a listed company x. Currently it has 100 shares issued to trade in free float market. Current price of stock is let say 10. Now please let me know if I purchase one share of ...
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1answer
129 views

Net Asset Value for Shares in Startup

Assume a situation where an employee of a privately-held startup exercises a share option and receives 1 share and decides to leave. Per the option agreement the company has an 'option' to purchase ...
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6answers
305 views

Why does a stock trade for more than the share’s intrinsic value?

In a very basic sense, stock is purchased for the ownership of a company. Its price grows on the market following supply and demand, and as such the price of a single share may rise as the value of a ...
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3answers
131 views

Are there any legal restrictions on "artificially" changing the price of a stock?

I understand that stock prices change partly based on supply and demand. In theory, could you convince a large group of people to buy a large portion of the stock so that the price would "...
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1answer
886 views

What is meant by "price" and "earnings" here?

Disclaimer: I'm a finance newbie. In the context of this checklist, I want to know what the author means "price" and "earnings". I'll try to explain how I need such basic terms ...
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1answer
73 views

How to analyse stock market and find best company? [closed]

I am asking this for Academic purpose. and would appreciate your help here and if there is any reference that can support your answers Here is the scenario There are 4 companies in the stock market A, ...
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2answers
94 views

Why analysts' estimates may differ significantly from market prices and should I follow their recommendations?

Consider the following screenshot from Thomson Reuters Eikon with the freshest price targets for Sberbank (Russia's most expensive bank): As you can see, the price targets range from +12.36% to 57.31%...
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1answer
62 views

Why does a steepening bond yield curve usually result in a price increase for stocks in the financial sector?

ARK Invest CEO/CIO Cathie Wood mentioned on 2021-01-08: We're seeing the yield curve steepens, i.e. long rates are going up but short rates are not, because the Federal Reserve is holding them down. ...
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133 views

As a person managing a small investment portfolio, does it make sense to focus most of my research on small cap / micro cap stocks?

I Found a compelling argument that people managing smaller portfolios should focus their research on smaller cap companies < 5 billion, even < 1 billion market caps. They usually only have 1 arm ...
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1answer
53 views

When a company decides to issue more shares in a secondary offering, how is the price determined?

Suppose there is a market price of shares, say $1 per share. The company decides to issue more shares. At what price should they be sold? And who determines the price? The company itself or the market?...
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3answers
224 views

What happens when a company is on the verge of bankruptcy but its stock price remains high?

Does a company automatically get delisted from stock exchanges when it goes bankrupt? Or can a defunct company's shares continue to get traded as essentially a form of cryptocurrency? Normally ...
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28k views

Can someone explain the GME short squeeze situation to a non-stock trader?

GameStop Corp. (GME) stock is over $300 at the time of this post. I understand the 10,000 foot view of the story only: That some Reddit folks are buying up shares to squeeze a short seller. But I don'...
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1answer
178 views

How to Calculate S&P Monthly Average Closing Price?

When I look at monthly S&P 500 prices at a site such as Multpl, they state "all prices are monthly average closing prices." e.g. https://www.multpl.com/s-p-500-historical-prices/table/...
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2answers
48 views

Where to find list of full name (NOT abbreviations!) of stock exchanges where particular enterprises has their stocks in? [closed]

Would anyone be able to help with the question in title? So far I only know Bloomberg and their ''Stocks'' menu and it's corresponding fields to search the public enterprises with publicly traded ...

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