Hmm ... CIMB itrade has been rather unresponsive these days.

Good lo...

Boon said don't let brokerage profit so much.

Gark, what is the easiest way to calculate fair value for a stock?

When you want to earn money, there's no easy way out!

That's his secret kung fu

Usually i will politely ask ask gark to help calculate for me... but today, feel paiseh, hahaha...
so ask what is easiest way instead


This post has been edited by lambethwalk: Apr 16 2014, 10:41 AM

I believe he has a huge Excel sheet with all the formulas and variables, ready to plug and play. Now, the easiest way is to hack his PC

WANT TO BUY THAT EXCEL SHEET!!!

Better to hire a hacker

Must be ethical wan...

I don't think he have...my guess la....

This one ah....

There are many ways to calculate fair value one, it is more of an art than science... so it depends on each individual expectation of the stock growth.

The most basic will be PE.. BUT it has a lot of limitations...My back of the envelope (ie. fast method) FV calculation will be...

FVPE = (5 Year FUTURE Growth% + DY% p.a.)*100
FV = FVPE x TTM OR better future expected EPS (if you have)

Example : Stock A, you expect it to have growth of 10% p.a. and currently yield 3%. You expect FY14 EPS to be 20 cents/share

FVPE =(10%+3%)*100 = 13
FV = 0.20 x 13 = RM 2.6

Please note this is just the fast method, if it looks interesting to you, you NEED to investigate further on the free cash flow, net cash/debt, profit margin, growth sustainability, RNAV, DCF, management etc etc...

There is NO sure way of calculating FV one... if you put super high growth expectations, everything will also look very cheap, so be very very conservative.

Again I repeat, getting FV is an ART not a calculable SCIENCE because the market, company and profits change all the time... and more often than not you will wrong MOST of the time.

This post has been edited by gark: Apr 16 2014, 10:52 AM

Nope dont believe in excel and all those formula.. evaluating Fv is like evaluating fine wine.. via taste, smell and experience.

This post has been edited by gark: Apr 16 2014, 10:48 AM

Tq tq, ... jot down already.

What is TTM?



This post has been edited by lambethwalk: Apr 16 2014, 10:56 AM

TTM = tentative twelve month OR past 4Q earning combined

I have edited my original post sometimes it is better to use next FY expected EPS for calculation if you can reliably predict one. I use TTM and FY14 EPS interchangeable depends on stock.

This post has been edited by gark: Apr 16 2014, 10:55 AM

Homer climb like snail everyday

Today lag behind latitude

Coma jor lah.. no need everyday see...

Okay...

And how do you calculate/estimate future growth percentage? hehe my last question

But one thing I have to add....whenever calculate Intrinsic value, the most important part is understand the business enough 1st before you can do so. So you can have the confidence to believe your IV.

Just my opinion

There are few methods...

For constant growth and stable growth company.. you can use the average of 5 or 10 years CAGR (Compounded annual growth rate)

For high growth companies, well, you just gotta read more and get a feel on the industry and where it is headed... this one is the most difficult, you need in depth understanding on the industry

For negative/unstable/yo-yo growth companies, don't bother - run far far away...