learning value investing

[sbali1976]

How to calculate intrinsic value?

 

[Somatung]

How to calculate intrinsic value?

Are you able to do "Copy Past"? Means first you copy and then you past the text into what ever.

Now did you ever hear about "Google" or any other kind of "Search engine" or are you really as what you show off here or just a lazy kid

https://ixquick.com/do/search

https://www.google.ch/?gfe_rd=cr&ei=r57YVdPvCarC8gfx_JnwDw

 

[muthutrader]

How to calculate intrinsic value?

easy read books

The Warren Buffett Way
WARREN BUFFETT AND THE INTERPRETATION OF FINANCIAL STATEMENTS

 

[rh6996]

Stock-Federal Bank
Market Cap:11,590.84 Cr

EPS
Mar 05	Mar 06	Mar 07	Mar 08	Mar 09	Mar 10	Mar 11	Mar 12	Mar 13	Mar 14	
2.75	5.26	6.84	4.30	5.85	5.43	6.86	9.08	9.80	9.81

Book Value
Mar 05	Mar 06	Mar 07	Mar 08	Mar 09	Mar 10	Mar 11	Mar 12	Mar 13	Mar 14	
 21.8	29.03	34.94	45.8	50.4	54.6	58.73	66.72	74.4	81.26	

ROE
Mar 05	Mar 06	Mar 07	Mar 08	Mar 09	Mar 10	Mar 11	Mar 12	Mar 13	Mar 14	
12.57	22.99	19.57 	9.39 	11.58 	9.91	11.49   13.61   13.16 	12.06 	

Net profit(Cr)	
Mar 05	Mar 06	Mar 07	Mar 08	Mar 09	Mar 10	Mar 11	Mar 12	Mar 13	Mar 14	
90.09	225.21	292.73	368.05	500.49	464.55	587.08	776.80	838.17	838.89

EPS AV growth-15.17%
BV AV growth -15.74%

Y2014-
Gross NPA -1,087.41(cr)
Net NPA -321.56(cr)

Gross NPA%-2.46%
Net NPA%-0.74%

as far as my valuation, the intrinsic value of the stock is around 120 to 150,now trading at -67.50
friends i am learning value investing,share you are view on this stock,it will be so helpful for learns like me and others,

thanks

Is the intrinsic value dependent on Market Cap?
The Federal Bank Market Cap value posted by you does not match. Can you kindly check it again please.

 

[sbali1976]

Are you able to do "Copy Past"? Means first you copy and then you past the text into what ever.

Now did you ever hear about "Google" or any other kind of "Search engine" or are you really as what you show off here or just a lazy kid

https://ixquick.com/do/search

https://www.google.ch/?gfe_rd=cr&ei=r57YVdPvCarC8gfx_JnwDw

I did not want what google or any search engine is telling me about the Intrinsic Value, there are estimations involved in it to calculate Intrinsic Value. I asked how these estimations have been incorporated by 'muthutrader' in his calculations to arrive at intrinsic value. Thanks !

 

[muthutrader]

simple way to calculate Intrinsic Value,

take past 3 years AV eps
EX
Stock-RATNAMANI

Mar 12	Mar 13	Mar 14	
24.02	29.30	30.58

3year AVG EPS-27.96

then, the business going to earn only 27.96rs for the next coming 10years and no growth,
then the value fo the stock is 27.96*10=279.6

the Intrinsic Value of the stock-279.6rs

say the business have growth 9% per year

then give 9% G ot the stock for next coming 10 years

eps	 27.96 		
g	9%		
year		2015	30.48
		2016	33.22
		2017	36.21
		2018	39.47
		2019	43.02
		2020	46.89
		2021	51.11
		2022	55.71
		2023	60.73
		2024	66.19
			
total value		463.03

if the earnings grow at 9% per year ,then the value is-463.03

note
this valuvation only work on stable bissness,it will not work at unstable bissness,to know the
stability,take past 10 years of EPS and see how the growth and performs

EX
business  A            

2005	2006	2007	2008	2009	2010	2011	2012	2013	2014

5	6	6.5	7	8	8.2	9.5	10.1	12	14.5


business B          

2005	2006	2007	2008	2009	2010	2011	2012	2013	2014

10	2	-3	15	2	5	-3	15	2	1

see the bis A earnings, nice growth and stable, easy to value,
but the B no stable earnings, and hard to value

 

[muthutrader]

some example

 

[muthutrader]

some example

 

[sbali1976]

What is the role of discounting factor ?

In the case of Ratnamani, this is the futuristic value after 10 years but we making investment today, we need present value (pv) of the future EPS.

Is my understanding correct? If yes, then what discount rate to be used?

Thanks !

 

[muthutrader]

What is the role of discounting factor ?

In the case of Ratnamani, this is the futuristic value after 10 years but we making investment today, we need present value (pv) of the future EPS.

Is my understanding correct? If yes, then what discount rate to be used?

Thanks !

discount rate change bissness to bissness (risk free 10 year bond yield is-7.78)
ex
like MRF,TCS,AXIS,YESBANK,HDFC all of them are best bissness, and less risk

Ratnamani,fed bank, moil are good bissness, but some risk,

for MRF,TCS one can use discount rate -7.78 to 10 (risk free 10 year bond yield is-7.78)

for ratnamani,fed bank one can use discount rate -1.1/2 time or 2 time of bond yield

discount rate-11.67 or 15.56

or simply use 10


http://as.wiley.com/WileyCDA/Section/id-817927.html