..........intrinsic Value Of A Stock.........

sureshinfy · #31 25th August 2007, 12:09 PM

Dear Jatayoo,

If you have finished the calculation of intrinsic value of Infosys stock, please share with me.

Best Regards
Suresh

jovial01 · #32 4th November 2007, 09:52 AM

Hi Jatayoo.I tried applying the formula which u have mentioned for INFOSYS..Right now Infosys is trading at Rs1917.15...EPS of 73.65..CAGR of 43%..Now applying to the formula..
Intrinsic value = 73.65*(8.5 + 2*43)=6959.925.
Wut do u comment.?

jatayoo · #33 18th February 2008, 11:44 AM

HI
SURPRISE SURPRISE..... NO COMMENT SINCE THE LAST POST ON A VERY basic issue that concers everyone.

NOW Dear's we are approaching the times when everything will not go up up up.
It is Time to think abt INTRINSIC VALUE.
pL READ THE POSTS ABOVE AND LET US discuss.
I'll give you a hint....."Intrinsic value is not something that can be defined by a mathematical formula.It is certainly not DCF that is determined by how one see's the 'TERMINAL GROWTH RATE'...[b] A ONE PERCENT DIFFERENCE IN THIS TERMINAL RATE MAKES A HUGE DIFFERENCE
So what is this "INTRINSIC VALUE " ALL ABT???

oxusmorouz · #34 18th February 2008, 01:00 PM

Quote:

Originally Posted by jatayoo

So what is this "INTRINSIC VALUE " ALL ABT???

Difficult question. I've come up with a few possible (probably exhaustive) answers:

On a large scale:
1) An excuse for buying badly beaten down stocks and still losing money.
2) An excuse for selling stocks too early, only to see up run up a few hundred percentage more.
3) A mythical value to substantiate our random stock picks, thus making our random stock picks more intellectual than the other guy's random stock picks.

On a small scale:
Discounted value of future cash flows accruing to investors. A value which the stock is supposed to be quoting (and currently worth) in the long run, when everyone is dead, after making a few million assumptions.

sudoku1 · #35 18th February 2008, 04:15 PM

The actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value. Value investors use a variety of analytical techniques in order to estimate the intrinsic value of securities in hopes of finding investments where the true value of the investment exceeds its current market value..............

For example, value investors that follow fundamental analysis look at both qualitative (business model, governance, target market factors etc.) and quantitative (ratios, financial statement analysis, etc.) aspects of a business to see if the business is currently out of favor with the market and is really worth much more than its current valuation.......

but in the end.....mkts remain more irrational than one can remain solvent.........so goes the saying.....

oxusmorouz · #36 18th February 2008, 04:23 PM

Quote:

Originally Posted by sudoku1

The actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value. Value investors use a variety of analytical techniques in order to estimate the intrinsic value of securities in hopes of finding investments where the true value of the investment exceeds its current market value..............

For example, value investors that follow fundamental analysis look at both qualitative (business model, governance, target market factors etc.) and quantitative (ratios, financial statement analysis, etc.) aspects of a business to see if the business is currently out of favor with the market and is really worth much more than its current valuation.......

but in the end.....mkts remain more irrational than one can remain solvent.........so goes the saying.....

http://www.investopedia.com/terms/i/intrinsicvalue.asp

Quoting the source should not hurt...or should it?

In fact, it's the first link in Google when you type "intrinsic value". This is getting more hilarious than I suspected

What point did you try to prove?

DWeeP · #37 4th March 2008, 07:46 PM

Intrinsic value is like the goal of life of a stock. Whenever it goes far away from this value, it tries to return to it.

It goes far away because of news, and lots of other things, but the ultimate goal is intrinsic value!

jatayoo · #38 4th March 2008, 10:52 PM

hi
For quite sometime , say 7 to 8 yrs , i have googled and read and thaught over the matter.
The Balance sheet value is easy to ascertain and the return ratios as well.
The problem is that they do not have any room for the "imbeded value" at all.
Value Investing is not about finding the beaten down stocks.It ia about Great Companies at "Reasonable Prices"
We talk of "earning power" of a company....is it just groweth of EPS.This EPS can grow by simply the co buying back it's shares...TRUE??...Equity base expands and the EPS falls....TRUE?
SO EPS is not a way to assess the "earning power"
QUESTIONS QUESTIONS QUESTIONS......

Quoting the source should not hurt...or should it?

In fact, it's the first link in Google when you type "intrinsic value". This is getting more hilarious than I suspected

What point did you try to prove?

[/quote]

oxusmorouz · #39 5th March 2008, 07:20 AM

Quote:

Originally Posted by jatayoo

hi
For quite sometime , say 7 to 8 yrs , i have googled and read and thaught over the matter.
Quoting the source should not hurt...or should it?

In fact, it's the first link in Google when you type "intrinsic value". This is getting more hilarious than I suspected

What point did you try to prove?

[/quote]

Hello,
That was intended for Mr.Sudoku, not for you Jatayoo.

Regards.

WBfan · #40 6th July 2008, 02:16 PM

Hello everyone!

I have read "The Warren Buffett Way" by "Robert Hagstrom". In the book there is a chapter where they (I guess Robert) try to recapture how Warren Buffett thought when he bought huge amounts of shares in CocaCola, in 1998, using Buffetts prefered way of calculating a company´s intrinsic value. In the book they are displaying a table that shows how the calculation is made. The header says "The Coca Cola Company Discounted Owner Earnings Using a Two-Stage Dividend Discount Model". I have tried to figure out the logic of this model but I have failed in one respect. First they calculate the intrinsic value based on the proposed future earnings of the ntext ten years, using the "Discounted cash flow" model. Fine. Next they use the "Gordon Model" to calculate the intrinsic value over the rest of the companys life time and discount it back to today. Fine. Then they add up the two numbers they get for each calculation and says that this is the intrinsic value for Coca Cola in 1988. Also fine. What I don´t understand is why the accumulated owner earnings up until 1998 is not included (should be a considerable amount?!). Now, I don´t know if any of you have read the book, but maybe someone can follow the logic (or the lack thereoff) and see what I am missing??

Thanks in advance.

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