Tagged: Intrinsic value
- Jeyanth NewbieOctober 19, 2018 at 2:57 amPost count: 2
Hi Preston & Stig,
Thank you for the amazing free course, you have explained the topics in a very lucid manner.
I have presently just finished the Course 2-Unit 3-Lesson 5 and have a clarification on how the intrinsic value of Disney was arrived at. I am using the same values given in the course and tried to implement it in a spreadsheet and got an value of 40.03. I have explained below as to how I have arrived at the value of 40.03…
Based on current BV of 21.21 and rate of growth of 6.924% per year, the BV after 10 years = 21.21*(1+6.924/100)^10 = 41.4278
Taking a constant dividend of 0.6 per year for next 10 years, total dividend after 10 years= 0.6*10 =6
Total projected earnings after 10 years = 41.4278 + 6 = 47.4278
Considering a discount rate of 1.71 per year, for 10 years the discount factor= 1/(1+1.71/100)^10 = 0.844
Present value of future earning = 0.844 * 47.4278 = 40.03
Using the calculator in the buffetbooks, the intrinsic value arrived is 40.439
Am I missing something in the calculation? can you please help me to understand.
JeyanthStig Brodersen AdministratorOctober 22, 2018 at 1:48 amPost count: 216
Thank you for the support!
This is a thread for The Intrinsic Value Course: https://www.theinvestorspodcast.com/product/intrinsic-value-course/
Please post your question in one of the other topics or better yet create a new. The TIP community will get back to you.
Price is what you pay. Value is what you get. - Warren BuffettEuclid O NewbieOctober 22, 2018 at 8:44 amPost count: 1
I’m Euclid from the Philippines and is currently studying the lessons from your website. In the intrinsic value calculator, you are using the 10 year federal note for the discount rate. Is this applicable to all currencies or market like here in the Philippines? If not, what variable should I look for? Thank you.
EuclidStig Brodersen AdministratorOctober 24, 2018 at 5:39 amPost count: 216
Yes, it is applicable.
Please note that this is the thread for The Intrinsic Value Course: https://www.theinvestorspodcast.com/product/intrinsic-value-course/
But please feel free to post it anywhere else on the forum. Welcome!
Price is what you pay. Value is what you get. - Warren BuffettJohn J NewbieOctober 26, 2018 at 4:48 pmPost count: 2
Module 2 of the Intrinsic Value course gets confusing for me. Especially IRR.
Is there a way to overall summarize each video below with texts/bullet notes, the way it’s done for the Intelligent Investor course – as an extra way of simplifying/reinforcing concepts?Noah B NewbieOctober 26, 2018 at 5:45 pmPost count: 2
I recently evaluated stock “BBSI” using the intrinsic value calculator provided to the students who paid for the course. That calculator told me I will make 26% IRR using future free cash flow data. I then used the free intrinsic calculator on buffetsbooks.com and it told me the fair value of the share is 20.92. The current value of BBSI is $60.75. How come one calculator tells me my IRR is 26% but the other calculator is telling me the current stock price is overvalued? Sorry if the question sounds confusing. I’m just trying to practice researching stocks that have a low TIP value. This value is 0.87. Thank you!Stig Brodersen AdministratorOctober 27, 2018 at 1:14 amPost count: 216
Thank you for the feedback!
Your question is not confusing at all.
Did you use the same assumptions?
Price is what you pay. Value is what you get. - Warren BuffettNoah B NewbieOctober 28, 2018 at 6:34 pmPost count: 2
Nevermind I figured it out I needed to find out the NPV of the stock using the future cash flow for the next 10 years and dividing that number by the shares outstanding. That gave me the intrinsic value of 1 share of email@example.com MemberOctober 28, 2018 at 8:17 pmPost count: 10
Thank you for all your help.
I have another question.
I have tried finding information of the economic moat in the annual reports of various companies. Sometimes, I find it difficult to find the information of the economic moat in the annual reports of various companies.
Can you please tell me other sources or websites, where there is relevant information of the economic moat of various companies?
NeelStig Brodersen AdministratorOctober 31, 2018 at 1:59 pmPost count: 216
That is such a great and also difficult question to respond to. It’s not quantifiable which makes it that much harder to work with. I don’t have a good resource other than the financial reports and even more important speak to the people (scuttlebutt) who knows about the industry.
Another option is to read analyst’s reports to learn more about the qualitative factors, and then take it from there. I would not trust the analysts too much, but they might say that “these three factors are important” in industry X.
Price is what you pay. Value is what you get. - Warren BuffettLucas S NewbieNovember 1, 2018 at 4:24 pmPost count: 1
Crazy question, but I was wondering what calculation you used to figure the Average Book Value Change (ABVC). I went to create a spreadsheet that I could access anytime but was unable to recreate your percentages in the ABVC. So my understanding on how to get average percent over a certain period of time is this. Take the Current Book Value (CBV) minus the Old Book Value (OBV) and divide this by the OBV then multiply by 100 . This will give you the average percent change in that time period. You should do that for each period (one year in this case) then add those periods together and decide by the number of years.
I have used this calculation but I have not come up with your (ABVC).
Thank you for your firstname.lastname@example.org MemberNovember 1, 2018 at 6:11 pmPost count: 10
Thank Stig, for your help.
Neelbrandon s NewbieNovember 6, 2018 at 12:52 amPost count: 1
im trying to use the msn money page to look into the history, it seems to have changed since the intrinsic value lesson was filmed. Is there a site thats good for finding the 10 year history of EPS and book value? the msn money page now seems much less in depthArnon B NewbieNovember 7, 2018 at 3:03 amPost count: 1
I want to start practice and to try to calculate the intrinsic value of some companies. I’m using Yahoo Finance and I can’t get the 10-y information- EPS, Book Value and Dividends.
What source can I use to find this information?
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