Calculating Intrinsic Value of a share

It could be argued that there is no way of assessing the true value of a share at any given point in time.

The standard blurb on how to value an asset is ” the sum of all the future cashflows that can be produced, or taken out of the asset during its lifetime”. You’ve probably heard about discounted cash flows, where future cash flows are estimated and then discounted back at a given discount rate to give its present value. Read more of this post

Blue Chips by name, not by nature

The following stocks are classified as being in the Top 100 stocks by the Australian Stock Exchange (ASX). Many financial planners have in the past and will be urging their clients to invest in these companies. I’ll be avoiding these companies, unless their performance improves dramatically. None of these stocks will be ten-baggers (i.e. stock price climbs to 10 times the current price). While the share price of these companies may rise, eventually prices track performance, and these companies have not performed brilliantly in the past. Read more of this post

How I rate a company – part 3

In part 1 I listed my 12 financial criteria for ranking a companies historical financial performance. In part 2 I discussed the criteria and what Im looking for. This blog, the 3rd and last in the series, looks at the companies that rated greater than 9 / 10 against the criteria. I’ve also listed several companies with the lowest scores.

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How I rate a company – Part 2

In part 1 , I listed 12 criteria I use to rank all the companies I analyse, based on their historical performance. In this post, I’ll discuss each of the points and why I see them as important.

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How I rate a company – Part 1

After analysing approximately 100 listed companies, I wanted to find an easy way of giving the company a score based on their historical financial performance. I came up with a list of 12 financial hurdles. Companies get a score out of 10 for each criteria, which I then add up and divide by 12 to give a score out of 10. Guess what? Not one company I’ve analysed managed to score a 10 /10.

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