Watchlist
Here is an updated Watchlist of stocks I am interested in and their valuations. Along with my cash management and rules, I will be investing in these shares if they show to be undervalued and the market is in Fair or Oversold territory. I may also use options to buy shares at discount to get my cost basis closer to the fair value.
Hello, Would like to know how do you calculate the fair value? thank you
I use the Graham Dodd formula {V= EPS x (8.5+2g)}and P/E multiple to calculate the company\’s growth. Then when a stock trades below the calculated value, I consider it undervalued.
thank you for that information, I was actually working with Peter Lynch formula for PGE Over or bellow 1 and Yahoo financial gives this data in Statistic section of the ticker, but it has different result than Graham formula, in relation to be under or overvalued.
PE multiple is Current stock price/ EPS (year) right?
thank you for that information, I was actually working with Peter Lynch formula for PGE Over or bellow 1 and Yahoo financial gives this data in Statistic section of the ticker, but it has different result than Graham formula, in relation to be under or overvalued.
PE multiple is Current stock price/ EPS (year) right?
Yes.
The reason for the different results between Yahoo and my calculations is also that Yahoo uses GAAP data. I use adjusted operating earnings while Yahoo uses diluted earnings (GAAP). I also cap PE at 15 if the calculations end up with higher PE.
Adjusted operating earnings? where you obtain this data? in nasdaq.com, cnbc, or other?
Could you please explain a little bit about cap PE at 15 if higher PE calculated?
thank you very much
It is any non-GAAP reporting. Nasdaq provides them, Zach provides it or you can take it directly from the company\’s financial reports. They usually report both, diluted and adjusted.