Watchlist

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7 responses to “Watchlist”

  1. Luis Iglesias says:

    Hello, Would like to know how do you calculate the fair value? thank you

    • Martin says:

      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.

      • Luis Iglesias says:

        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?

      • Luis Iglesias says:

        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?

        • Martin says:

          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.

          • Luis Simon says:

            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

            • Martin says:

              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.

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