Return on Equity (ROE) – Understanding & Interpretation of The Ratio

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What is Return on Equity (ROE)? It is a financial ratio that is calculated by dividing net profit (PAT) by the total shareholder’s funds (Net Worth – NW) of a company. ROE is the measure of the company’s efficiency that highlights how well the company is using shareholder’s capital to yield net profits. Suppose there […]

Absolute PE Method: How to estimate intrinsic value using this method?

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In this method, we first estimate the ‘absolute PE’ of a stock. Then multiply the calculated PE with EPS. This will give us the fair price or intrinsic value of the stock. We will read about this in more detail. What is the PE formula? Conventional PE = Market Price / EPS. The same formula we […]

PEG Ratio: A Combination of PE & PEG To Value Indian Stocks

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PEG ratio is a useful valuation metric for stock investors. Potential investors can use it to gauge if a stock is overvalued or undervalued. PEG is a ratio which establishes a correlation between company’s price valuation with its future growth prospects (see here). We are more conversant with the use of P/E ratio (Price to Earnings […]

How Value Investor Screen Stocks?

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What expert value investors does best is estimation of intrinsic value of stocks. But there are 5,000+ stocks in market. They calculate intrinsic value of all stocks? No. This exercise will be too futile. They first shortlist good stocks. How they shortlist their stocks? They use a suitable stock screener. When we invest in stocks, focus should be on long term […]

Earning Power Value (EPV) Method of Stock Valuation

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Earning Power Value (EPV) method of stock valuation was developed by Bruce Greenwald. At the outset EPV may give an impression that it uses a too simplistic approach to value stocks. But when I went into its calculations, its phenomenally detailed and good. I was really impressed with the person who developed such a concept. Who is […]

How to Evaluate a Stock Price? (Part 4)

How to evaluate a stock price - LandingPage

How to evaluate a stock price? Is the process of evaluation easy or difficult? How long does it take to evaluate stocks? Is it really possible to arrive at some meaningful conclusion upon stock evaluation? These are few common queries that we have, related to stock analysis. Let me give you a quick answer first. […]

How to Record Balance Sheet Transactions: Examples

Every balance sheet transactions recorded by the company, alters its Balance sheet. For investors, it is interesting to understand balance sheet transactions of companies. Though the understanding of balance sheet transactions is not essential, but its knowledge helps. It will greatly help value investors to read and interpret companies financial reports. When I started learning about balance sheet […]

Analysis of Lupin Share Price – Must Watch

Lupin Limited (BSE:500257) is an Indian Pharma stock. In terms of Market Cap, Lupin Ltd is the 5th largest stock after Sun Pharma, Cadila, Cipla and Piramal. Lupin Limited is also among the Top 100 stocks of Indian stock market in terms of Market Capitalization. Lupin currently ranks as high as 64 in list of […]

How Enterprise Value Is Different From Market Capitalisation?

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What is Enterprise Value for Private Company and how investors use it for their purpose? Enterprise value calculation is one of the ways to value a company. People often ponder about how to value a company. Enterprise value provides quick answer. Calculating enterprise value is easy. Value of market capitalisation is easily available online. We […]

About Book Value of Shares: How to Use it for Stock Investing?

Book Value - Forecasting BVPS Growth

Book value of shares gives us a ‘rough idea’ about the stock’s ‘true value‘ (Book value & other details of top Indian stocks). What is true value? True value is that price of a stock, which an investor must pay to buy it. But why book value gives only a rough idea? Because it considers […]