Bank valuations can be analyzed using price to tangible book value, price to earnings, and discounting dividends and buybacks to calculate intrinsic value.
Investing In Real Estate Investment Trusts (REITs)
I firmly believe every investor should maintain some exposure to REITs within their portfolio. Both young investors and even grizzled veterans.
Calculate the Change in Working Capital and Free Cash Flow
Today is the day the dust on the topic of changes in working capital finally settles.
Read this page slowly, and download the worksheet to take with you because the whole topic of changes in working capital is very confusing. Spreadsheet includes examples, calculations and the full article.
It’s taken a lot of thought over many years to fully understand this idea of what the “change” in changes in working capital actually means and how it should be applied to valuation and financial analysis.
Margin of Safety Saves the Day in a DCF Valuation of Harley-Davidson
I recently stumbled across an old discounted cash flow (DCF) model from mid-2006 that I built for Harley-Davidson (HOG, formerly HDI) […]
How to Value Stocks Using Absolute PE Model
What You Will Learn
– How to Value Stock Like a PRO Using the Absolute PE Model
– How to Apply the Core Principles of the PE Model and Stop Relying on Relative Valuations
– What are the Advantages and Disadvantages of the PE Model and Why You should Know it
The C-Score: How to Find Short Candidates
What You’ll Learn
– What is the C-Score and does it work?
– Who is cooking the books?
– How is the C-Score computed
In good times, few focus on such ‘mundane’ issues as earnings quality and footnotes. However, this lack of attention to ‘detail’ tends to come back and bite investors during bad times…
Altman Z Score as Bankruptcy and Quality Check
The Altman Z score is useless.
It’s outdated.
It no longer works.
That’s what these reports argue. They say that the Altman Z Score is dead and here is an honest limitation of the model.
And another really good pdf report on why the Altman Z model does not work for turnaround companies. Really?
7 Cash Flow Ratios Every Value Investor Should Know
When it comes to doing a liquidity or solvency analysis, using the cash flow statement and cash flow ratios is a much better indicator than using the balance sheet or income statement ratios.
Gross margins are important but it doesn’t tell you whether a company can survive or not.
The PE isn’t much help too.
Unfortunately, cash flow statement analysis gets pushed down to the bottom of the to do pile, but not here. Read on.
Does it Pass the Sniff Test?
A quick way is to first eliminate a lot of the junk out there with a sniff test.
A sniff test is the same as a simple checklist.
The purpose is to build guardrails so that you don’t step into dangerous territory.
It doesn’t work out as well because value investors get attracted to cheap stuff and growth investors get attracted to charismatic managers and glamour stories.
Benjamin Graham Formula & Stock Valuation
Learn how to value stocks using a simple formula created by Ben Graham. A quick way to estimate the range of a stock for value investors using growth numbers. Download the companion Graham formula spreadsheet.
