Let me go through a EBIT multiple valuation method using DELL. Plus get the link to the free online calculator at the end of the article.
Stock Valuation Method for Dividend Stocks
Written by Jae Jun follow me on Facebook Twitter Read Past Posts from this Series Before you dive into the […]
How to Use the Sloan Ratio to Beat the Market
The Sloan ratio will help you analyze accruals so you can pick winners. This formula has been proven to show that companies with low accrual ratios outperform companies with high accrual ratios. Read on to learn more about it.
Using the O-Metrix Score to Find Cheap Stocks with High Potential
Written by Jae Jun follow me on Facebook Twitter I get a good stream of comments and requests by current […]
5 Rockin’ Investing Ratios and Why I Like It
Written by Jae Jun follow me on Facebook Twitter Here are the investing ratios, in no particular order, that I […]
Could You Have Predicted Diamond Foods Accounting Fraud?
Diamond Foods (DMND) is being investigated by the SEC and DoJ for potential accounting fraud. I will go through a few methods to detect earnings quality, manipulation and aggressive accounting to see how well it comes up against DMND. So as we go through this, the question is, could you have identified DMND’s accounting shenanigans in advance by using such methods?
How to Check a Company’s Financial Accruals in 5 Minutes
Companies with low balance sheet accruals out performed companies with high balance sheet accruals by 8-10%. Majority of my focus has been on cash flow where there is less room for accounting manipulation because in the real world, we pay cash for something and receive cash for products or services rendered. Accrual accounting attempts to fix such issues by matching costs with related revenues but he problem is that this method introduces subjective judgments and assumptions. Here are some other quick observations regarding accrual accounting you need to understand.
3 Ways You can Find Out Market Expectations of a Stock
I’ve recently been putting more weight to the question of “What are the expectations for this stock?”.
Rather than purely concentrating on a bottom up approach where I value the assets, cash flow and growth to come up with a range of intrinsic values, questioning what the markets expects out of the stock adds another dimension to the valuation process.
Calculating Accrual Earnings Quality
Next time you are looking at a stock then be sure to incorporate these ratios into your analysis. Doing so may just prevent you from being caught on your heels the next time a company admits to having some skeletons in its closet.
Hopefully, you will have seen the signs and exited sooner than the general public.
How to Perform an Asset Reproduction Value Analysis
First step in a Graham and Dodd valuation is to calculate the asset value of a company. Rather than making this the first and only step, you need to go further to check the reliability of the data and strategic direction of the company and industry to determine what the actual cost of the balance sheet really is.
