{"id":123,"date":"2007-06-22T16:43:28","date_gmt":"2007-06-22T21:43:28","guid":{"rendered":"http:\/\/club.ino.com\/trading\/2007\/06\/22\/do-you-know-the-intrinsical-value-of-your-stocks\/"},"modified":"2019-08-21T13:43:39","modified_gmt":"2019-08-21T17:43:39","slug":"do-you-know-the-intrinsic-value-of-your-stocks","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2007\/06\/do-you-know-the-intrinsic-value-of-your-stocks\/","title":{"rendered":"Do You Know The INTRINSIC Value of Your Stocks?"},"content":{"rendered":"<p><a href=\"http:\/\/www.thefinancialwhiz.com\/?marketclub\"><img loading=\"lazy\" decoding=\"async\" src=\"\/uploads\/Image\/Lindsay\/Fianancial%20Whiz.gif\" alt=\"\" width=\"600\" height=\"257\" \/><\/a><\/p>\n<div><span style=\"font-size: small;\">I was searching around the net for a morning read and a ran into <a href=\"http:\/\/www.thefinancialwhiz.com\">The Financial Whiz<\/a>. Like a regular blog user I first went to the WHO section. I like to feel like I can connect with the writer. Well to my surprise the blog, spreadsheets and articles were produced by a senior Finance Major at <a href=\"http:\/\/www.iup.edu\">Indiana University of Pennsylvania<\/a>, Bryan. This young guy already has seven years of trading under his belt, with knowledge in stocks, fixed income instruments, options and forex.  Below is a post he made on June 9th and I thought that this may be of interested to MarketClub members and guests. Visit his blog by clicking on the logo above this paragraph. <\/span><\/div>\n<p><img decoding=\"async\" src=\"file:\/\/\/C:\/DOCUME%7E1\/Owner\/LOCALS%7E1\/Temp\/moz-screenshot-113.jpg\" alt=\"\" \/><\/p>\n<p class=\"MsoNormal\">[Courtesy of The Financial Whiz . com...]<\/p>\n<p class=\"MsoNormal\"><img decoding=\"async\" src=\"file:\/\/\/C:\/DOCUME%7E1\/Owner\/LOCALS%7E1\/Temp\/moz-screenshot-111.jpg\" alt=\"\" \/><\/p>\n<p class=\"MsoNormal\"><img decoding=\"async\" src=\"file:\/\/\/C:\/DOCUME%7E1\/Owner\/LOCALS%7E1\/Temp\/moz-screenshot-112.jpg\" alt=\"\" \/><\/p>\n<p class=\"MsoNormal\">One of the approaches that the <a href=\"http:\/\/www.iupsmip.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Indiana University of Pennsylvania Student Managed Investment Portfolio<\/a> utilizes to value companies is known as the <em>Comparable Ratio Valuation<\/em>. This method uses a spreadsheet that I developed last year in allowing a potential investment to be compared against its closet competitors to find a company\u2019s \u201cintrinsic value.\u201d While this approach may ignore fundamental flaws in a company\u2019s business model, it gives an investor a good base to start analyzing potential stocks to invest in.<\/p>\n<p>To download a copy of the valuation spreadsheet model, please visit: <a href=\"http:\/\/www.iupsmip.com\/component\/option,com_remository\/Itemid,36\/func,startdown\/id,100\/\" target=\"_blank\" rel=\"noopener noreferrer\">http:\/\/www.iupsmip.com\/component\/<br \/>\noption,com_remository\/Itemid,36\/func,startdown\/id,100\/<\/a><\/p>\n<p>In the above spreadsheet example, an analysis of Amgen (AMGN) was done and the spreadsheet ultimately found the company to be trading at a discount of about 19% to its peers.<\/p>\n<p class=\"MsoNormal\">This spreadsheet is not the only determining factor in an investment decision; the sheet is preliminary a tool to analyze and identify stocks that will require more detailed research before a final decision can be made. The twenty minutes that it takes to input the numbers into the spreadsheet will save you roughly two hours or more compiling due diligence. In a future post, I will present the SMIP\u2019s fundamental analysis worksheet that must be completed prior to the company being presented to the team.<\/p>\n<p>At first, the spreadsheet is somewhat difficult to maneuver, but I will guide you through the process.<\/p>\n<p>The areas highlighted in green are areas that will require you to input information to be used in compiling the intrinsic value of the company.<\/p>\n<p><strong>Company Inputs Section:<\/strong><\/p>\n<p>The data to be used here can be found at the links provided, but when analyzing a different company, please replace the ticker symbol with that of your company.<\/p>\n<table class=\"MsoTableGrid\" style=\"border: medium none; border-collapse: collapse; height: 653px;\" border=\"1\" cellspacing=\"0\" cellpadding=\"0\" width=\"366\">\n<tbody>\n<tr>\n<td style=\"border: 1pt solid windowtext; padding: 0in 5.4pt; width: 139px;\" valign=\"top\">\n<p class=\"MsoNormal\" style=\"text-align: center;\" align=\"center\"><strong>Item<\/strong><\/p>\n<\/td>\n<td style=\"border-style: solid solid solid none; border-color: windowtext windowtext windowtext -moz-use-text-color; border-width: 1pt 1pt 1pt medium; padding: 0in 5.4pt; width: 252px;\" valign=\"top\">\n<p class=\"MsoNormal\" style=\"text-align: center;\" align=\"center\"><strong>Can Be Found at<\/strong><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 139px;\" valign=\"top\">\n<p class=\"MsoNormal\">Price Per Share:<br \/>\n$56.94<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 252px;\" valign=\"top\">\n<p class=\"MsoNormal\"><a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finance.yahoo.com\/q?s=AMGN\" target=\"_blank\">http:\/\/finance.yahoo.com\/q?s=<br \/>\nAMGN<\/a><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 139px;\" valign=\"top\">\n<p class=\"MsoNormal\">EPS (Earnings Per Share): $4.41<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 252px;\" valign=\"top\">\n<p class=\"MsoNormal\"><a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finance.yahoo.com\/q\/ae?s=AMGN\" target=\"_blank\">http:\/\/finance.yahoo.com\/q\/ae?s=<br \/>\nAMGN<\/a> under the Earnings Est section, I tend to use the Next Year Average Earnings Estimate<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 139px;\" valign=\"top\">\n<p class=\"MsoNormal\">Growth Rate:<br \/>\n11.2%<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 252px;\" valign=\"top\">\n<p class=\"MsoNormal\">the bottom of the page of the following link <a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finance.yahoo.com\/q\/ae?s=AMGN\" target=\"_blank\">http:\/\/finance.yahoo.com\/q\/ae?s=<br \/>\nAMGN<\/a> under the Growth Est, in this figure I tend to use the next 5 years prediction.<\/p>\n<p class=\"MsoNormal\">\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 139px;\" valign=\"top\">\n<p class=\"MsoNormal\">Market Cap:<br \/>\n$66,030.0<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 252px;\" valign=\"top\">\n<p class=\"MsoNormal\"><a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finance.yahoo.com\/q?s=AMGN\" target=\"_blank\">http:\/\/finance.yahoo.com\/q?s=<br \/>\nAMGN<\/a>, where the figure is $66.03 Billion, which the figure that should be used in the spreadsheet should be in millions, therefore, billions would appear in thousands. If a company had a market cap of $500 million, it should be inputted as 500.00 into the spreadsheet.<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 139px;\" valign=\"top\">\n<p class=\"MsoNormal\">Sales:<br \/>\n$14,740.00<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 252px;\" valign=\"top\">\n<p class=\"MsoNormal\">the Key Statistics in the Income Statement section at <a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finance.yahoo.com\/q\/ks?s=AMGN\" target=\"_blank\">http:\/\/finance.yahoo.com\/q\/<br \/>\nks?s=AMGN<\/a> under Revenue (ttm). This number should be listed in the spreadsheet in millions.<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 139px;\" valign=\"top\">\n<p class=\"MsoNormal\">Book Value<br \/>\nper Share: $17.01<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 252px;\" valign=\"top\">\n<p class=\"MsoNormal\">the bottom of the page at <a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d\" href=\"http:\/\/finance.yahoo.com\/q\/ks?s=AMGN\">http:\/\/finance.yahoo.com\/q\/ks?s=<br \/>\nAMGN<\/a> under the Balance Sheet section.<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 139px;\" valign=\"top\">\n<p class=\"MsoNormal\">Cashflow per<br \/>\nShare: $3.49<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 252px;\" valign=\"top\">\n<p class=\"MsoNormal\"><a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finapps.forbes.com\/finapps\/jsp\/finance\/compinfo\/Ratios.jsp?tkr=AMGN\" target=\"_blank\">http:\/\/finapps.forbes.com\/finapps\/<br \/>\njsp\/finance\/compinfo\/Ratios.jsp?<br \/>\ntkr=AMGN<\/a> under the Latest 12 Month<br \/>\nData in the middle of the page, this<br \/>\nis a dollar amount per share.<\/p>\n<p class=\"MsoNormal\">\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 139px;\" valign=\"top\">\n<p class=\"MsoNormal\">Shares Outstanding (mil): 1,160.00<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 252px;\" valign=\"top\">\n<p class=\"MsoNormal\"><a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finance.yahoo.com\/q\/ks?s=AMGN\" target=\"_blank\">http:\/\/finance.yahoo.com\/q\/ks?s=<br \/>\nAMGN<\/a> under the Share Statistics<br \/>\nsection, this number should also be<br \/>\nlisted as in millions.<\/p>\n<p class=\"MsoNormal\">\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 139px;\" valign=\"top\">\n<p class=\"MsoNormal\">EBITDA (mil):<br \/>\n$6,480.00<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 252px;\" valign=\"top\">\n<p class=\"MsoNormal\"><a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finance.yahoo.com\/q\/ks?s=AMGN\" target=\"_blank\">http:\/\/finance.yahoo.com\/q\/ks?s=<br \/>\nAMGN<\/a><strong> <\/strong>under the Income Statement section, this number should be listed in millions.<\/p>\n<p class=\"MsoNormal\">\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 139px;\" valign=\"top\">\n<p class=\"MsoNormal\">Enterprise Value<br \/>\n(mil): $68,610.00<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 252px;\" valign=\"top\">\n<p class=\"MsoNormal\"><a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finance.yahoo.com\/q\/ks?s=AMGN\" target=\"_blank\">http:\/\/finance.yahoo.com\/q\/ks?s=<br \/>\nAMGN<\/a> under Valuation Measures section, this should be listed in millions.<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 139px;\" valign=\"top\">\n<p class=\"MsoNormal\">PEG Ratio: 1.23<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 252px;\" valign=\"top\">\n<p class=\"MsoNormal\"><a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d\" href=\"http:\/\/finance.yahoo.com\/q\/ks?s=AMGN\">http:\/\/finance.yahoo.com\/q\/ks?s=<br \/>\nAMGN<\/a> under Valuation Measures section, this should be listed as is.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p class=\"MsoNormal\"><strong><br \/>\nAMGN Competitors Section:<\/strong><\/p>\n<p class=\"MsoNormal\">To get a good start on which companies to use as your comparable analysis, you should visit <a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finance.yahoo.com\/q\/co?s=AMGN\" target=\"_blank\">http:\/\/finance.yahoo.com\/q\/co?s=AMGN<\/a> and <a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finance.google.com\/finance?q=AMGN\" target=\"_blank\">http:\/\/finance.google.com\/finance?q=AMGN<\/a> and look under the Related Companies section. You want to find a sample of 5-6 related companies to input their valuation ratios to value your company. When selecting companies to use as comparables, you should look for companies that have a market cap above $250 million.<\/p>\n<p>I will give an example of how to collect the information for the first competitor on the list BAX, Baxter International. You will need to collect the following information:<\/p>\n<table class=\"MsoTableGrid\" style=\"border: medium none; border-collapse: collapse; height: 344px;\" border=\"1\" cellspacing=\"0\" cellpadding=\"0\" width=\"315\">\n<tbody>\n<tr>\n<td style=\"border: 1pt solid windowtext; padding: 0in 5.4pt; width: 115px;\" valign=\"top\">\n<p class=\"MsoNormal\" style=\"text-align: center;\" align=\"center\"><strong>Item<\/strong><\/p>\n<\/td>\n<td style=\"border-style: solid solid solid none; border-color: windowtext windowtext windowtext -moz-use-text-color; border-width: 1pt 1pt 1pt medium; padding: 0in 5.4pt; width: 156px;\" valign=\"top\">\n<p class=\"MsoNormal\" style=\"text-align: center;\" align=\"center\"><strong>Can Be Found at<\/strong><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 115px;\" valign=\"top\">\n<p class=\"MsoNormal\">P\/E Ratio: 24.8<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 156px;\" valign=\"top\">\n<p class=\"MsoNormal\"><a href=\"http:\/\/finance.yahoo.com\/q\/ks?s=BAX\">http:\/\/finance.yahoo.com\/q\/ks?s=BAX<\/a> as the Forward P\/E under the Valuation Measures<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 115px;\" valign=\"top\">\n<p class=\"MsoNormal\">PEG Ratio: 1.72<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 156px;\" valign=\"top\">\n<p class=\"MsoNormal\"><a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finance.yahoo.com\/q\/ks?s=BAX\" target=\"_blank\">http:\/\/finance.yahoo.com\/q\/ks?s=BAX<\/a> as the PEG Ratio under Valuation Measures<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 115px;\" valign=\"top\">\n<p class=\"MsoNormal\">P\/S Ratio (Price to Sales): 3.48<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 156px;\" valign=\"top\">\n<p class=\"MsoNormal\"><a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finance.yahoo.com\/q\/ks?s=BAX\" target=\"_blank\">http:\/\/finance.yahoo.com\/q\/ks?s=BAX<\/a> as the Price to Sales Ratio under Valuation Measures<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 115px;\" valign=\"top\">\n<p class=\"MsoNormal\">EV\/EBITDA: 14.32<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 156px;\" valign=\"top\">\n<p class=\"MsoNormal\"><a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finance.yahoo.com\/q\/ks?s=BAX\" target=\"_blank\">http:\/\/finance.yahoo.com\/q\/ks?s=BAX<\/a> as the Enterprise Value\/EBITDA under Valuation Measures<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 115px;\" valign=\"top\">\n<p class=\"MsoNormal\">Price\/<br \/>\nCashflow: 17.7<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 156px;\" valign=\"top\">\n<p class=\"MsoNormal\"><a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finapps.forbes.com\/finapps\/jsp\/finance\/compinfo\/Ratios.jsp?tkr=BAX\" target=\"_blank\">http:\/\/finapps.forbes.com\/finapps\/jsp\/<br \/>\nfinance\/compinfo\/Ratios.jsp?tkr=BAX<\/a> under the Latest 12 Month Data section towards the bottom, this is a ratio and what you are looking for is Price\/Cashflow Ratio<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-style: none solid solid; border-color: -moz-use-text-color; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 115px;\" valign=\"top\">\n<p class=\"MsoNormal\">Price\/Book: 5.6<\/p>\n<\/td>\n<td style=\"border-style: none solid solid none; border-color: -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 156px;\" valign=\"top\">\n<p class=\"MsoNormal\"><a rel=\"\u00e2\u20ac\u009dnofollow\u00e2\u20ac\u009d noopener noreferrer\" href=\"http:\/\/finance.yahoo.com\/q\/ks?s=BAX\" target=\"_blank\">http:\/\/finance.yahoo.com\/q\/ks?s=BAX<\/a> as the Price\/Book Ratio under Valuation Measures<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p class=\"MsoNormal\">\n<p class=\"MsoNormal\">After this step, repeat the above processes for the other 4-5 competitors. If the ratio is not available for a company, just leave that section blank so it will not be used in the valuation calculation. If one company\u2019s ratio is an outlier as compared to the other companies in the spreadsheet, consider leaving that section blank so it will not give an artificially high intrinsic value.<\/p>\n<p class=\"MsoNormal\"><strong>The Intrinsic Price Calculation:<\/strong><\/p>\n<p class=\"MsoNormal\">The spreadsheet then takes the average of the 5-6 competitors\u2019 ratios and then applies those ratios to the information provided about the main company under analysis. It then gives a price of the company for each of the valuation ratios: Price\/Earnings, PEG, Price\/Sales, EV\/EBITDA, Price\/Cashflow, and Price\/Book. All of the prices that are given from those ratios are then averaged together to give the \u201cAverage Intrinsic Price\u201d, which is then compared to the current stock price. Finally, a percentage drawn from these calculations shows if the company is overvalued or undervalued\u2014and by how much it is. If the percentage is positive, then the company is undervalued as compared to its peers, and if the percentage is negative, then the company is overvalued.<\/p>\n<p class=\"MsoNormal\">\n<p>I hope you enjoy as much as I did!<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"\/uploads\/Image\/Lindsay\/lindsay.jpg\" alt=\"\" width=\"60\" height=\"83\" \/><img loading=\"lazy\" decoding=\"async\" src=\"\/uploads\/Image\/Lindsay\/lt%20sig%20red.jpg\" alt=\"\" width=\"100\" height=\"62\" \/><\/p>\n<p>Email me with any ideas, questions, or comments.<\/p>\n<p>Lindsay Bittinger<br \/>\n<span \n                data-original-string=\"x8HAdZg47bTjnJcdJMpdrQ==\"\n                class=\"apbct-email-encoder\"\n                title=\"This contact has been encoded by Anti-Spam by CleanTalk. Click to decode. To finish the decoding make sure that JavaScript is enabled in your browser.\"><br \/>\n        <span class=\"apbct-ee-blur-group\"><br \/>\n            <span class=\"apbct-ee-blur_email-text\">li*****@in*.com<\/span><br \/>\n            <span class=\"apbct-ee-static-blur\"><br \/>\n                <span class=\"apbct-ee-blur apbct-ee-blur_rectangle-init\"><\/span><br \/>\n                <span class=\"apbct-ee-blur apbct-ee-blur_rectangle-soft\"><\/span><br \/>\n                <span class=\"apbct-ee-blur apbct-ee-blur_rectangle-hard\"><\/span><br \/>\n            <\/span><br \/>\n            <span class=\"apbct-ee-animate-blur\"><br \/>\n                <span class=\"apbct-ee-blur apbct-ee-blur_rectangle-init apbct-ee-blur_animate-init\"><\/span><br \/>\n                <span class=\"apbct-ee-blur apbct-ee-blur_rectangle-soft apbct-ee-blur_animate-soft \"><\/span><br \/>\n                <span class=\"apbct-ee-blur apbct-ee-blur_rectangle-hard apbct-ee-blur_animate-hard\"><\/span><br \/>\n            <\/span><br \/>\n        <\/span><br \/>\n<\/span><\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>I was searching around the net for a morning read and a ran into The Financial Whiz. Like a regular blog user I first went to the WHO section. I like to feel like I can connect with the writer. 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