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Valuation Methods

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2:41 pm
July 26, 2010


Jae Jun

Admin

posts 1464

5

You should also check out the method Vitaly uses in this book "Active Value Investing". It's another multiple based model which I believe is pretty good.

Makes sense on a business level. Not suitable for diehard finance people but for the small investor, definitely worth looking into.

11:43 am
July 26, 2010


itconsultant

Irving, Texas

Member

posts 34

4

In Bruce Greenwalds book, other than the methods ( asset valuation, earnings power), at the end you can see what other investors use for their valuation.

 

Greenberg uses DCF primarilly though he also looks at ratios. However, he only uses it for predictable firms with predictable earnings.

 

Michael Price uses the market transactions to see what is being paid to take over a firm/business.

 

Chris Browne uses P/E and P/B but also considered the multiples paid in LBOs. HE called it the appraisal method.

 

Tom Russo uses the EV / EBITDA multiple for international investing as it helps him compare firms across the world. I like this approach as well and Private equity investors usually use this. I am taking a PE class where we studied LBOs and had industry speakers come in.

 

 

2:39 pm
June 30, 2010


MrBook

Member

posts 30

3

It's MrBook. For a discussion about DCF see what I said about http://www.numeraire.com/ in the Tools & Resources section.

12:18 am
April 28, 2010


Jae Jun

Admin

posts 1464

2

Post edited 12:18 am – April 28, 2010 by Jae Jun


I like DCF the best as well but they all have advantages and disadvantages over each other.

My preference order is DCF, EPV followed by Graham, and yes I would consider buying the stock. Just have to make sure that earnings power is also sustainable.

3:24 pm
April 27, 2010


krackerjack121

Member

posts 69

1

Jae,

WHen you are screening a stock which valuation  method do you like the most?

I only know the Graham and DCF methods. I haven't learned about the EPV yet. But I like the DCF better. It seems to make more sense. Not that there is anything wrong with the Graham method.

Would you consider investing in a stock if the DCF was showing your accepted MOS, but not the Graham method or visa versa?

Rocky

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