Just checked my Muli-Year numbers and they all look correct.

Jim’s last blog post..Axcelis Technology, Inc. Continuation…

Jim’s last blog post..Axcelis Technology, Inc. Continuation…

WOW, I never noticed that. LOL. I certainly know the correct calculation to DCF by hand but I’m lost when it comes to spreadsheet calculations. I would have never caught that. Thank you. On the 10 year DCF, I’m assuming the calculation would be 1/9? Thanks again!

I rarely use Google for numbers. They’ve been wrong too much concerning their data. For instance, ACLS. They report that ACLS has $71.24 M in cash & equivalents when in fact $8.32 M is restricted.

As you already know, when doing “detailed” work, always use the “actual” 10-K. I made a post on ACLS, let me know what you think. My writing skills are not the best so hopefully I’ll get better the more I write.

Jim’s last blog post..Axcelis Technology, Inc. Continuation…

But instead of the ^1/4 at the end, the free version may have 1/3 or 1/5. Just need to go through it and check.

It seems like Google has historical pricing as well. But I’ve only used Yahoo to check the past 10 years data.

Although I don’t trust their numbers completely, finance.yahoo.com has historical closing prices of a stock in which many go back 20 sometimes 30 years if the company has been around that long of course. You can get those prices on a daily, weekly, or monthly basis. Very useful when looking at their historical growth correlation.

As far as David Dreman, I was just mentioning how funny it was that I started reading that exact book “the next generation” around the same time you read it. I found a brand new copy on ebay for $3. Shipping & Handling cost me more than the book did Take care.

Jim

Jim’s last blog post..Breaking Down the Business Part 1: Axcelis Technologies, Inc.

Somebody pointed out the formula when calculating the ranges in the free spreadsheet is actually incorrect but it turns out to be more conservative. I also dont use the auto calculated growth rate. I always check the historical pricing and then usually apply a growth rate that is slightly lower than the PE.

So far this method has been fairly accurate for me so I’ll stick to what works until I find a better method.

Where do you get the information for historical prices of 20 years??

(Oh and for some reason your comments got deleted so I had to add it back manually. I lost your other comment regarding the Contrarian Value Investing book as I was switching web hosts as well..)

That is a statement to live by. I try to go back at least 20 years in pricing.

Jim’s last blog post..Axcelis Technologies, Inc. (NASDAQ: ACLS)

LOL I’m sorry, I just noticed someone had the same question as I did after the fact. Anyway, I actually like the fact that the version I’m using is allot more conservative of an estimate than your premium one. All the best and sorry for asking before reading.

Jim’s last blog post..Axcelis Technologies, Inc. (NASDAQ: ACLS)

None of your DCF or Graham Formula values are the same as the ones I’m coming up with and I’m using the same program. I’m stumped. I do use CROIC rather than FCF as my growth factor but switching it to FCF (I believe you mentioned that’s what you use), the numbers aren’t much different. For instance:

Carlisle Companies, Inc. is a company that interests me but I’m getting a 5 Year DCF Intrinsic Value of $48.30, a 10 Year DCF Valuation of $50.72, & a Graham Formula Valuation of $59.72.

Much different than the numbers you’ve posted.

Jim’s last blog post..Axcelis Technologies, Inc. (NASDAQ: ACLS)

The formula is only different if you are using the free version of the spreadsheet. I’ve made many tweaks to the premium spreadsheet so the results will be slightly different.

On the other hand, if you are using the premium, it may also be because I’ve gotten to the point where I know what growth rate I should be using.

One tip is to look at the historical prices and how it fits in with the intrinsic value line. Over time, price follows value so if the historical price of 10 years travels somewhat closely to the growth rate, you’ve found a possible realistic growth rate for the next 5 years or so, not the next year.

Then it’s simply deciding what the discount rate should be. Is it a stable company throwing off huge amounts of cash flow (JNJ, KO, MSFT, CSCO etc)? Then you can just use a 9% rate, otherwise stick with 15% since we are making assumptions with DCF and it’s always better to emphasize present dollars rather than future dollars. That’s what a discount rate is. Whether you hold the future cash flow or the present cash flow more valuable. I always prefer to view present cash flows as more valuable.

http://seekingalpha.com/article/64013-who-s-sharing-cisco-s-cash

Ken’s last blog post..Paul Graham on funding start ups