Intrinsic Value Calculation

[adavid (Aris David)]

If interested, check this calculator I created to estimate the intrinsic value of a company.

https://www.quantmill.io/intrinsic-value-calculator/

The formula is quite simple, discount future Dividends + Book Value using government yield. It’s subjective, therefore shouldn’t be used as a single factor when determining what companies to invest in.

*From the 1993, Berkshire Hathaway Letter. *
“Intrinsic value is a present-value estimate of the cash that can be taken out of a business during its remaining life” . Warren Buffet, Chairman's Letter - 1993

[engineer]

Thanks @adavid. Very cool stuff.

I’m re-posting some of the other stuff here to some people, so we can build a bigger picture. We’re all learning constantly.

Equity analysis: post-Covid-19 Jedi guide to investing - Aswath Damodaran (Musings on Markets)

Damodaran has been teaching valuation since before universities called their courses “valuation”. He’s analyzed Uber and Heintz and Tesla in his blog and I’m sure some Wall St analysts have shamelessly taken his free spreadsheet models and ideas and made them their own. Some of y’all may find it interesting if you’re into the first principles kind of analysis. Recently, he’s posted some good stuff that should help some of us understand the equity investing world better. There are even videos …

And, of course, there’s no right or wrong or one way to get the intrinsic value. But knowing the fundamentals helps.

Here is Professor Damodaran’s free DCF app for iOS - y’all should try it:

‎uValue

[adavid (Aris David)]

Thanks.

The tool also forces me to look at the number of shares of a company in the past. Step 3 and Step 5.

I always avoid companies that are “printing / issuing” too much shares through Warrants and Convertible Debt. We see this a lot with AIM and penny stock companies.