Tyro Investor

[...] There are many valuation methods to find the intrinsic value of a particular stock. Most popular among them are: a) Price Multiple model b) Dividend [...]

[...] uses this predictable cash flows of future, discount them to current value and use it as an intrinsic value. So, which cash flows we use? Dividends? No, We use something called Free cash flow. (Using [...]

[...] it. If we expect that Coal India growth to be hampered at least for medium term, the the intrinsic value of the stock is Rs 241/- Adding Margin of safety on top of it is our call. b) Price of stock [...]

[...] the stock as per the derived Intrinsic value. Disclaimer: This post is not to suggest any Buy/Sell call on Maruthi Suzuki, instead it is [...]

[...] how powerful a habit can be (specially the bad ones). Hence the reason, I love ITC, VST Industries and to some extent United Spirits (Love the Diageo part of the story and hate the Mallya’s [...]

[...] Model): This model works best when valuating stocks for established companies (like Colgate, VST Industries, HUL etc), meaning they should have increased dividend steadily over the years. Although the [...]

[...] banks, Mortgage companies etc comes under this category. In emerging markets like India, financial service firms tend to have a higher profile and account for a larger proportion of overall market ( [...]

[...] ). Reason ? Before answering it. Firstly, lets try to understand what is unique about Financial service firms ? Financial service firms have much in common with non-financial service firms. They also [...]

[...] will be sitting next to Sanjoy Bhattacharya and Raamdev Agrawal during the investors meets. Asian Paints: This company came public in 1982 and have give around 2400 times till date (adjusted for [...]

[...] OK for me :) Finally you need “passion” to own great businesses like ITC, Colgate, HUL, Asian Paints, Pidilite, Gruh Finance and many more for years together (money will just follow), and [...]

[...] (Three stage) In order to keep our lives simple, let’s use Two stage DCF model. Hence we say Asian paints grow at 12% for the first 5 years, later from 5-10 years it grows at 8%. After 10 years it [...]

[...] and valuations. 3) Estimating cash flows is difficult: For manufacturing firms like Asian Paints, L&T etc, Capex (Capital Expenditure) they invest in plant, equipment and other fixed [...]

[...] . 2) Another example of such act comes from most respected corporate house in the world TATA. TATA Motors, during the time of its Indica launch in the year 2001-02, it has spent Rs 1178 crore on the [...]

[...] second by second like the one below. Do you ? No. But when it comes to valuing Infosys, Tata Motors, HUL we do it second by second, minute by minute. Just that BSE and NSE provides it every [...]

[...] firms seem to view it as a raw material.” In other words, debt is to a bank what steel is to Tata Motors (a Raw material). Treat is as a raw material that something to be molded into other products [...]

[...] firms seem to view it as a raw material.” In other words, debt is to a bank what steel is to Tata Motors (a Raw material). Treat is as a raw material that something to be molded into other products [...]

[...] ”. Hence I took the help of Aswath Damodaran in this aspect. He is the authority of Equity valuation and corporate governance. His teachings are immense and are in-depth (they will also [...]

[...] In the previous post we discussed Equity Valuation using Price Multiple method and now let’s try to discuss one of the most important and [...]

There are many valuation methods to find the intrinsic value of a particular stock. Most popular among them are: a) Price Multiple model b) Dividen [...]

As part of our learning in Equity Valuations, we understood how to value cyclical companies,  NBFC’s and Banks, using PE multiples and how to use [...]

[...] Dalal Street ?? In this post let’s try to see how Equities have evolved in India and reached retail investors. Even though Stock exchanges were in place from more than 4 centuries (Amsterdam Stock [...]

[...] is manipulated here. Only big heads make money in share market. This is not the place for Retail investors. 3) Equities are dead. Debt instruments, Gold and Real estate are the only ways left for us. [...]

[...] mind apart from making profit. It is to use every opportunity to take the money out from Retail investors pockets. (Not all companies, but most of them). This greedy nature of companies combined [...]

[...] firms tend to have a higher profile and account for a larger proportion of overall market (Financial firms in India have an total market cap of 1612633.67 Cr as of 20th June 2014) With such huge base [...]

[...] Declying companies etc In my previous post I have already discussed, how differently we value Financial firms. In this post, I am going to discuss on how to value cyclical company by taking Maruthi [...]

[...] stock, consider longer duration of say 7 years minimum). Earnings per share and Price to Earnings Ratio I have used following sources to get the historical information. EPS source: http://www. [...]

[...] sectors like software and FMCG have a high growth component attached to them, Price to Earnings ratio (P/E Ratio) would be a better method of gauging valuations. The ratio has its shortcomings [...]