Intrinsic value and stock valuation

Market Capitalization and Net Worth
RupeesShare PriceBook
Value20052006200720082009201020112012201320142015201602505007501000Craytheon.com

Net worth also called as "Shareholder Equity", "Stockholder's Equity", "Net Asset Value" or
"Book Value". It essentially means total assets minus total liabilities.
When you buy shares of a company, you are essentially buying a share of the company's
net worth and a share of the company's future cash flows. If the company's net worth and
cash is growing, the value of the company is going up because of which the company's
share price goes up.
The above chart displays the share price and the book value per share. Generally the share
price is above the book value price but during a recession (e.g. 2008) or due to some other
factors, the share price can go below the book value per share. Smart bargain investors buy
shares when the current market price is below the book value i.e. the stock is undervalued
but at the same time you have to ask yourself why the current market price is going below
the book value price. Is it because of some serious fundamental problems with the
company?
Current Market Price : 856.95 Rs. on 05-December-2014
Market Capitalization of ING Vysya Bank Ltd. is ___ Rs. (Sign up for Premium
Service to see the market capitalization.)
Market Capitalization = Share price x No. of shares ( theoretical price at which you can buy
the whole company )
Enterprise Value = Market Capitalization + Short term debt + Leases + Long term Debt +
Preferred Stock - Cash in hand

ING Vysya Bank Ltd. Current & Historical Price to Earnings Ratio of ING Vysya Bank Ltd. You can use the same models to figure out if the current market price of the stock is overvalued or undervalued. The valuation models given below are used by investors like Warren Buffet. Ideally you should avoid investing in a company which has a PE Ratio greater than 20. There are some things which cannot be captured by these models such as the value of a brand name or the value of a patent and other intangible assets. Average PE Ratio : ____ ( Premium membership tells you if current PE is lower or higher than long term average PE ) . These models give you an estimate which may or may not be accurate. The higher the P/E the more the market is willing to pay for the company's earnings. Sign up for premium membership to see this trend chart. one can analyze the Market's stock valuation of a company and its shares relative to the income the company is actually generating. Remember investing is a combination of science and art. So keeping these few things in mind explore the section below and see the real picture of the company as seen by market professionals. By comparing price and earnings per share for a company. Do not blindly buy or sell stocks just because one valuation model tells you to although if three or more models come to the same result then it may be wise to act on that decision. Investment bankers and private equity firms as the starting point for evaluating potential mergers and stock acquisitions.Stock Valuation Models Valuation in simple words is the process of estimating what something is worth. The P/E ratio looks at the relationship between the stock price and the company's earnings. It is usually used to compare the P/E ratios of one company to other companies in the same industry sector.

We take the average EPS of the last 3 years instead of the current EPS and average P/E ratio for the last 10 years instead of the last trailing 12 month P/E ratio. Sign up for premium membership to see this valuation model. Sign up for premium membership to see this valuation model. Discounted Cash Flow Valuation The purpose of a discounted cash flow is to estimate the sum of the future cash flow of the business and discount it back to the present value. We use the multi-year median Free Cash Flow growth rate for DCF valuation. Then we use an estimated Price/Earnings ratio to calculate the future stock price . We start with an assumption that we want to earn 10% on our investment yearly. EPS Growth Valuation Similar to Free cash flow valuation model we project the Earnings Per Share for the next ten years. : ____ Rs. The discount rate and the estimated cash flow numbers are then used in the net present value formula which calculates the intrinsic value of the company as well as the intrinsic value per share. if I want to earn 10 percent annual return". Net Present Value is ____ Rs.PE Ratio Valuation Price per share = 10 Years Average P/E Ratio x EPS Since this intrinsic value depends on Earnings per Share which is based on reported earnings or "accounting profits" which can be manipulated. So the question we are going to answer is "What price can I pay for ING Vysya Bank Ltd. DCF Intrinsic value per share of ING Vysya Bank Ltd.

5 x EPS x BVPS) Sign up for premium membership to see Graham number or else you can calculate it on your own using the company's financial statements. 20% Margin of Safety : ____ Rs.Graham number is useful for companies which depend more on their tangible assets (e. It is not so useful for companies which depend more on their intangible assets (e. EPS Growth Valuation : ____ Rs. DCF valuation : ____ Rs. Pharma.which is then discounted back to present value giving us an intrinsic value per share. Manufacturing. Sign up for premium membership to see this valuation model.g. Note . Stocks trading below their Graham Number may be undervalued. It calculates the stock's maximum fair value based of its Earnings per share and Book value per share. Oil & Gas). PE Ratio valuation : ____ Rs. Fair Value : ____ Rs. Book Value : 387 Rs.g. Graham Number : ____ Rs. Intrinsic Fair Value Share Price Range for ING Vysya Bank Ltd. IT). Graham Number Valuation Graham Number was created by Benjamin Graham. Current market price : 857 Rs. Graham's Fair Value Price = Square Root of (22. PEG Ratio : ____ . the father of value investing.

Adjusted PE Ratio is calculated as Current market price / 3 year median EPS. This difference allows an investment to be made with minimal downside risk. . The term Margin of Safety was introduced by Benjamin Graham (Warren Buffett's teacher) in his famous book The Intelligent Investor Note .Margin of safety is a principle of investing in which an investor purchases stock only when the market price is significantly below its intrinsic value. Note .Sign up for premium membership to see the intrinsic fair value price of all these valuation models.