Undervalued shares ?

Zero1 · 1 Undervalued shares ? Sun Dec 23, 2012 1:56 pm

Zero1

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What is your best share? Open for discussion

Zero1 · 2 Undervalue shares Sun Dec 23, 2012 1:58 pm

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What are the most undervalue shares

K.Haputantri · 3 Re: Undervalued shares ? Sun Dec 23, 2012 6:15 pm

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Zero1 wrote:What are the most undervalue shares

http://forum.srilankaequity.com/t23094-capital-trust-low-pbv-and-low-pe-shares?highlight=current+per+of+companies

worthiness · 4 Re: Undervalued shares ? Sun Dec 23, 2012 7:57 pm

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Investors use the common valuation methods to determine whether particular stock is undervalued or not prior to the buying decision. In this exercise, certain methodologies such as PE, PEG & intrinsic value are used to compute the valuation of the stock being traded.

The outcome of most techniques used depend on historical & quarterly accounts published for in meeting with listed requirements which are not subject to audit process. With limited notes & details, periodical report may incorporate certain window dressings that manipulate the net assets value & the net earnings.

Under such circumstances valuation exercise carried out would be inaccurate & the buying decision will be inappropriate. In this case, what protection is given for investors by company regulations?

Fresher · 5 Re: Undervalued shares ? Sun Dec 23, 2012 8:05 pm

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worthiness wrote:Investors use the common valuation methods to determine whether particular stock is undervalued or not prior to the buying decision. In this exercise, certain methodologies such as PE, PEG & intrinsic value are used to compute the valuation of the stock being traded.

The outcome of most techniques used depend on historical & quarterly accounts published for in meeting with listed requirements which are not subject to audit process. With limited notes & details, periodical report may incorporate certain window dressings that manipulate the net assets value & the net earnings.

Under such circumstances valuation exercise carried out would be inaccurate & the buying decision will be inappropriate. In this case, what protection is given for investors by company regulations?

For these techniques, retailers use the historical data (both audited and unaudited). It is not the best way though.
Even when I started, P/E was the only thing I had in mind... then NAVPS

I, as many here would have, took the latest quarter EPS multiplied that by 4 and tried to evaluate whether it is undervalued or not (using some kind of benchmark). We do not exclude the non recurring items in the reports either.

This is where stockbrokers should ideally come into play. They have research analysts and the relevant tools to do the forecasts more accurately than we could (generally).
this is where forward PER comes into play. This is what should be looked at ideally. One should buy a stock expecting a value increase in the future instead of buyin a stock that has reached it's value.

So, if you can, build a good relationship with your broker (not easy at big broker huts if you are a really small player) and ask for any research reports instead of asking the adviser himself what's good to buy. Even the reports should not be accepted at face value. go through and see what things you would change if you would forecast the same. Then make the decision.

Redbulls · 6 Re: Undervalued shares ? Sun Dec 23, 2012 10:00 pm

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npp wrote:

worthiness wrote:Investors use the common valuation methods to determine whether particular stock is undervalued or not prior to the buying decision. In this exercise, certain methodologies such as PE, PEG & intrinsic value are used to compute the valuation of the stock being traded.

The outcome of most techniques used depend on historical & quarterly accounts published for in meeting with listed requirements which are not subject to audit process. With limited notes & details, periodical report may incorporate certain window dressings that manipulate the net assets value & the net earnings.

Under such circumstances valuation exercise carried out would be inaccurate & the buying decision will be inappropriate. In this case, what protection is given for investors by company regulations?

For these techniques, retailers use the historical data (both audited and unaudited). It is not the best way though.
Even when I started, P/E was the only thing I had in mind... then NAVPS

I, as many here would have, took the latest quarter EPS multiplied that by 4 and tried to evaluate whether it is undervalued or not (using some kind of benchmark). We do not exclude the non recurring items in the reports either.

This is where stockbrokers should ideally come into play. They have research analysts and the relevant tools to do the forecasts more accurately than we could (generally).
this is where forward PER comes into play. This is what should be looked at ideally. One should buy a stock expecting a value increase in the future instead of buyin a stock that has reached it's value.

So, if you can, build a good relationship with your broker (not easy at big broker huts if you are a really small player) and ask for any research reports instead of asking the adviser himself what's good to buy. Even the reports should not be accepted at face value. go through and see what things you would change if you would forecast the same. Then make the decision.

Good points.
Plus try the following 2 links.

http://forum.srilankaequity.com/t18756-understanding-garp-stock-investing-strategy?highlight=garp

http://forum.srilankaequity.com/t12496-value-or-growth-no-it-s-garp?highlight=garp