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Online Share Trading

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Value of a Company

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Isn't there a nice good working value spreadsheet or other electronic tool that one cvan use to value a company, one that u fill in the PE's ect ect and gives one a value on the company? Thanks
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16 REPLIES 16
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Super Contributor
Breezer, it is not hard to develop a spreadsheet for valauation (and i am not Volunteering). But the question is why? Why do you want to value a company?... Is there something that i am missing?
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Preston, what do u mean if you say is there something u missing? I have asked a normal question and know that one can set it up on excel but just want to know if there is one out there that seems to be working well.
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Super Contributor
Sorry , I did not mean that question in an cynical manner. To rephrase my initial question. Why would an individual want to value a company before deciding whether to buy shares in it or not ? Is there some factors that i am not taking into account when I am investing?
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Super Contributor
Well Preston one needs to know if the share you are purchasing is good value or over valued and one way of doing that is evaluating the company's finances.
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Super Contributor
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It makes a huge difference is you are paying 1-5% more for a share than what it is worth, cause if you hold a share say 10year it acummulates all the time and then that 1-5% could be worth allot.
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Occasional Contributor
I agree with the valuation requirement. This is why I posted a the question to the forum earlier, specifically whether there is a purpose behind comparing NAV/share to market price/share and also this ratio comparison between similar companies in a sector ...? My understanding is that this ought to at least indicate whether there is potential value in a share, or not?
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Super Contributor
I was lead to believe that there is no positive correlation between the value of the share using valuation and actual tading value of the share. It may sound so stupid but i am being extremely honest. Question ..do you believe that Angloplat share is worth its current ruling price based on any form of valuation...
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Super Contributor
Great now thats out of the way how does one use the Price/Nav ratio?
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Great now that that is out of the way, IS there a electronic system one can use ?
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Super Contributor
See the allan gray approach to book value as a guide to market valuation in "a different take on value" in www.moneyweb.co.za today
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Super Contributor
Thanks for that link Topgun. Interesting.
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Super Contributor
Topgun .If my memory serves me correctly, There is basically 3 type of valuation method 1. Free Cash Flow 2. Price Earning Ratio 3. Net Asset Value I really hate (with a passion) valuing a company using P/E ratio. I guess the most reliable approach will be the Net Asset Value approach. Once determine , probable add another 7% in order to get the true value of the share price.
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Super Contributor
Preston seeing that you seem to be a keen student of finance and valuation techniques I will refer you to one of the best valuation books I have read: Creating shareholder value - a guide for managers and investors by Alfred Rappaport. The shareprice of a company should equal the forecasted cashflows of that company discounted by its cost of capital. These cashflows in turn serve as the foundation for shareholder returns from dividends and shareprice appreciation. The book retails for R250 - an excellent investment!!!!
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Super Contributor
I will purchase this book. Thank Topgun
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I have found one on http://www.4shared.com title: Finding Stocks the Warren Buffett Way by John Bajkowski Dont know how effective this is, if there is anyone that have used it please let me know?
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