Stock Multiples: How to Tell When a Stock is Cheap/Expensive
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- เผยแพร่เมื่อ 16 พ.ค. 2024
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DISCLAIMER:
This channel is for education purposes only and is not affiliated with any financial institution. Richard Coffin is not registered to provide investment advice and as such does not provide recommendations on The Plain Bagel - those looking for investment advice should seek out a registered professional. Richard is not responsible for investment actions taken by viewers.
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Happy Friday everyone! Have you ever used multiples before when making an investment decision? Which ones do you tend to use? Let me know!
This is going to be a million subscriber channel, please keep up the good work
do a vid on the $1 put option. paper trade from beginning to end on Robin Hood.
P/FCF
A few, P/FCF, P/NTA(or NAV), RoE(if you'd call that a multiple), D/E. Man, now I think about it...a lot.😅
Why don't you talk about 52 week range and day range?
Protecting your capital is much more important than making money. Basically because if you lose your capital, making money is much harder. ''Missing the train'' vs. ''losing your money''. There are a lot of trains, but if your money is gone, it's over.
Wall Street pitched so-called quality stocks with high profitability and low debt, as a kind of insurance against whatever the economy might throw at you. Quality stocks have underperformed the S&P500 this year, My $200k portfolio is down by approximately 20 %, any recommendations to scale up my returns on investment
Nobody knows anything You need to create your own process, manage risk and stick to the plan, through thick or thin While also continuously learning from mistakes and improving.
Exactly why i enjoy market decisions being guided by a pro , seeing that their entire skillset is built around going long and short at the same time both employing risk management and market experience , been using a portfolio-coach for over 2years+ and I've netted over $3million in that time frame.
Impressive can you share more info?
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
Recently bought some recommended stocks and now they are just penny stocks. There seems to be more negative portfolios in the last 3rd half of 2023 with markets tumbling, soaring inflation, and banks going out of business. My concern is how can the rapid interest-rate hike be of favor to a value investor, or is it better avoiding stocks for a while?
Focus on long term investments in property, stocks, and bonds. Avoid copying, daytrading and 'chart astrology'. Diversify across different geographies, industries, and value chain stages - to reduce your risk. You can do this with ETFs, or by selecting different stocks yourself. This is the best way to invest for more than 90% of people
No doubt, having the right plan is invaluable, my portfolio is well-matched for every season of the market and recently hit 100% rise from early last year. I and my CFP are working on a 7 figure ballpark goal, tho this could take till Q3 2024.
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
ANGELA LYNN SCHILLING' is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.
Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her resume.
Opinions diverge; some claim overvaluation due to rapid gains, while others cite strong economic fundamentals justifying high valuations. Raises concern for my $600K equities going 8% up and 20% down. Should i hold on or sell off my positions and hold cash?.
It may be a good idea to speak with a financial advisor who can help you develop a portfolio based on your individual goals and risk tolerance.
I do agree, Investing has gotten difficult especially after pandemic, hence why I decided to use the expertise of an advisor, my spouse kicked against the idea initially, but oh well guess who's best buddies with our advisor now hehehe.
Glad to have stumbled on this comment, I will like to give this a try. Please who is your advisor and how do I get in touch?
*Jennifer Leigh Hickman* is the licensed advisor I use. Just search the name. You’d find necessary details on the web to set up an appointment.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
Just look at the stocks that I've purchased and wait a couple months. The price will go down, trust me.
short it then lol
@@yihtorng then it would go up LOL.
What are the stocks that you bought?
@@yihtorng "ShOrT iT tHeN" Yeah just recommend beginners to short and they end up in debt for the rest of their lives, lmao.
@@finsimple4396 short tsla win
I was advised to diversify my portfolio among several assets such as stocks and bonds since this can protect my portfolio for retirement. I'm seeking to invest $200K across markets but don't know where to start.
The professionals presently control the market since they not only have the essential business strategy but also have access to inside information that the general public is not aware of.
@@JoySibley-uw3ql The reason I decided to work closely with a brokerage adviser ever since the market got really tense and the pressure became so much(I should be retiring in 17months) so I've had a brokerage adviser guide me through the chaos, its been 9months and counting and I've made approx. 650K net from all of my holdings.
@@BrendaMorales-tr1lx How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
@@ElvinTroy “Victoria Carmen Santaella’’ You can easily look her up, she has years of financial market experience.
@@BrendaMorales-tr1lx I will give this a look, thanks a bunch for sharing.
The question of "is this share selling cheaply?" became really easy to answer in March of this year, lol.
😂😂😂😂
way to rub it in the faces of those who were longing their stock positions.
not necessarily
Yup, it just gives you the opportunity to buy more at a cheaper rate.
Unfortunately I started looking into stocks right before it dipped hard
The best times to buy in 2020: March 18, May 15, July 1, October 29. 100k would have become 200k. 200k would be 400k. 400k would be 800k. 800k would be 1.6M.
Utilizing forward P/E ratios is what got Enron in trouble. The books were being cooked and management was stating their earnings would constantly keep going up. Because of that, the analysts kept rating the company a "Strong Buy"...up until the glass house started falling apart.
P/FCF
Wasn't Enron a ponzi scheme? That'd mean Enron never stood a "chance to survive".
@@rotierender_lurch it was but most people who had invested didn’t realise until news came out
@@jpcorp2274 FCF reported by? The company (Totally no fraud possible)
@@jpcorp2274 what is FCF?
I recently graduated about a month ago from college with a degree in finance. I wanted to ego over my course material and came across this video. This is EXACTLY as it was taught to me in uni. Great video sir. Thank u
Though multiples seem helpful, I'd argue probably one of the more important things is consistent positive cashflow and low or no debt.
"Companies that have no debt can't go bankrupt."
true
company with no debts also grow slowly!
Thats the definition of a value stock, usually used for dividends. Those pay way less than growth companies have the potential to. Altough since they have much more equity/share they are safer
Except fraud exists
Assuming the company doesn't get sued, yes. Companies with no debt can still go bankrupt during a lawsuit.
The markets are looking favorable, after so much deliberation with my wife, I feel this is a good time to invest a lump sum of $700k ahead of retirement. What stock should I Look into to safely grow my money?
I do not disagree, there are strategies that could be put in place for solid gains regardless of economy or market condition, but such execution are usually carried out by investment experts or advisors with experience since the 08' crash.
True. Having the right financial planner is invaluable. My portfolio is well-matched for every season of the market and recently hit 90% rise from early last year. I and my CFP are working on a 7 figure ballpark goal, though this could take till Q3 2024.
I’ve been down a ton, I’m only holding on so I can recoup, I really need help, who is this investment-adviser that guides you
'Natalie Ann Brinkman' is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible. I booked a call session with her.
I remember watching you guys channel last year and you've grown a lot since then. The views are well deserved tho, top notch content.
I’m not a big time investor but what has worked for me in the past is very simple. Is the business revenue increasing year over year? Is the business making a profit? Does the business have good cash flow and is operating on a 15-20% margin? Does the stock pay dividend If yes I buy. Keep mind the difference between a trader and a investor
D Rod I am not even that good with terminology and analysis of stocks but that strategy has been working for me too, my only conditions are, has the stock been moving up for more than 5 years, is the company reliable, does it pay dividend... if yes then buy.
Same here. Those seem to be good foundational points
HUMMM. GIVE US SOME STOCKS AS EXAMPLE.
Gioxtream right now is not a good time to buy because the whole market is declining due to the corona virus in china but good stocks are apple, netflix, facebook, s&p500, VOO ..... etc.
@@tabaresweddingfilms if you think Netflix is a good stock then you really don't know what you are doing. Stick to ETFs
*These animations are sooo high quality man! I should start trying this.*
Thanks dude! There's an animation program called Vyond that you could try out. It's not what I use but there are other channels that do animations with it, and I've heard good things. You could try that :)
*Thank you, my sir. How long did it take you to finish this video?*
I usually spend two weeks making my videos, but that's mainly just editing on my lunch break and anywhere from 3-12 hours of editing over the weekend. I do things pretty manually through Adobe Premiere though, I'm sure Vyond would be a bit more efficient
I'm often curious to hear about animation / video graphic production software. Thanks for this little convo
@@ThePlainBagel What animation program do you use?
While I’ve known about the P/E Ratio, I never quite understood it till now. Your analogy about meat prices is a perfect explanation. Thank you.
Wouah, by far the best, clearest, and most straightforward explanation I have found on TH-cam !
Great animations, straight to the point, very informative. Keep doing what you do!
Just a little thank you comment for all the amazing work you do, your channel has truly been a help in explaining core concepts!
This is the best analogy on how to analyze a company fundamentally based on PE ratio. The example of comparing price of meats in a grocery store really reminds me of what Peter Lynch says in his One Up on Wall Street, and what's better, even easier to understand. Thank you for the smart and hard work. Very appreciated!
What I got from this video: How to Tell When a Stock is Cheap/Expensive - Answer: You can't
You can, just not with perfect accuracy and not from one metric. However if the P/E ratio is 1,200 and the business plan doesn't address how the company will eliminate Agent 007, I think it's safe to call it expensive.
@@JETZcorp AKA Tesla
You can determine if it is cheap or expensive. There is no true answer what the company should be evaluated though. So you have to speculate on what others will evaluate it in the future
@@lukaslarsson3136 You can't have a P/E when you dont quite have an E
@@JoelChenFa yes but it will be negative
THANK YOU! I've been considering doing some investing, but I have had zero clues on how to go about it. This is helpful.
Great video and very helpful!
Thank you, and keep up the great work!
Wow no one have ever experienced pe ratio like you did thank you 👍👍👍
I’ve been investing for the past 6 months now, like VOO, Coca-Cola, VT, so far. But I want to find more individual stocks and I’m struggling with the intrinsic value but I’ll get it. Thanks for the video
Useful video. Have you also done one on understanding the fundamentals you mention en passant? And I'd like to know what the story is for non-dividend stocks, eg small caps. How do you know if a non-div stock price is fair, or a south sea bubble?
This channel is excellent, and you’d have ten times the viewership with more relevant branding. Just a free tip from me in exchange for all the ones I’ve learned from you.
I have watched three of your videos now on stock market fundamentals. Solid advice, easy to understand language, and great editing. Subbed!
Thank you!
"The Flaming Bagel"💥💥💥......my favourite part of the video.
Good work Richard. I really enjoy your videos.
Best video I've seen on this by far!
Thanks for making it clear that P/E ratios aren't everything. I'm a new investor and you explain this so well! Thanks for the vid and ez subscribe :D
Loved your videos! Very simple to understand and you provide different perspectives for a layman to understand the complicated Financial terminologies.
Best P/E ratio explanation video yet
So good, easy for me to understand thanks.....also fun video to watch, thanks again
This does a good job of explaining why Buffett exceeded Ben Graham as an investor despite Buffett learning from Graham. Graham looked for value wherever he could find it and ignored the fundamentals of the business. He often found that despite finding a “deal” on the stock it went nowhere. This is due to the fundamentals of the stock. Charlie Munger introduced to Buffett the idea of finding quality businesses bought at a fair value and the rest is history.
Jimoke history being the $50bn they dropped this quarter? Or their underperformance relative to the S&P 500 this past 15-years?
So basically just invest in a market ETF
What would be an example of fundamentals?
@@hgm8337 Berk.A has grown 5x since it’s low in 2009, slightly better than SPY’s 2009 low.
@@hgm8337 and BERK.A trades at an 8 PE compared to SPY’s 28 PE
I’m a big fan of PEG price to earnings growth and the PS ratio for growth stocks that are still in/near their infant stages. Good way to gauge relative valuation, top video mate!
Great vid, so well structured in your explanations, very useful, and humble about the realities of market economic parameters
Thanks for your excellent explanation on this matter. I look at this video many times and I start to buy stocks. Have a great day.
This was exactly what I needed to know at my current level as a developing investor. Can’t thank you enough for this.
Darcy Fitzpatrick glad you found it useful!
Love the videos man really! They are helpful to implement in my own way
Thanks for this mate, this is relatively easy to follow and well explained. Much appreciated!
Thank you for another great video! Multiples are a concept I've had trouble with in the past, but your explanation makes it very clear.
Glad to hear that this helped!
Wonderful! every education my friend! love it !
Great videos, man! keep up the momentum. A question: is ENPH (Enphase Energy Inc) overvalued at the moment?
6:13 "It's Simply not that Simple".
First of all you're fricken adorable which made watching this video tolerable versus other poorly explained explanations of P/E ratios from non-adorable people. Shallow, yes but I'm owing it! Since you've made P/E ratios crystal clear as one of many multiples when considering stocks, you're earned my trust and I'm now following your channel. Thanks for being adorable!
Great video and awesome explanation of P/E. You got a new Subscriber! I hit that like button!
I love the emphasis that the P/E ratio is really only useful with more context. The P/E ratio may be higher or lower than competitors for a GOOD reason, and we have to take the initiative to find out why!
Exactly. I have seen examples of companies with high P/E with ever increasing profits. In essence, they actually WERE great companies and always delivered accordingly. Also, it's unreasonable to expect the amateur investor to be able to find "a good deal" that the market hasn't already embedded in the stock price. There’s no free lunch.
I prefer to buy high sell low. I can do it a lot more consistently and I like consistency in my life.
Thanks for another great video. Is the value that's reported on earnings day an EPS value? And if so, why does it seem to be different from EPS when I compare them?
Excellent,presentation, information,Succincticity
And personality Very apt name for the channel
therefor I subscribed
Thankyou
Thanks for making this. Your videos are always so informative!
It's really stuff I already know but it's still very nice to have it repeated so coherently. Thanks.
Thanks for your detail explanation
But I need the know the clear strategy. Kindly clarify can we follow only PE ratio for choosing the stock
is anything better on youtube than this? already watched it 6 times
6 times eh? That's because he can't teach it well. Once or twice should be enough if it was presented properly
Get a life.
Hi Richard, liked your video thanks. How do you value a startup seeking funding from investors? And how do you decide how much equity to let go in exchange of this funding?
Great video, clean animation, expertly explained. 💯
EPS(& therefore P/E) isn't my favorite metric for gauging a company. Can't stand companies slipping extra things into their reported eps to bolster the number. It's a great place to start when searching for an investment opportunity though.
Really great explainer this one nearly 3 years later :)
One thing to consider is how the P can change based on how banks and funds view an industry. I can buy shares in oil-related companies in Norway for lower multiples than some years ago, since some banks and funds no longer invest in those industries.That limits the potensial upside in share price. But make it easier to get a good dividend, since I can get in at a lower price.
My girlfriend wants to do multiples. Now I know what she means.
can i be one of the multiples lol
Ha! 🤣
Im in! Lol
Thanks Rich every time listen to one of your podcast’s I learn a little bit. Your P/E one was very good.
This content is invaluable! Thank you for putting multiples and P/E into perspective!
It’s easier to make money now, investors should make more practical moves this coming year and seek guidance where needed since the future is unknown. Stocks with solid operational performance and financial strength, should be considered .
Investors should anticipate the factors that impact portfolio performance and make decisions based on their expectations.
I think it’s best for investors to play it safe, No one can say what how the stock market will turn out this year. I bought some stocks I expected to do better but they didn’t.
@@noelstout3056 you should probably make adequate research on stocks before adding to you portfolio or seek guidance, my portfolio has grown rapidly with the guidance of my FA Dan Raziel who’s helped added dividend paying stocks with regular income despite market volatility and with Dan at the helms of my trades, there’s been increase in my annual earnings.
@@seanroger6954 Someone recommended Dan Raziel on an investment webinar I was on, how has he enhanced your earnings?
@@rahultoggi4672 Dan has greatly enhanced my earnings with huge capital gains and his trades has been life changing. In my first 6 months, he earned me a trade profit of $116,000 with an investment of $18,000. He constantly help identify lucrative positions to earn from and this has helped cleared all my debt, retirement came early with no regrets.
Hi! Would it be possible for you to do a video about the efficient market hypothesis? I’d like to know your opinion on this as it is kind of controversial. Thanks
Thanks! Do you have a video on how to in depth evaluate a company?
Great Job Bro! You make it really easy to understand. You get my Sub!😉
it helps me when is the right time to buy and sell stock i m learning from this
Where else would you get good animations and good content st the same time? You are awesome!
Thank you for the informative information on investing, definitely will listen to your knowledge. 😃
Thank you!!! I may quit eating bagel but not this channel!
Peter Griffin You’re gonna stop eating this channel
Peter Griffin 'rrrrrrrrrrrrrrroad house'
Best video I've seen about this, thanks so much! 👍
Thank you for posting this video, but it's still clear as mud. What has always amused and amazed me are tools such as Yahoo Finance. For many stocks and mutual funds a recommendations chart is provided showing where the experts stand. There's usually 1 to 4 experts that will say "buy or strong buy", 10 to 16 "hold" and 6 to 4 "sell". After I look at all of the charts, the data, info, advice, etc., it usually comes down to my gut.
And this is exactly why you do not have anything to gain by having someone invest on your behalf at a fee. It has been proven time and time again that "experts" cannot even consistently beat the market. It is approximately a 50% chance whether they will be able to do it, and when they do it is because of luck and not their ability to do it consistently.
You are much better off investing into a few index funds in such a diversified way, which gives you exposure to capitalism's growth as a whole.
@@orestispalampougioukis6043 like which index funds are you looking at now?
@@itanimulll look at the etf vids I posted
Been looking for this info for a while thank you
There's just something to Canadian investment channels...the professional eqtiuette and minimalistic styling makes it so intriguing to watch.
I didn’t know Plain Bagel is from Canada. Good to know.
Thank you so much! Love the info, any investing/finance books you recommend? I like reading what smart people are reading
JuanFernando Gracia glad you found it useful! I’ve been reading The Education of a Value Investor which just talks about the story of a prominent investor developing his own ethics and philosophy within the field, and I recently read Easy Prey Investing; it reads a bit like a text book but it’s a great resource for people who ever want to analyze financial statements.
For less boring and more practical stuff though, the Wealthy Barber books are great for anyone looking to learn a thing or two about personal finance.
Right now I’m reading a lot of technical stuff but I’ll be sharing on the channel when I come across one worth sharing :).
@@ThePlainBagel what thechnical books are you reading ? to start reading them too!!! 😋😋😋
Recently discovered your channel and it's epic. You're going to be huge 👍
Hey i have one question.
Is it okay to buy stocks only by looking at their quaterly reports?
Great video. Stock picking is hard, which is why very few people beat the market in the long term.
Until I can pick stocks with certainty, i'll stick to passive indexes with low fees.
hey, could you give me please some example of Indexes with low fees and good returns? Tx
@@andreasmadaj1716 s&p 500?
Highly informational and quality video which explains very briefly, and concisely about the PE ratio and it's other prospects. I am an engineer but watching your videos made me grow interest in finance. Can you please provide resources where I can get more information about market analysis and factors?
Read finance books,
The Intelligent Investor, and Security Analysis, Ben Graham; Peter Lynch; Common Stocks, Uncommon Profits, Philip A. Fisher, etc.
So what do you think is a good analysis that can be paired with the p/e ratio? Something to cover the missing points of the pe ratio analysis
Woah I found actually good investment advice on TH-cam! Subscribed!
Just discovered your channel, very informative and clear. thank you very much!
Cool video! I just started investing, and this really made me rethink my decisions so far. I should invest in those who will succeed not just try to buy stuff cheap. Lol. Cuz that's what I was doing. Maybe trying to outperform the market isn't the best strategy.
Wow
I understand multiples and their roles now.
college was a rip off, ten minutes in this channel and I can discuss more intelligently than my peers in any field
@@davidluong8370 nah, top tier universities dont teach you anything. I’d learn wayyyy more if I went to a shitter school. My university is just concerned with research and the teachers are here for mainly research purposes and couldnt care less about what we learn
@@davidluong8370 « if you don’t got any hustle, it wouldn’t matter what university you go to »
I think we’re saying the same thing. Universities don’t teach you anything. You teach yourself. I never said I went to a top tier university, but it’s the best in Ireland - Trinity College Dublin. It’s just id have learned way more in a lower tier university.
You go to higher level institutions, not to learn more, but to have a better looking CV despite learning the same amount, to network and to mature.
Very good and wellmade video! I'd love to see u do more about multiples
Hmm maybe I'll dive deeper into the topic...I'll add another multiples video to my list of ideas :)
7:30 scared the shit out of me, its night time when I was watching this and that noise literally made me shat my bed. Thanks :D
This video is so good. Help newbies a lot!
The world needs a TPB/Benjamin collab on basic finance.
“Youre not even sure if thats beef anymore” - that made me laugh haha 😆
Could you do a video on Asset Management companies, and how to invest in them, please?
Often the online stock analysis is difficult because they don't tell us about its multiples, no analyst coverage/opinion, or what assets are even being managed. I like that a lot of them attempt to produce income for the investor, but its hard for us lay folk to evaluate them.
im watching your videos from Argentina and you are awesome !
Thanks nice video for my starter.
All were clearly explained! A big thumb up! Subscribed!
One thing I’d add to your analysis -> P/E is extremely impacted by leverage, taxes and, on the contrary, does not reflect how efficient a company is with its cash cycle through NWC nor does it include its regular CapEx.
I know it’s probably too complicated for a non-financially literate individual to compute the FCF of a stock but I would at least combine a P/E multiple to its EBIT / EBITDA multiples or even Revenue to see how overvalued a stock is compared to its peer group.
I get ur point but warren buffet also says that depriciation is a real expense and should be considered during calculation. peter lynch also uses p/e in his fair value formula in one up on wall street. What if the value of a stock comes out over valued with p/e and undervalued with p/revenue or vice versa?
Thanks for the great information its really useful
Great video, spoke clearly, love the examples.
Love your videos!! Thank you!!
Buying a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. Hence what are the best stocks to buy now or put on a watchlist? I’ve been trying to grow my portfolio of $560K for sometime now, my major challenge is not knowing the best entry and exit strategie;s ... I would greatly appreciate any suggestions
Find quality stocks that have long term potential, and ride with those stocks. I have found it takes someone who is very familiar with the market to make such good picks.
Accurate asset allocation is crucial. Some use hedging or defensive assets in their portfolio for market downturns. Seeking financial advice is vital. This approach has kept me financially secure for over five years, with a return on investment of nearly $1 million.
Glad to have stumbled on this comment, Please who is the consultant that assist you and if you don't mind, how do I get in touch with them?
Svetlana Sarkisian Chowdhury a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance
question, what is the formula for the P/E ratio. How did he get 15 * ?
If you look at GE, last time i checked was $9ish per share but the PE ratio was whopping nearly 400 (399.some)
So what does that mean
These are great!! Love the simple explanations