great Video. Ran the test all looked good but then I updated the free cash flow (58896000,73365000,92953000, 111443000) to reflect todays values and I get a fair value as 18797.29 and todays share price is $166. IS there anything I haven't taken into consideration
What if the price of the stock is a lot higher, lets says double? Also, I tested with AMC at around 50 dollars, it says over 1,000 in fair value. Any taughts?
I don't think a fair value that high would be absorbed by the market so quickly. Maybe very long term it could but its unreasonable to assume fair value is thousands of % greater than current market price.
Hello and thank you for this great video. Do you think you could tell me how I could display automatically the last 10 years of FCF from yfinance ? ? Instead of doing that manually. I've added to your code an input at the begining, asking "what is the ticker ?" , the rest follows that input but I would like to put into the FCF list the last 10 FCF digits automatically, without typing. If someone can help me with that. Thanks
DCF almost always undervalues a stock. I'm not a finance guru so I'm not exactly sure why that's the case but I have run hundreds of these models and less than a handful come out with a current stock price less than the DCF. If you rely on DCF then you will rarely if ever be buying any stock.
You should think critically on the growth you assign the company for every single year. Don’t just copy what wallstreet is predicting. Every number should be studied deeply, ex. To calculate capex you look at the previous years and look at the capex/revenue allocation, if it’s a consistant 5%, then use 5% for all the other years but if the management announced a new plant then you should probably use a higher capex than 5% on revenue. So read the annual reports very carefully and apply those insights to the dcf. Also, try finding companies that look undervalued with simple metrics like P/E, P/S, P/B, buybacks,… then look at how their revenues grew the past 5 years. Filter out and keep those that look healthy and cheap and then make a dcf. This will save you a lot of time.
Thanks for sharing, could you please explain how to get the company data scrapped ? In your exemple you had the AAPL data stored but how did you get these data ?
You download it from Yahoo Finance (free provider) or you pay for up-to-the-minute data from a finance data provider (Bloomberg, CME, etc.). You can save the OHLC data as an .xls or .csv file and import it into Python. Or you use the Yahoo API but it is inconsistent. Better to download as csv or use a brokerage API or pay for Bloomberg. Hope this helps
Thanks for filming this but it's just not very good code. First off, it's not modular enough to be applied to a variety of assets. Also when you hardcode those assumptions, your fair value is massively off base. For example, apple is around 170/share but that code would value it less than 100. WACC for example needs to be way more accurate.
Looking at your video, the annul discounted values are incorrect. It seems same value, 70622383, is repeated across. I get different values following your formula: 70622383 67982294 65440899 62994511. In addition, it is unclear how you discounted your terminal value, as there's no time frame associated with it. I assume you use at the 5th month, for which the discounted value must be: 1067087913.
Great video. You should integrate this with streamlit.
great Video. Ran the test all looked good but then I updated the free cash flow (58896000,73365000,92953000, 111443000) to reflect todays values and I get a fair value as 18797.29 and todays share price is $166. IS there anything I haven't taken into consideration
Thank you.
Great video! Thanks!
Great video! Do you think you could make a video on predicting stock prices using the yfinance data?
What if the price of the stock is a lot higher, lets says double? Also, I tested with AMC at around 50 dollars, it says over 1,000 in fair value. Any taughts?
very specific case, priced at $47.94, the stock is considered to be 25920% overvalued. Faire valued is at $0.18 as per DCF method
I don't think a fair value that high would be absorbed by the market so quickly. Maybe very long term it could but its unreasonable to assume fair value is thousands of % greater than current market price.
You probably made a mistake
Terminal value is nnot running
Hello and thank you for this great video. Do you think you could tell me how I could display automatically the last 10 years of FCF from yfinance ? ? Instead of doing that manually. I've added to your code an input at the begining, asking "what is the ticker ?" , the rest follows that input but I would like to put into the FCF list the last 10 FCF digits automatically, without typing. If someone can help me with that. Thanks
Hey did you end up finding that out? Would love to know how I could do that.
Hey, nope, not found
DCF almost always undervalues a stock. I'm not a finance guru so I'm not exactly sure why that's the case but I have run hundreds of these models and less than a handful come out with a current stock price less than the DCF. If you rely on DCF then you will rarely if ever be buying any stock.
You should think critically on the growth you assign the company for every single year. Don’t just copy what wallstreet is predicting.
Every number should be studied deeply, ex. To calculate capex you look at the previous years and look at the capex/revenue allocation, if it’s a consistant 5%, then use 5% for all the other years but if the management announced a new plant then you should probably use a higher capex than 5% on revenue.
So read the annual reports very carefully and apply those insights to the dcf.
Also, try finding companies that look undervalued with simple metrics like P/E, P/S, P/B, buybacks,… then look at how their revenues grew the past 5 years. Filter out and keep those that look healthy and cheap and then make a dcf.
This will save you a lot of time.
Thanks for sharing, could you please explain how to get the company data scrapped ? In your exemple you had the AAPL data stored but how did you get these data ?
You download it from Yahoo Finance (free provider) or you pay for up-to-the-minute data from a finance data provider (Bloomberg, CME, etc.). You can save the OHLC data as an .xls or .csv file and import it into Python. Or you use the Yahoo API but it is inconsistent. Better to download as csv or use a brokerage API or pay for Bloomberg. Hope this helps
Thanks for filming this but it's just not very good code.
First off, it's not modular enough to be applied to a variety of assets.
Also when you hardcode those assumptions, your fair value is massively off base. For example, apple is around 170/share but that code would value it less than 100.
WACC for example needs to be way more accurate.
greast stuff
Looking at your video, the annul discounted values are incorrect. It seems same value, 70622383, is repeated across. I get different values following your formula: 70622383 67982294 65440899 62994511.
In addition, it is unclear how you discounted your terminal value, as there's no time frame associated with it. I assume you use at the 5th month, for which the discounted value must be: 1067087913.
completely wrong, totally completely wrong
Leaving the coding and Ptthon aside, the assumptions make this theoretically useless.