How to Find the Intrinsic Value of a Stock!
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- เผยแพร่เมื่อ 2 พ.ค. 2024
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★★Analysis Spreadsheet (It's FREE)★★
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How to Calculate the Buy Price of a Stock in 2019! // In this one I explain exactly how you can calculate the fair value or intrinsic value of a stock on the stock market, using the method taught by Phil Town, and used by some of the most successful investors in the world.
I have personally used this stock market strategy to achieve above market average returns over multiple years and I created a free stock analysis spreadsheet that helps beginners easily calculate the buy price of stocks without dealing with difficult mathematics, making it easy to know when to buy a stock.
Below I have linked all the resources discussed in the video:
1. Understanding the Business
Circle of Competence: bit.ly/2DCZFi4
2. Economic Moat
Stock Analysis Videos: bit.ly/2Tyyn1W
3. Management
YSP Ep. 9 Management Integrity: bit.ly/2BodBuP
Young Investors Podcast Ep. 12: bit.ly/2Qisg3i
4. Margin of Safety
YSP Ep. 10 Margin of Safety: bit.ly/2zoDU2H
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Disclaimer: The information & opinions in these videos are strictly for educational & entertainment purposes ONLY. None of the opinions discussed should be taken as financial advice as I am NOT a financial advisor. Please do your own research & consult a financial advisor.
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Hey! Ive been reading and doing alot of research on investing in stocks the last 2 years. Your video (and I’m only half way thru) made a bigger impact on my learning than any of those books, podcasts, audio books. Your video and the way you are explaining your process made me able to connect my dots. Now that’s value ! Thank you so much! You are a true inspiration and aspiration on how to share, educate and lead.
Thanks so much! Glad the videos are proving helpful. If you need further help please send me an email and I will be happy to help: hamish@hamishhodder.com
Got 0% knowledge on Stock market and have just started to educate myself on how it works. Great content. T'was a big help. More power Hamish!
I appreciate this. I've been investing for about 3 years, and this is really good and informative video.
This is absolutely fantastic! You're bang on with this Hamish!! Great work!
Thank you so much for sharing this useful data! Greatly appreciated!
A+++ from this retired educator! Easy to understand and follow, breaking down components of each subject, and plenty of examples. For those of you who are newbies and overwhelmed, REPETITION is the mother of all learning. Thank you for the freebies, Hammish--sending you massive energy for wealth and success!
You make everything sound so simple and understandable man! Thank you! Keep up the good work!
This video is awesome, I can’t thank you enough. God bless you Hamish.
I'm been investing for an year now and learn most of the days how is that I missed your videos
Excellent video. Thank you for making it available.
Hamish, I have no idea how I stumbled on your video but it brilliant. You explain things really well. Thank you.
Thanks for watching James!
I'm following the channel and using the spreadsheet. Great work Hamish. All these numbers are starting to make sense.
so great to hear Eli!
The way you describe in this vid is so clear. That has made me more confident to invest in value stock .thank you😻
have you been able to use the knowledge in this video successfully or unsuccessfully?
Fun
Thanks indeed. Appreciate!.
Great content Hamish, thanks for the free education😀
Thank you for posting this video. Deep value here that creates a good base for continued learning. I appreciate you!!
Thanks for a very informative video. I've been investing for a few years and wrestling with determining what a good buying price is. Your formulas will sure be a great help. Thanks again ! Subscribed and going to watch your other videos soon.
Which calculation for the value of intrinsic value is most accurate: 1) DCF(earnings based), 2) DCF (FCF based), 3) projected FCF. Thank you.
Thanks Mister,
Made me realized lot of things to consider but at least i learn a lot from this video.
Awesome video Hamish! Your channel got recommended to me and I just subbed 😄 great content
Welcome to the team!
I've been looking for videos like this for so long. Thank you so so much
Hi Hamish, thank you for the informative video, I have a question, should I add the dividend yield to the EPS or remove it from the rate of return as you mentioned, would they give different results?
This is great!! Keep on doing great videos
You have a such a beautiful flow of words.. keep at it ma man.. & thank you
Amazing video! Thanks Hamish. You provide a lot of value to us. This video is not just for 2019, but forever and ever...
Thank you, you explained that extremely well
Good Job Hamish. So many people buy into stocks on an emotional basis instead of taking the time to actually calculate and analyze a strategic entry point. Keep it up!
Absolutely! Thanks for watching.
Hello Hamish, thanks for your very clear videos. They are very useful! I have one question with your video. In your example you use a $8 dollar EPS (ttm), but lately i has gone to $4,36 (ttm) for THOR. Was using the $8 dollar a bit optimistic? Should we better take an average over several years just like the PE ratio?
Your video is much more valuable than all investing videos i previously watched
Thank you!
Hi, thanks for your video! I'm having a little trouble using your spread sheet. I'm forwarning you that I'm a complete begininner so this might not be a difficult question. But, when I input the eps, stock price, and required rate of return, nothing happens in the manual buyzone calculator box. What do you think? I really want to be able to value a stock and make an intelligent decision if its worth buying.
Thanks for sharing awesome information. Great Explanations. Appreciations for your work.
Hi, the detailed explanation of calculating the buy price of a stock is very useful for the people who are investing in stock market.
Hi Hamish
Thanks for sharing this useful info
Could you pls let me know as to why did not you use DCF approach??
Quality video Hamish!
Thanks Tristan!
Wow loved your video
I am currently studying masters of finance but want to study trading as well and your videos are just what I need. I am going to binge watch all of them.
Great concise video with valuable content. Subbed!
This video is simplification Phil Town Rule #1 Investing and The intelligent Investor. Thank you so much.
Hi Hamish, thanks for the informative video. In this video, the formula seems to be similar to Phil Town’s and doesnt appear like the Discounted future cash flow. Is that right? Which one is your preference? Thanks
Good work! I have been watching your video and series improved over time. Great to have investors like you teaching on TH-cam.
Hi Hamish, I just want to ask. I only have the P/E Ratio data for the past 5 years. Can I still put 10 years as my time frame? Or is it better to have it at 5 as well? Thanks! Great video!
Hi Hamish,
You are doing great on your detailed videos!
I have a question regarding the spreadsheet: Do you manually key in all the stock details or do you have an automated way to input the values in the data input tab?
I just copy and paste them directly from quickfs.net most of the time
hey Hamish, this video is gold. Thanks for sharing.
Great video. Can you include the link to the spreadsheet also. Thanks.
simply excellent and probably one of a kind on this type of complex topic which you made so simple. thank you. do you have any video on setting up of technical analysis / chartings etc for better entry and exit signal of stocks?
Hey Hamish! I'm trying out you spreadsheet v2.2 and when the EPS are negative it may produce negative fair, buy and sell prices, use COTY stock for example. Can the formula be changed to solve this problem, or how do we deal with such situations?
Well done mate! Youre killing it
love this video!!
Thanks Dennis!
Hi, a very detailed explanation for laymen, mind I know what is your rationale to multiply the PE ratio (at 6:24) to obtain the future price, is that something have to do with the Peter Lynch chart method which earning somehow have some correlation with the market price?
Great video thx. In my opinion you should reduce the required rate of return on your example by 3% because the dividend payout ration is round 50%.
really like this spreadsheet and great explanation. Wonder how would you go about valuing companies with negative PE ie most growth companies
If you are a value investor, you stay away from these companies. We are making low risk high reward bets. Negative p/e in the last 10 years in the history of the company immediately rules out that company as an investment for us. That’s only one of the several filters. Actually that’s the easiest and quickest filters. The other filters look at ROIC, which has to be above 20% for the last 10 years and it has to grow or stay flat. Debt is also a filter for us.
The video you just watched is also about a filter. That’s a complicated filter, but nonetheless it’s a filter which tells that we skip a company if it’s price is equal or larger than it’s intrinsic value.
We strive to buy as few companies as possible. We always try to discourage ourself from buying particular company. We try to buy as few companies as possible in our lifetime. Warren Buffett said we should buy 20 companies for our whole life.
We always focus on the downside. When you have exhausted all of your filtering tools in your toolbox, you try to develop a story of how this company may fail in the future. You find all the short sellers, compile their comments into a singe story and then validate it’s sanity. If this story doesn’t look insane, then it might as well happen in the real world. That would mean you should skip that company, despite the fact it passed all the numerical filters.
hi, first of all really thanks for your free spreadsheet. However, i met some issues that what component would u consider as maintenance of capital expenditure. PPE, Intangibles and?? ( i am using 2020 version 3.0)
this video deserves infinite likes. thank you.
you are a legend ✌🏻 thanks for watching
@@HamishHodder Can you send me the spreadsheet to my email @ t.hai46@yahoo.com? Also what do you think of sites like Simply wall st. They also have an analysis on thor industries and are also stating that it is undervalued same as yours.
Great video Hamish
the link to your spreadsheet is not working. please be so kind and send another link that work.
Also we can read Ben Graham's 'Intelligent Investor' book from the 1940's which covers all of these points in more detail.
Hey Hamish, great video, I have two questions, is this formula work for financial companies? Also, what would be the best intrinsic value method, DCF this method and other methods? Thanks
Hi Hamish, enjoy your videos immensely….. very informative!!! Just a question, what is the best free stock screener ???
How does this compare to dcf/intrinsic value equation? More notably the ben Graham update equation.
Awesome video mate!
Would you be able to share the spreadsheet in a different way? I cannot download it
got it :)
Great video, keep it up😊👍🏼
Thanks and good effort
Hamish, thanks for being so forthcoming. Each time someone shares their understandings, as you have, we all take steps forward. MUCH APPRECIATED. Okay, I have a question/request. I'm interested in Prem Watsa's (Canadian Guru Investor that Phil Town speaks about) recent purchase of the Bank of Nova Scotia -- ticker BNS.TO. I've tried to evaluate it but am stumbling because of the reams of confusing financials connected to this institution's year end reports (and quarterlies, for that matter). I recognize that I should push this one aside into a "too hard" pile, however, I still want to understand how to evaluate banks. Can you help? Many thanks for your clarity and attention to detail.
I am analysing Caplin point. Their growth is 38 % according to experts. I put the values in spreadsheet and the growth numbers are high. But the price of the stock is falling. What growth rate should be used.
Superb. Thank you. Your explanation of intrinsic value calculation is very good. Will implement it. Thank you for sharing the excel file also. With your permission can I use it in my youyube channel.
Thank you so much Hamish...
Thanks for your video Hamish
the link to the spreadsheet is not working? Great simple video
I cant even imagine that this is free 🤯
It is great. But same concept as available in Rule#1 investor.
Hi, i couldnt go in the bi zone calculator, is it removed or what happend to that section
You need to download the old version which is version 2.2.
How would you suggest we find Sales, EPS, equity and FCF without using quickfs? specifically for nzx and asx? thanks for great video
excellent video for an investor like us.......by the way, spreadsheet link is not working...help me
Can you please resend the link to the Stock Analysis Spreadsheet thanks
Liking the spreadsheet. I am having trouble though when the EPS or FCF is negative and is not imputing the data. How can I fix that?
Hi, to calculate the future price, why not use free-cash-flow per share instead of eps; and p/fcf instead of p/e? Thanks!
Excellent content! I will be watching your future videos!
Hi Hamish, thanks for the advise, this is very concise and appreciated. I can't find the 'BUY ZONE' tab in the spreadsheet, do you have a direct link to it? Thanks again and keep up the good work... :)
Use version 2.2 (old version)
When a company has a dividend are you subtracting the dividend yield from the 15% or just assuming a 1.5% dividend paid? Should 13.5% be used for evaluating all companies with a dividend?
The spreadsheet sheet didn't work. Any advise? I downloaded the 2019 10 year spreadsheet.
Hamish, im still confusing where i can get the number to determine growth rate?
You can calculate growth rates of stocks on the wall St website.
go to the stock your looking at
in financials go to balance sheet
scroll all the way down to equities and liabilities
open up then scroll down to equity
now you can compare the equity growth from 5 years ago.
here are calculators to help calculate this.
Wrote this before watching video. so it might also be described in the video.
@@mattzuydam No one can 100% accurately calculate growth, that's an art.
@@mattzuydam This video is so wrong, Buffett,Munger,Clarman,Pabrai use DCF not this terrible advice!
@@satisfyinglook8291 Yeah obviously but gives the bloke a rough idea and where to start looking at least. :)
I think I figured out what he means. First, the author of the video has a worksheet. Download it. The worksheet has the tab to calculate the growth rate, but you need to input numbers in the "data input" tab. The row that produces the growth rate, is, not surprisingly, "equity" row on row 5 (in input tab.) If you already know that, that's great! I must say I didn't know that for myself, and it took me like 10, 15, minutes to figure out.
And where would one get the "equity" figures? In Yahoo Finance, you can go to "Financials" then "Balance sheet." (Oh, and it's the "Shareholders equity." I'm a beginner here for all those shorthand, I guess. I was not sure of that myself for a while. But now I'm positive about that.) But it only gives you 4 years. WSJ gives you 5 years (just Google the stock name and balance sheet.) More than 5 years, I don't know. Hopefully someone else can post here?
Thanks for the video! I've got one question. Where are you getting your data input numbers from? Eg) Yahoo Finance or MSN Money or are you using a paid site?
There is a google finance function built into Google sheets, where your spreadsheet can output live data. To read up on this function see this link: support.google.com/docs/answer/3093281?hl=en
@@lukecooper7961 Does it only work when you are using google sheets. For example , when I try to use it in a MS Excel spreadsheet on my hard drive it doesn't seem to work.
Only Google Sheets. However there is an excel addin by QuickFs that can display pretty much any type of data for any company on an excel spreadsheets. The free version is limited by data points but is still very useful
Luke Cooper Thanks but you have to sign up for a paid subscription to use it beyond the trial period.
Thanks, well today the stock is acctualy around 45$, what can you say about it, how should someone act today?
Very well explained, thank you! I just don't know where people get all the date. I know, I could go to the company's website and download every single year-end financial statement, but that would be a hassle. Is there any way to get something like a spreadsheet of historical data of stocks? It's great to know how to calculate fair value and intrinsic value, but I need to know what numbers to put in.
Check out some of my other videos on intrinsic value!
Sorry if this question has been asked, but when following your instructions on estimating the fair value of a stock, do we need to fill in every detail of the spreadsheet, including sales, EPS, equity, etc. Or only the parameters you are demonstrating in the video. Because you're showing us one set of data to enter, but not the rest, though I can see you have already entered all of the other data. I ask because I cannot get mine to work, but I haven't entered all data, only the data you're inputting in the video.
Also, where do we find the previous 10 years high, low and average PE ratios? I cannot find them on yahoo finance. Are they figures we need to work out ourselves based on other figures?
Hi all,
Is there a difference between the return on investment capital and the rate of return?
Great video I was trying to use this worksheet for a negative EPS but was having some difficulties but this PRTY stock has a -5.57 EPS with a current stock price of .6611. There is lots of talk for a push up on value but we don’t know. It’s risky since chapter 11 is in sight but not chapter 7 yet so there is a chance of recovery
Hello there. I have dowloaded the "Spreadsheet 2.0" and added all the data on the "Data Input" tab, but on the "9 year" column of the "GROWTH" tab there is no value. Instead it says #NUM! I checked the formula and it seems correct and consistent with the previous columns... you know how to correct this glitch? Thanks!
Great video! Where to find equity chart or how can we find the equity?
Hi Hamish, could you update the spreadsheet? The version 3 doesn't have the Buy zone calc tab. Also for MAINTENANCE CAPEX, do we use Net PPE value? Is there a single website where we could get all these data for each company?
Hi Hamish,
The video was very informative. But I couldn't found Buyzone calculator sheet on File. Please advise me how can I access it.
Hey Hamish thanks for the video, I am from Bangladesh (South East asia) it would be helpful if I knew could this model be used for 5 years or 3 years data instead of long 10 20 years data ?? Thanks again
Excellent talk
What did you mean by equity growth? Gareth I’m retained earnings or the growth in stock price
hello, i downloaded the spreadsheet but i cannot edit on it. I also do not see some of the tabs. Do you have it in excel spreadsheet?
The growth rate we are using, is that the 5 year of will it be a 10yr growth rate as well?
Hello Hamish. Where do I get the 15-20 year financial data you use in your spreadsheet?
FANTASTIC WORK. tHANK YOU VERY MUCH
does this work for Hong Kong stocks? thanks !
Hi Hamish, the spreadsheet doesn't seem to be up to date. for example the buy zone calc is not on there, and a couple of others as well.
how do you find the PE ratio for the past when yahoo finances pe ratio is for the last 12 months only
Excellent video. Will email you as I need the link also.