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What is the easiest and most accurate way of finding the intrinsic value of a stock?

Hi everyone! Am a new ‘investor’, meaning I’m planning to invest but haven’t gotten my hands dirty yet! May I ask what’s the easiest and the most accurate way of finding the RANGE of the intrinsic value of a stock? Truly appreciated!

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Randy

06 Feb 2021

Financial Analyst at

Wahh, your question can be answered in whole semester of uni and there is a whole certification about this topic (CFA) 😂

But in big picture, there are three methods : present value, multipliers, and asset based. Most common and basic is dividend discount model (ddm) which falls under present value.

This is very broad topic, I urge you to read Aswath Damodaran book on valuation or youtube (he posts his class online in youtube, if you are dedicated and curious, I believe you will learn more there compared to normal finance students in uni, and you learn it FOR FREE).

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Soju

06 Feb 2021

Lead CM at Metafrontier

Welcome to the new world.

The market decides the price of the company, not your instrinsic value calculator.

You can excel and be an excellent investor by ignoring the intrinsic value calculation method.

Simply put, Intrinsic value gives you a price that your willing to buy a company at. But what you actually need, is what price you can buy the company at and make money.

There are many other ways, such as historical multiple calculation, or required dividend yield. These methods are easily calculated on the fly and can serve to be much more useful.

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