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What Is A Valuation Multiple?
 
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This lesson was prompted by a question that came in from a reader and student of our courses the other day: "When you divide Enterprise Value by Revenue (EV / Revenue), or Price Per Share by Earnings Per Share (P / E), what does that actually mean? By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" In other words, if Enterprise Value / Revenue is 5.8x, what does that number actually mean?" Answer often given in textbooks: How valuable a company is in relation to its sales, profits, and so on... based on those metrics, how does the market value that company? But the real answer: the multiple itself means nothing at all! By itself, a single valuation multiple such as 5.8x or 15.3x or 25.7x means... absolutely nothing. Valuation multiples are ONLY meaningful in relation to the multiples of OTHER, similar companies ("public comps" or "public company comparables"). It's like saying, in real life, "The asking price for that house is $500,000, or around $500 per square foot. What does that mean?" Answer: It depends... on the asking prices of similar houses in the region, also on the location, the type of house, # beds and bathrooms, the condition, the neighborhood, the public school system... Could mean that the house is very expensive, or that it's very cheap, or that it's priced about right. You already know this if you've studied valuation and have valued companies on your own... BUT there are 2 specific points that often go overlooked with valuation multiples: 1. The companies you're comparing should ideally have similar growth and margin profiles, or the comparison is less meaningful. It's NOT enough just to be in the same industry and be about the same size - that's a starting point, but financial profiles should ideally be similar as well. Be very careful - acquisitions often distort these numbers! Very different margins also distort the numbers (ex: 2 companies with similar revenue and 1 has a much higher margin - mathematically speaking, very likely to trade at a LOWER multiple just because the denominator will be bigger). 2. Even if the companies DO have similar financial profiles, a higher or lower multiple doesn't necessarily mean that one company is "overvalued" or "undervalued" because qualitative factors also play a role. For example, did the company just make an acquisition? Did it miss earnings? Did it get sued? Did a new competitor pop up? Think of valuation multiples as "clues" in a detective story... they can guide you in the right direction, but 1 clue is not enough evidence to solve the mystery of whether a company is valued appropriately. We demonstrate both of these points with Ralcorp (a food and beverages company) in the video, and show you how the set of public comps all have very different financial profiles that were impacted by acquisitions in some cases. Key Takeaways: 1. A valuation multiple means nothing on its own - only meaningful when compared to other companies', and ideally the median multiple from a set of other companies. 2. When picking a set of public comps, it's not just about industry and size... even if you do select companies with those criteria, must pay attention to growth and margins as well. If all the companies in your set have very different growth and margins from the company you're valuing, you may want to consider a different set. If there are acquisitions, it's better to pay more attention to forward multiples / growth rates / margins instead - for 1-2 years in the future. The analysis is MOST meaningful if, for example, all the companies have very similar growth and margins but the one you're looking at trades at much different multiples - then it's worth investigating further and seeing what explains that. 3. Just because a multiple is higher or lower than other companies' multiples doesn't mean that the company you're valuing is overvalued or undervalued... it's just one of many factors. Here, the presence of a hostile bidder threw off the numbers. Plus, rumors of the company spinning off divisions... Could be any number of things in real life as well - earnings announcements, changes in strategy, expansion plans, patents, lawsuits, management team changes, etc.
The Price-to-Earnings (P/E) Ratio | Basic Investment Terms #6
 
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*** LINKS BELOW *** This video is about the Price-to-Earnings Ratio. This ratio can be summarized as: the amount you are willing to pay for every 1$ unit of EPS of the company. Learn how to interpret this as it can become a useful tool when comparing stocks, but be certain to take into account the sector, industry, market and debt status of these companies (don't compare apples to oranges!) Cheers!! Check out my BLOG: https://dividendinvestorweb.blog Follow me on Twitter: https://twitter.com/DividInvestor Google +: https://plus.google.com/u/0/+DividendInvestor Youtube: https://www.youtube.com/c/DividendInvestor
Views: 145046 Dividend Investor!
Trailing PE vs Forward PE Ratio | Definition | Formula (with Examples)
 
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In this video on Trailing PE vs Forward PE Ratio ,we will study definition, calculation along with some practical examples. ๐–๐ก๐š๐ญ ๐ข๐ฌ ๐“๐ซ๐š๐ข๐ฅ๐ข๐ง๐  ๐๐„ ๐‘๐š๐ญ๐ข๐จ? -------------------------------------------------- Trailing PE Ratio is where we use the historical income per denominator share. ๐“๐ซ๐š๐ข๐ฅ๐ข๐ง๐  ๐๐„ ๐‘๐š๐ญ๐ข๐จ ๐…๐จ๐ซ๐ฆ๐ฎ๐ฅ๐š --------------------------------------------- Trailing PE Ratio Formula (Trailing Twelve Months) = Price Per Share / EPS over the previous 12 months. ๐“๐ซ๐š๐ข๐ฅ๐ข๐ง๐  ๐๐„ ๐‘๐š๐ญ๐ข๐จ ๐„๐ฑ๐š๐ฆ๐ฉ๐ฅ๐ž ------------------------------------------- Let us calculate Google's trailing PE percentage. Google's Current Share Price = 2,586.51 (as of 22th March, 2017) Revenue Earnings Per Share Dec 16 50,453.00 3.154 Sep 16 45,744.00 0.520 Jun 16 38,955.00 0.420 Mar 16 36,714.00 1.515 Earnings Per Share of Google's = EPS (Dec,2016) + EPS (Sep 2016) + EPS (June 2016)+ EPS (March, 2016) = 3.154 + 0.520 + 0.420 + 1.515 = $5.609 PE (Trailing Twelve Months) = Current Price / EPS (TTM) = 2,586.51 / 5.609 = 461.1 x. ๐–๐ก๐š๐ญ ๐ข๐ฌ ๐…๐จ๐ซ๐ฐ๐š๐ซ๐ ๐๐„ ๐‘๐š๐ญ๐ข๐จ? -------------------------------------------- Forward PE Ratio is where we use the forecasts income per denominator share. ๐…๐จ๐ซ๐ฐ๐š๐ซ๐ ๐๐„ ๐‘๐š๐ญ๐ข๐จ ๐…๐จ๐ซ๐ฆ๐ฎ๐ฅ๐š -------------------------------------------- Forward PE Ratio Formula = Price Per Share / Forecasted EPS over the next 12 months ๐…๐จ๐ซ๐ฐ๐š๐ซ๐ ๐๐„ ๐‘๐š๐ญ๐ข๐จ ๐„๐ฑ๐š๐ฆ๐ฉ๐ฅ๐ž ------------------------------------------------- Let us calculate Google's Forward PE percentage. Google's Current Share Price = 2,586.51 (as of 22th March, 2017) Earnings (Per Share) Quarter Ending Apr-17 41 1.35 Quarter Ending May-17 35 1.45 Year Ending Dec-17 37 7.31 Forward EPS (2017) of Google's = $7.31 Forward PE Ratio (2018) = Current Price / EPS (2017) = 2,586.51/ 7.31 = 353.83 x. To know more about Trailing PE vs Forward PE Ratio you can go to this ๐—น๐—ถ๐—ป๐—ธ ๐—ต๐—ฒ๐—ฟ๐—ฒ:- https://www.wallstreetmojo.com/trailing-pe-vs-forward-pe/ Subscribe to our channel to get new updated videos. Click the button above to subscribe or click on the link below to subscribe - https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUw?sub_confirmation=1
Views: 1022 WallStreetMojo
Forward Rate Calculation for Multiple Years (Preview)
 
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Watch FULL video Click Here: http://www.MBAbullshit.com
Views: 1280 MBAbullshitDotCom
Bloomberg Training: Comparing Company Multiples Part 1- www.Fintute.com
 
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Comparing company multiples is often one of the first tasks assigned to a junior analyst at an investment bank or equity firm. This Bloomberg training tutorial will look at how you can find key ratios and comparable companies using Bloomberg. Part 2 of the video will look at how you can use excel and Bloomberg's API interface to create dynamic models straight in excel. Be sure to give us your feedback!
Views: 25277 Fintute
Hedge fund strategies: Long short 1 | Finance & Capital Markets | Khan Academy
 
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Setting up a simple long-short hedge (assuming the companies have similar beta or correlation with market). Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/investment-vehicles-tutorial/hedge-funds/v/hedge-fund-strategies-long-short-2?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/investment-vehicles-tutorial/hedge-funds/v/hedge-funds-venture-capital-and-private-equity?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Hedge funds have absolutely nothing to do with shrubbery. Their name comes from the fact that early hedge funds (and some current ones) tried to "hedge" their exposure to the market (so they could, in theory, do well in an "up" or "down" market as long as they were good at picking the good companies). Today, hedge funds represent a huge class investment funds. They are far less regulated than, say, mutual funds. In exchange for this, they aren't allowed to market or take investments from "unsophisticated" investors. Some use their flexibility to mitigate risk, other use it to amplify it. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academyโ€™s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
Views: 181722 Khan Academy
Session 15: PE Ratios
 
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Look at the determinants of PE ratios and how to use them in comparisons across time, markets and companies.
Views: 43752 Aswath Damodaran
Introduction to the price-to-earnings ratio | Finance & Capital Markets | Khan Academy
 
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Price to Earnings Ratio (or P/E ratio). Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/valuation-and-investing/v/p-e-discussion?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/valuation-and-investing/v/earnings-and-eps?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Life is full of people who will try to convince you that something is a good or bad idea by spouting technical jargon. Most of them have no idea what they are talking about. Don't be one of those people or their victims when it comes to stocks. From P/E rations to EV/EBITDA, we've got your back! About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academyโ€™s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
Views: 324589 Khan Academy
Valuation Methods, Stock Valuation Techniques
 
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For details, visit: http://www.financewalk.com Valuation Methods, Stock Valuation Techniques Relative Valuation What is Relative Valuation In relative valuation,we compare a stock's valuation with those of other stocks or with the company's own historical valuations. Idea is similar assets should sell at similar price and relative valuation is typically implemented using price multiplies. Quick and Easy The concept behind relative valuation is simple and easy to understand: the value of a company is determined in relation to how similar companies are priced in the market. Here is how to do a relative valuation on a publicly listed company: โ€ข Create a list of comparable companies, often industry peers and obtain their market values. โ€ข Convert these market values into comparable trading multiples, such as P-E, price-to-book, enterprise-value-to-sales and EV-EBITDA multiples. โ€ข Compare the company's multiples with those of its peers to assess whether the firm is over or undervalued. โ€ข Example: WIPRO & Infosys If Wipro has a P-E ratio of 16 and Infosys has average P-E of 26 and the average for the industry is closer to, say, 25, Wipro's shares are cheap on a relative basis. You could also compare Wipro's P-E with the average P-E of an index, such as the SENSEX or Nifty, to see whether Wipro still looks cheap. Price-Earnings Ratio (P-E) = Market Price Per share - Earnings Per Share โ€ข PE is the ratio or the multiple โ€ข It tells you how much investors are willing to pay for every unit of the EPS. It also tells you whether the stock is undervalued, overvalued or fairly valued. โ€ข Trailing PE, Forward PE are used to estimate the price of the stock โ€ข Reverse of PE is called Earnings yield. โ€ข It is the most popular ratio in relative valuation โ€ข PE should be compared with its peers in the same industry โ€ข PE can also be compared with the company's track record.
Views: 31459 FinanceWalk
QUICK guide to using EV/EBITDA and P/E multiples in Stock Valuation
 
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Watch the next finance lesson: https://bluebookacademy.com/courses
Views: 4488 BlueBookAcademy.com
Bloomberg Training: Bloomberg Forward Calculator - www.fintute.com
 
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This Bloomberg training tutorial will look at how you can use the Bloomberg terminal to calculate forward prices.
Views: 17594 Fintute
Transaction Multiples Valuation | Definition | Steps to Calculate
 
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In this video, we discuss on Transaction multiples valuation definition along with its calculation , advantages and disadvantages. ๐–๐ก๐š๐ญ ๐ข๐ฌ ๐“๐ซ๐š๐ง๐ฌ๐š๐œ๐ญ๐ข๐จ๐ง ๐Œ๐ฎ๐ฅ๐ญ๐ข๐ฉ๐ฅ๐ž๐ฌ ๐•๐š๐ฅ๐ฎ๐š๐ญ๐ข๐จ๐ง (๐Œ&๐€)? ----------------------------------------------------------------------------- Multiple Transactions or Multiple Acquisitions is a method in which we look at past Merger & Acquisition (M&A) transactions and value a similar firm with precedents. It is based on the assumption that the value of the company can be estimated in similar acquisitions by analyzing the price paid by the acquiring company. ๐’๐ญ๐ž๐ฉ๐ฌ ๐ญ๐จ ๐‚๐š๐ฅ๐œ๐ฎ๐ฅ๐š๐ญ๐ž ๐“๐ซ๐š๐ง๐ฌ๐š๐œ๐ญ๐ข๐จ๐ง ๐Œ๐ฎ๐ฅ๐ญ๐ข๐ฉ๐ฅ๐ž ------------------------------------------------------------------- #Step 1- Determine the Transaction #Step 2 -Identify multiples of Right Transaction #Step 3 -Calculate the Transaction Multiple Valuation ๐€๐๐ฏ๐š๐ง๐ญ๐š๐ ๐ž๐ฌ ๐จ๐Ÿ ๐“๐ซ๐š๐ง๐ฌ๐š๐œ๐ญ๐ข๐จ๐ง ๐Œ๐ฎ๐ฅ๐ญ๐ข๐ฉ๐ฅ๐ž ๐•๐š๐ฅ๐ฎ๐š๐ญ๐ข๐จ๐ง ---------------------------------------------------------------------------- #1 - Anyone can access available data since it is public. #2 - Since the assessment is carried out on a range basis, it is much more practical. #3 - It also helps you better understand business. ๐ƒ๐ข๐ฌ๐š๐๐ฏ๐š๐ง๐ญ๐š๐ ๐ž๐ฌ ๐จ๐Ÿ ๐“๐ซ๐š๐ง๐ฌ๐š๐œ๐ญ๐ข๐จ๐ง ๐Œ๐ฎ๐ฅ๐ญ๐ข๐ฉ๐ฅ๐ž ๐•๐š๐ฅ๐ฎ๐š๐ญ๐ข๐จ๐ง --------------------------------------------------------------------------------- #1 - Individual viewpoints would occur during the valuation of the target company; no one can avoid them. #2 - Even if various factors are taken into account, many more factors are still not considered. #3 -No deal can be the same, even if deals are compared. There would be one or more dissimilar factor. If you want to know more about ๐“๐ซ๐š๐ง๐ฌ๐š๐œ๐ญ๐ข๐จ๐ง ๐Œ๐ฎ๐ฅ๐ญ๐ข๐ฉ๐ฅ๐ž you can visit the ๐ฅ๐ข๐ง๐ค ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐ž๐ ๐ก๐ž๐ซ๐ž:- https://www.wallstreetmojo.com/transaction-multiples/ Subscribe to our channel to get new updated videos. Click the button above to subscribe or click on the link below to subscribe - https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUw?sub_confirmation=1
Views: 312 WallStreetMojo
Cancellation & Extension of Forward Contract- Forex
 
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Chapter-wise Classes Available contact 9977223599, 6261676836 [email protected]
Views: 1982 CA PAVAN KARMELE
Lesson 6 | Stock Fundamental Analysis in Hindi - EV / Ebitda Model | Stock Valuation
 
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Link to Excel - http://corneey.com/wJ7VZw ( Download ) Our Latest Videos - Lesson 5 : PB - ROE Model - https://youtu.be/Xs_XQv-DdD8 Lesson 4 : Forward PE Ratio - https://youtu.be/aDot5IFw0jc Tata Motors Fundamental Analysis - https://youtu.be/LdRW-TiH74g HEG Vs SUZLON - https://youtu.be/11TZ65lSiHs NIFTY Valuation - https://youtu.be/jC2wnT0rNfw This is the 6h Video ( Lesson 6 ) on Fundamental Analysis on EV (enterprise Value ) and EBITDA, This model helps us to Calculate the Target Price of the Stock. ( ** This Video is Strictly for Educational purposes, and the contents of this video is to help you learn better in terms of Stock investing. None of the Stocks mentioned in this Video are Recommendations to BUY or SELL. These are mere examples so that you can learn better. **)
Views: 29518 Imvestor
Trading Multiples | Definition | Steps to Valuate Company
 
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In this video, we will study about Trading Multiples and steps to know while valuing company using Trading Multiples. ๐–๐ก๐š๐ญ ๐ข๐ฌ ๐“๐ซ๐š๐๐ข๐ง๐  ๐Œ๐ฎ๐ฅ๐ญ๐ข๐ฉ๐ฅ๐ž๐ฌ? ----------------------------------------------- Trading multiple valuations is nothing but identification of similar companies and performance of relative prices such as an expert to determine the company's fair value. ๐’๐ญ๐ž๐ฉ ๐ญ๐จ ๐Š๐ง๐จ๐ฐ ๐–๐ก๐ข๐ฅ๐ž ๐•๐š๐ฅ๐ฎ๐ข๐ง๐  ๐š ๐‚๐จ๐ฆ๐ฉ๐š๐ง๐ฒ ---------------------------------------------------------------------- #1 - Identify Comparable Companies #2 - For Valuation look at Trading Multiples ๐๐จ๐ฉ๐ฎ๐ฅ๐š๐ซ ๐ฎ๐ฌ๐ž๐ ๐“๐ซ๐š๐๐ข๐ง๐  ๐Œ๐ฎ๐ฅ๐ญ๐ข๐ฉ๐ฅ๐ž๐ฌ ---------------------------------------------------------- EV/EBITDA EV/Revenue P/E Ratio EV/EBIT #3 - Comparison of the Multiples with the Company ๐๐จ๐ข๐ง๐ญ๐ฌ ๐ญ๐จ ๐‘๐ž๐ฆ๐ž๐ฆ๐›๐ž๐ซ ๐จ๐Ÿ ๐“๐ซ๐š๐๐ข๐ง๐  ๐Œ๐ฎ๐ฅ๐ญ๐ข๐ฉ๐ฅ๐ž๐ฌ -------------------------------------------------------------------------- #1 - Many trading multiples can fool you. It's better if you look for trading multiples looking for future rather than just looking at the past data. #2 - EV/EBITDA multiple is popular to use if we want to compare target company with big companies. To know more about ๐“๐ซ๐š๐๐ข๐ง๐  ๐Œ๐ฎ๐ฅ๐ญ๐ข๐ฉ๐ฅ๐ž๐ฌ, you can go to this ๐ฅ๐ข๐ง๐ค ๐ก๐ž๐ซ๐ž:- https://www.wallstreetmojo.com/trading-multiples/ Subscribe to our channel to get new updated videos. Click the button above to subscribe or click on the link below to subscribe - https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUw?sub_confirmation=1
Views: 77 WallStreetMojo
46.  CFA Level 1 Equity Valuation - Concepts and Basic Tools - LO7 and LO8 Part 2
 
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All 10 Level 1 topics are available on this channel. If you like what I am doing, then be a friend: 1. Click subscribe so that you will be notified of all new uploads 2. Click like (the more likes these videos get, the better they show up in search results) 3. Don't click dislike!! That does not help me improve the content and delivery. If you don't like something, leave a comment, politely of course. 4. Click Share - help other find what you have found. REQUIRED DISCLAIMER: CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by Mark Meldrum. CFA ยฎ are trademarks owned by CFA Institute.
Views: 9920 Mark Meldrum
EV to EBITDA Valuation | Calculate EV/EBTIDA Multiple
 
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in this video, we discuss what is EV to EBITDA. Here we understand the meaning of EV/EBITDA valuation multiple and how it is useful. We also look at why this valuation multiple is better than PE Ratio. What is EV to EBITDA? ------------------------------------------- EV to EBITDA ratio is defined as Enterprise value divided by EBITDA (Earnings before interest taxes depreciation and amortization) EV to EBITDA Formula = EV/EBITDA What is Trailing and Forward EV to EBITDA? -------------------------------------------------------------------------- - Trailing EV to EBITDA uses historical EBITDA - Forward EV to EBITDA uses forecast value of EBITDA - EV is calculated as Market Capitalization + Debt - CAsh EV to EBITDA interpretations --------------------------------------------------- EV to EBITDA valuation tool is used to determine if the company is overvalued or undervalued. Lower EV to EBITDA implies that the company may be undervalued Higher EV to EBITDA may imply that the company is overvalued. Why EV to EBITDA is better? EV to EBITDA is a superior valuation tool to compare two companies or companies from different nations as it ignores the effect of Depreciation and Amortization policy differences as well as differences in taxes. If you want to know more about EV to EBITDA Valuation, you can visit the ๐ฅ๐ข๐ง๐ค ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐ž๐ ๐ก๐ž๐ซ๐ž:- https://www.wallstreetmojo.com/ev-to-ebitda-multiple-formula/ Subscribe to our channel to get new updated videos. Click the button above to subscribe or click on the link below to subscribe - https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUw?sub_confirmation=1
Views: 1234 WallStreetMojo
PE RATIO EXPLAINED - HOW TO USE PRICE EARNINGS RATIO FOR STOCK MARKET DECISIONS
 
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Graham devotes a complete chapter on how to use the Price to earnings ratio or PE ratio to make stock market decisions. We explain what a PE ratio is, how to calculate it and how to use it. We go through Graham's examples but also give modern examples of what to watch for when investing. Sven Carlin Research Platform: https://sven-carlin-research-platform.teachable.com/p/stock-market-research-platform Modern Value Investing book: https://amzn.to/2lvfH3t Sven Carlin blog: https://svencarlin.com
IPO Valuation Model
 
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In this tutorial, youโ€™ll learn what an โ€œIPO valuationโ€ really means, how to model an initial public offering (IPO) transaction, and what an IPO model tells you about the company and its possible valuation multiples before and after going public. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" Table of Contents: 4:17 The Rationale and Assumptions Behind an IPO 7:47 Pricing vs. Trading Equity Value in an IPO 12:38 Primary vs. Secondary Shares and the Greenshoe or Overallotment Provision 16:10 Deal Size & Net Proceeds to Issuer 19:31 Implied Valuation Multiples 21:08 Alternate IPO Model Driven by Offering Price per Share and Shares Sold/Issued 24:05 Recap and Summary Lesson Outline: We get a lot of questions about "IPO valuation" or "IPO modeling," but the truth is that itโ€™s really simple because you don't, in fact, "value" a company in an IPO. Instead, you simply value a company and then decide how its valuation might be different in an IPO (e.g., no private company discount). Step 1: Assumptions & Setup You almost always start an IPO model with an idea of how much in funding the company wants to raise, and the multiples it may be valued at (based on public comps). The multiples used vary by industry, but 1-year forward P / E multiples are very common (e.g., go to the next full fiscal year and assume a multiple for that projected full-year figure). Here, weโ€™d pick forward multiples from similar, profitable social networking / mobile messaging companies (not covered in this tutorial in the interest of time). Amount of Capital to Raise: Very discretionary and it comes down to the company's plans, how many existing shareholders want to sell, whether it's PE or VC-backed, etc. This is often set to 20-40% of a company's value; common to sell ~1/4 or ~1/3 of the company in a public offering, though that also varies. Step 2: Trading vs. Pricing and the Pricing Discount You apply the assumed multiple to the company's relevant metric, so Forward Net Income in this case, which gets you the "Post-Money Equity Value @ Trading." This is what the company's market cap should be after it has raised the capital and is trading on the stock market. So we can then calculate the Post-Money Equity Value at Trading (the market rate) vs. Pricing (the discounted rate that institutional investors get). And then calculate the Implied Offering Price per Share based on this - take this value, subtract the funds raised, and divide by the company's current share count. Step 3: Determining the Primary vs. Secondary Shares and the "Greenshoe" (Overallotment) Provision "Primary Shares" are newly created shares that represent actual capital being raised in the deal - this capital then goes to the company in the form of cash. "Secondary Shares" represent existing investors selling their stakes to new investors (usually large institutions like Fidelity). No capital is raised here. Formulas: Always determine the Primary Shares first, based on the Post-Money Equity Value @ Pricing and/or the amount of capital raisedโ€ฆ and then figure out the Secondary Shares in relation to that. Have to also figure out split between "Base Offering" and "Greenshoe" - "Greenshoe" is an option to issue even more shares if demand is strong enough. Used for cases where the company wants to keep the same offering price, but simply raise more capital if more investors are interested. Very commonly set to ~15% in offerings in developed markets. Step 4: Net Proceeds to Issuer Look at Total Offering Size first (Primary + Secondary + Overallotment) and then subtract out fees. Underwriting Discount: Banks used to, and sometimes still do, buy a portion of the company's stock as "insurance" in case the company can't sell it to anyone elseโ€ฆ so this is supposed to compensate them for the risk of holding the stock temporarily, in case it can't find any buyers. Bigger deal = lower fee % in most cases. % Company Sold: Based on Primary Proceeds and Post-Money Equity Value @ Pricing - how much the company sold of itself just before it started trading publicly. Step 5: Valuation Multiples We move from Equity Value to Enterprise Value as we normally doโ€ฆ but we must factor in the cash raised in the IPO now! Equity Value implicitly reflects this cash, so it must be subtracted when calculating the new Enterprise Value. Would have to compare these multiples to those of the public comps to decide whether or not they look reasonable. RESOURCES: http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.xlsx http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.pdf
CFA Level I Equity Valuation Video Lecture by Mr. Arif Irfanullah Part 2
 
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This CFA Level I video covers concepts related to: โ€ข Price Multiples โ€ข Multiples Based on Fundamentals โ€ข Multiples Based on Comparables โ€ข Enterprise Value โ€ข Assets Based Models For more updated CFA videos, Please visit www.arifirfanullah.com.
Views: 33484 IFT
Double Router Port Forwarding - Port forward through modem and router
 
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Tutorial shows you, how to port forward through modem and router (Double router port forwarding). Demonstration on ZTE modem and LINKSYS router Share this Video: https://youtu.be/ujMnVCnTFvw Subscribe To My Channel and Get More Great Tips: https://www.youtube.com/subscription_center?add_user=krestsss steps to forward ports in a network with more than one router - double port forwarding: First we need to forward the port in router1 to router2's external IP address. The next step is to forward port, from router2 to the device, for which you are opening port, in this example, it is Computer with static IP address. The network devices for which ports are being forwarded need to have a static IP address Useful links: How to change IP address on windows 7, Windows 8, Linux, Android Tablets: https://www.youtube.com/playlist?list=PL3MQlyvH2WI_FW2Juf8uB3embfGF9y3xg How to Setting up wireless router with cable modem - configure router step by step: https://www.youtube.com/watch?v=WYVVVZQCPvg Router Passwords: http://portforward.com/default_username_password/ Port Forwarding Guides http://portforward.com/english/routers/port_forwarding/routerindex.htm Download Network Utilities Bundle. Port Checking Software, Double Router Detectorโ€ฆ http://portforward.com/software/download-instructions/network-utilities/ Feel free to ask me any question!!! Subscribe on YouTube Channel: http://goo.gl/EjTyOO Find me on Facebook: http://goo.gl/op3TUZ Follow me on Google Plus: http://goo.gl/Uvauei Follow me on Twitter: http://goo.gl/gz2V6G This video-tutorial-attempt to answer all below questions port forward through 2 routers port forwarding 2 routers How to port forward behind 2 routers? Multiple router port forwarding Dual router port forwarding
Views: 49068 mmk
Trading Multiple Time Frames
 
09:43
Here's how trading multiple time frames in stocks, futures and Forex can dramatically improve your win/loss ratio. http://www.topdogtrading.net/stock-market-trading Trading multiple time frames is a common practice for those using technical analysis to trade the stock market, Forex, Eminis and other futures markets. It can be used to increase both your win/loss ratio and also your risk/reward ratio. Enjoy the video! Leave your questions and comments below! Make sure not to miss a single video from Barry! Click here to Subscribe: https://www.youtube.com/user/TopDogTrading?sub_confirmation=1 ==================================================== Barry Burns Top Dog Trading TopDogTrading.com Facebook: https://www.facebook.com/TopDogTrading/ Get the Free Trade Strategy: โ€œThe Rubber Band Tradeโ€: http://www.topdogtrading.net/stock-market-trading =================================================== Watch the related video: "How To Do Stock Market Trading: Triple Bottom Chart Pattern." https://www.youtube.com/watch?v=X8useFFQzrc&t=17s --- Risk Disclosure: http://bit.ly/Risk-Disc --- RISK DISCLAIMER: The information contained on this video is for informational and educational purposes only. We are not registered as a securities broker-dealer or as investment advisers, either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Trading and investing involves substantial risk. Financial loss, even above the amount invested, is possible. Seek the services of a competent professional person before investing or trading with money. The information contained on this video, is not provided to any particular individual with a view toward their individual circumstances and nothing in this video should be construed as investment or trading advice. Each individual should assume that all information contained on this site is not trustworthy unless verified by their own independent research. Any statements and/or examples of earnings or income, including hypothetical or simulated performance results, are solely for illustrative purposes and are not to be considered as average earnings. Prior successes and past performance with regards to earnings and income are not an indication of potential future success or performance. You should never trade with money you cannot afford to lose. The information in this video is in no way a solicitation of any order to buy or sell. The author and publisher assume no responsibility for your trading results. This information is provided "AS IS," without any implied or express warranty as to its performance or to the results that may be obtained by using the information. Factual statements in this site are made as of the date the information was created and are subject to change without notice. HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
Views: 40166 TopDogTrading
Enterprise Value (EV) to Revenue Multiple
 
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The Enterprise Value (EV) to Revenue multiple is a valuation metric used to value a business by dividing its enterprise value (equity plus debt minus cash) by its annual revenue. The EV to Revenue multiple is commonly used for early-stage or high-growth businesses that donโ€™t have positive earnings yet. Click here to learn more about this topic: https://corporatefinanceinstitute.com/resources/knowledge/valuation/ev-to-revenue-multiple/
Price-earnings Ratio (P/E Ratio) Explained | Investopedia Academy
 
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The price-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings. The price-earnings ratio is also sometimes known as the price multiple or the earnings multiple. The P/E ratio can be calculated as: Market Value per Share / Earnings per Share Take the Investopedia Academy 'Find Great Value Stocks' course: http://bit.ly/2DNEk6R INVESTOPEDIA ACADEMY is expert instruction from Investopedia. Self-paced, online courses that provide on-the-job skillsโ€”all from the worldโ€™s leader in finance and investing education. Website: https://academy.investopedia.com/ Facebook: https://www.facebook.com/investopedia Twitter: https://twitter.com/investopedia
Views: 45286 Investopedia Academy
12. Hindi: Fundamental Analysis (Nifty Forward PE Calculation)
 
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Having a basic knowledge of Nifty valuations can give us a better idea of whether to invest in the market, or to wait or to sell our stocks. This is because, when the overall market rises, all stocks rise and when the overall market falls, all stocks tend to fall. So, if Nifty or Sensex is looking stretched, it may be fair to assume that high quality stocks and even not so high quality stocks would be trading expensive. On the other hand, if the market crashes, good quality stocks may be available at very cheap valuations automatically. So keeping an eye of Nifty valuations can help us reduce our risk of buying high. Forward valuations are derived from existing Price and EPS data. This also is useful for the same reason i.e. of reducing risk of buying high. Investing is simple. Unnecessarily it is made complicated by vested interests so that common investors always dependent upon them. Education is the only way we can become independent. So keep studying and keep growing. Cheers (Y) Thank you for watching and liking our videos. For online trainings kindly visit: http://www.moneybee.info/moneybee/register.php or call Shailesh on 8600043130 Thank you and Regards Team Money Bee
CFA - Equity Valuation - Understanding Price Earning Multiple (P/E) with Simple Example
 
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To know more about CFA/FRM training at FinTree, visit: http://www.fintreeindia.com For more videos visit: https://www.youtube.com/c/FintreeIndia?sub_confirmation=1 CFA | FRM | CFP | Financial Modeling Live Classes | Videos Available Globally Follow us on: Facebook: https://www.facebook.com/FinTree/ https://www.instagram.com/fintree_education/ Twitter: https://twitter.com/Fin_Tree https://www.linkedin.com/company/fintree-education/ In this video : -Understanding Price Earning Multiple (P/E) with Simple Example We love what we do, and we make awesome video lectures for CFA and FRM exams. Our Video Lectures are comprehensive, easy to understand and most importantly, fun to study with! This Video lecture was recorded by our Lead Trainer for CFA, Mr. Utkarsh Jain, during one of his live Session in Pune (India). To know more about CFA/FRM training at FinTree, visit: http://www.fintreeindia.com
What Does P/E Ratio Tell About a Stock? ๐Ÿ“ˆ
 
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What do traders look for in PE ratios? http://www.financial-spread-betting.com/strategies/price-earnings-ratio.html PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! Does buying at low P/E ratios mean higher returns? What does P/E ratio tell about a stock? As a trader do you want a stock to have a high or low P/E Ratio? PE ratios are the foundations for many fundamental investors decisions. So what do traders actually look for in a P/E ratio. What is is the P/E ratio? This is the price to earnings ratio. You are taking the stock price and dividing it by the earnings per share. A higher P/E ratio is normally overvalued, a lower P/E ratio is undervalued; that is putting things in very simple terms. Different sectors and industries will have different P/E ratios. Its about current P/E ratios to a baseline. P/E ratios also take into account anticipation of future earnings/expectations. If the P/E is low and it has been declining you need to ask yourself why this is happening.
Views: 1918 UKspreadbetting
Stock Valuation Using Multiples | Corporate Finance | CPA Exam BEC | CMA Exam | Chp 8 p 5
 
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This lectures I discuss stock valuation using multiple such as price earning ratio ratio (P/E ratio).
What is EBITDA? Why is an EBITDA Multiple Important in a Company Valuation? Expert St. Louis
 
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http://www.valuationstlouis.com (314) 541-8163 What is EBITDA? Why is an EBITDA Multiple Important in a Company Valuation? St. Louis Sometimes there is confusion about what is EBITDA or earnings before interest taxes depreciation and amortization. Small business owners also want to know why is an EBITDA multiple important in a company valuation? My name is Melissa Gragg and I am a business valuation expert in St. Louis Missouri. Let's start with explaining what EBITDA really is and then we will understand how it's important in determining the value of a company. Many people are familiar with the term EBITDA, a business owner just may not understand the EBITDA calculation. First, you need to start with your earnings, which could also be called net income, income after taxes, profits, profits after taxes. You get the idea, it's basically what you have left over from your company revenues after you take out all of the expenses. Now you want to start to add back some items such as interest on loans or debt and corporate taxes. You also want to add back depreciation and amortization which are basically non-cash expenses. Now you have determined an earnings level which you can compare to other companies in your industry. The point of EBITDA is to eliminate the factors a business owner has discretion over, such as the type of debt financing and capital structure, whether it's taxed as an S-corp or C-corp and if the assets are depreciated using acceleration methods such as Sect 179 depreciation. Once you eliminate some of these items then you can look at you company's EBITDA level and compare it to an EBITDA multiple derived from industry transactions, mergers and acquisitions or industry reports. In the valuation of the company there are many methods to consider and one of them is the market approach. This is the approach that uses various market multiples, basically what companies have sold for in the open market, to determine the value of company and one of them is a multiple of EBITDA. For example, there may be consolidation in your industry and private equity groups or large industry players may pay 6 to 7 times EBITDA. This means that the value of the company would be in the range of six to seven times the EBITDA number. Of course it's not that simple, because a buyer would have to consider many factors in order to determine what they would pay for particular company but it does give the business owner an idea of the range of value. Buyers will also look at adjusted EBITDA, which is calculated by reviewing the financial statements in determining if there are owners discretionary items such as higher salaries for management, perquisites such as cars and any other nonoperating items, such as vacation home expenses or nonrecurring income or expenses such as loss from a fire or income from the sale of an asset. Basically a buyer would look to normalize EBITDA for all of the expenses and/or income, which may not continue into the future. This is why it's not only important to understand what the market multiples or EBITDA multiples are in your industry but also to understand what does your EBITDA look like for this year, in the past and going forward. If you'd like to know more about how to value a company, or if you are selling a business and have some questions about the value give us a call at 314-541-8163 or check out our website at http://www.ValuationStLouis.com
Views: 14164 BusinessValuationStL
Stock Market Valuation -- P/E Multiple and Expected Returns
 
05:01
Determining fair value by first estimating the P/E ratio, or "multiple." How does one estimate "E" when it is volatile and always changing? What is the expected return on stocks when the P/E ratio (as we compute it) is 25 or higher (as at 12/31/13)? Answer: lower than you might think.
Views: 5598 Creekside Partners
CFA Level I Equity Valuation Video Lecture by Mr. Arif Irfanullah Part 3
 
13:50
This CFA Level I video covers concepts related to: โ€ข Comparable Valuation Using Multiples โ€ข Advantages and Disadvantages For more updated CFA videos, Please visit www.arifirfanullah.com.
Views: 21598 IFT
P/E Ratio Explained in Hindi -  What is Price to earning ratio ?
 
08:52
P/E ratio is one of the most used ratios in the stock market that people use to decide which share to buy. P/E ratio will be explained very easily in this video in hindi so that every can understand that what is a pe ratio and how you can use it to buy great stocks in the india share market. This video will be especially helpful for stock market beginners. The 1 Year Investing Course - http://www.finology.in/academy.html See the Shares I have in my portfolio - http://www.finology.in/my-portfolio.html Open an online trading account with Zerodha https://zerodha.com/open-account?c=ZMPXIG Best Books on Investing - Rich dad poor dad (HINDI) - http://amzn.to/2FQTIx0 Learn to Earn - http://amzn.to/2FHrLHx Dhandho investor - http://amzn.to/2BcAqOL Education of a Value investor - http://amzn.to/2D5Vtod
Views: 193905 pranjal kamra
PE Ratio - Price to Earnings Ratio
 
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PE Ratio or Price to Earnings Ratio is explained in hindi. P/E Ratio and EPS (Earnings Per Share) are important metrics to assess the right value of a share or stock. Related Videos: Earnings Per Share (EPS): https://youtu.be/SDXp64flfJI PE Ratio or Price Earnings Ratio เค•เฅ‹ เคนเคฟเค‚เคฆเฅ€ เคฎเฅ‡เค‚ เคธเคฎเคเคพเคฏเคพ เค—เคฏเคพ เคนเฅˆเฅค Share or stock เค•เฅ€ right value เค•เฅ‹ assess เค•เคฐเคจเฅ‡ เค•เฅ‡ เคฒเคฟเค P/E Ratio เค”เคฐ EPS (Earnings Per Share) important metrics เคนเฅˆเค‚เฅค Share this video: https://youtu.be/pmd1kb-D1jE Subscribe To Our Channel and Get More Finance Tips: https://www.youtube.com/channel/UCsNxHPbaCWL1tKw2hxGQD6g To access more learning resources on finance, check out www.assetyogi.com In this video, we have explained: What does PE ratio mean? How to calculate Price to Earnings ratio? What is PE ratio formula? What is Earnings Per Shares? Why EPS is an important metric? What is price per share? What does low P/E and high P/E mean? How to check PE ratio the right way? Why PE is high or low? Is low PE ratio good? How does PE ratio help in stock valuation? How to know if share is expensive or inexpensive? Make sure to like and share this video. Other Great Resources AssetYogi โ€“ http://assetyogi.com/ Follow Us: Instagram - http://instagram.com/assetyogi Twitter - http://twitter.com/assetyogi Facebook โ€“ https://www.facebook.com/assetyogi Google Plus โ€“ https://plus.google.com/+assetyogi-ay Pinterest - http://pinterest.com/assetyogi/ Linkedin - http://www.linkedin.com/company/asset-yogi Hope you liked this video in Hindi on โ€œPE Ratio (Price to Earnings Ratio)"
Views: 24530 Asset Yogi
CFA Level II: Equity Investments - Market-Based Valuation Part I(of 2)
 
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FinTree website link: http://www.fintreeindia.com FB Page link :http://www.facebook.com/Fin... This series of video covers the following key areas: -method of comparables and the method based on forecasted fundamentals as approaches to using price multiples in valuation, and Economic rationales for each approach -justified price multiple -rationales for and possible drawbacks to using alternative price multiples and dividend yield in valuation -alternative price multiples and dividend yield -interpret underlying earnings, explain methods of normalizing earnings per share (EPS), and normalized EPS -justify the use of earnings yield (E/P) -fundamental factors that influence alternative price multiples and dividend yield -justified price-to-earnings ratio (PIE), price-to-book ratio (PIB), and price-to-sales ratio (PIS) for a stock, based on forecasted fundamentals -predicted PIE, given a cross-sectional regression on fundamentals, and limitations to the cross-sectional regression methodology -stock by the method of comparables and explain the importance of fundamentals in using the method of comparables -whether a stock is overvalued, fairly valued, or undervalued based on comparisons of multiples -the PIE-to-growth ratio (PEG) and its use in relative valuation -the use of price multiples in determining terminal value in a multistage discounted cash flow (DCF) model -alternative definitions of cash flow used in price and enterprise value (EV) multiples and describe limitations of each definition -EV multiples and evaluate the use of EV/EBITDA -differences in cross-border valuation comparisons -momentum indicators and their use in valuation -arithmetic mean, the harmonic mean, the weighted harmonic mean, and the median to describe the central tendency of a group of multiples We love what we do, and we make awesome video lectures for CFA and FRM exams. Our Video Lectures are comprehensive, easy to understand and most importantly, fun to study with! This Video lecture was recorded by our popular trainer for CFA, Mr. Utkarsh Jain, during one of his live CFA Level I Classes in Pune (India).
Relative Valuation, Comparable Company Analysis
 
28:05
For details, visit: http://www.financewalk.com Relative Valuation, Comparable Company Analysis: Relative Valuation What is Relative Valuation In relative valuation,we compare a stock's valuation with those of other stocks or with the company's own historical valuations. Idea is similar assets should sell at similar price and relative valuation is typically implemented using price multiplies. Quick and Easy The concept behind relative valuation is simple and easy to understand: the value of a company is determined in relation to how similar companies are priced in the market. Here is how to do a relative valuation on a publicly listed company: โ€ข Create a list of comparable companies, often industry peers and obtain their market values. โ€ข Convert these market values into comparable trading multiples, such as P-E, price-to-book, enterprise-value-to-sales and EV-EBITDA multiples. โ€ข Compare the company's multiples with those of its peers to assess whether the firm is over or undervalued. โ€ข Example: WIPRO & Infosys If Wipro has a P-E ratio of 16 and Infosys has average P-E of 26 and the average for the industry is closer to, say, 25, Wipro's shares are cheap on a relative basis. You could also compare Wipro's P-E with the average P-E of an index, such as the SENSEX or Nifty, to see whether Wipro still looks cheap. Price-Earnings Ratio (P-E) = Market Price Per share - Earnings Per Share โ€ข PE is the ratio or the multiple โ€ข It tells you how much investors are willing to pay for every unit of the EPS. It also tells you whether the stock is undervalued, overvalued or fairly valued. โ€ข Trailing PE, Forward PE are used to estimate the price of the stock โ€ข Reverse of PE is called Earnings yield. โ€ข It is the most popular ratio in relative valuation โ€ข PE should be compared with its peers in the same industry โ€ข PE can also be compared with the company's track record.
Views: 14436 FinanceWalk
Stock Valuation: How to Understand the P/E Ratio (Dispatch 1)
 
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What is the P/E ratio? What's it used for and how do I even interpret it? Are there any shortfalls of using the P/E metric? Great questions. I address all of these issues in this episode. Too often we reduce the P/E ratio down to a simple math equation, but there are a lot of other nuances and dimensions that ought to be considered. Ever thought about the critical distinction between historical and forward P/E or why two companies in the same industry with similar competitive dynamics may suddenly trade at dramatically different multiples? (Q1 Answer: historical P/E utilizes past earnings whereas forward P/E uses future expected earnings either using your own estimates or Wall Street's estimates known as "consensus." Q2 Answer: perhaps one of the companies is anticipating a dramatic increase in forward earnings over the next few years, therefore warranting a different valuation). Remember, this particular multiple is just ONE apparatus, among many, to gauge the "expensiveness" or "cheapness" of a particular company. It's not an exhaustive measure of a company's valuation. It has its uses and limitations. To use a medical illustration, you wouldn't diagnose a serious disease based upon a quick temperature-check alone. There are blood cultures, x-rays, and CT scans to be done in order to arrive at an informed conclusion. It's the same thing with identifying a company's value. โ–บ NAVIGATION 0:16 - How to calculate the P/E ratio. 1:24 - Breaking down the (E) in P/E; you must identify when the earnings were, or are anticipated to be, generated! 3:06 - What does the P/E multiple even mean? Broadly speaking, we can extrapolate 3 things. 6:16 - Interpreting & utilizing the P/E multiple requires nuance. Use historical and forward P/E together. 9:18 - A critical shortfall of the P/E multiple. โ–บ PODCAST Podcast: http://bit.ly/2XCwXpe โ–บ CONNECT WITH US Instagram: www.instagram.com/getbread_official Facebook: www.facebook.com/justmakinbread Twitter: https://twitter.com/justmakinbread Credits: Music: [Cosimo Fogg (201)] https://soundcloud.com/cosimo-fogg/jazzaddicts-intro; [VII ์ดˆ] https://soundcloud.com/viisecs/lo-fi Disclaimer: The opinions expressed in this episode reflects the opinions of the presenter at the time they were made and are subject to change at any time after the date of the episode's production without notice. These opinions are not intended to be a forecast of future events, a guarantee of future results, or investment advice. This YouTube channel is for educational purposes only. While the statements made in this YouTube episode is based on publicly available information and is believed to be accurate as of the date given, no representation is made with regard to its accuracy or completeness. This YouTube channel and the affiliated content are neither an offer, nor a solicitation, to buy or sell securities. The presenter and its affiliates may directly hold securities mentioned in this material. Please do not make any investment decisions based on the content provided here without first rigorously doing your own research or consulting a financial adviser.
How to Pick the Terminal Multiple to Calculate Terminal Value in a DCF
 
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Youโ€™ll learn how to select a Terminal Multiple for use in a DCF in this lesson. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" This training includes how you can check the long-term Free Cash Flow growth rate implied by the Terminal Multiple, how to use data from the comparable public companies, and how to draw conclusions about your analysis with these formulas. Table of Contents: 2:16 Why Most Sources Get This Explanation Wrong 6:33 How to Determine the Growth Rate Implied by a Terminal Multiple 14:46 How to Use the Implied Growth Rate in a DCF 17:09 Conclusions From This Analysis 20:03 Summary Lesson Outline: How Do You Pick the Terminal Multiple in a DCF? Idea: For the Terminal Value, you need to estimate the company's value in the "far future" periodโ€ฆ what are all those cash flows worth if you go past Year 5 here, or if you go past Year 10 in a 10-year model? Two methods: the Multiples Method, where you assign an EBITDA multiple to the final year EBITDA, assume the company gets sold, and value it like that; or the Gordon Growth or Perpetual Growth or Long-Term Growth Method, where you assume it operates indefinitely. Need to make sure both methods make sense by themselves, and that the implied multiple and the implied growth rate from both methods seem reasonable. The Multiples Method โ€“ Selecting a Multiple You might START by getting the median EBITDA multiple or range of multiples from the set of public comps, and then applying them to this companyโ€™s appropriate figure in the final projection yearโ€ฆ BUTโ€ฆ You generally want to assume a discount over historical multiples, and even over forward multiples. Why? 1. Multiples generally decline over time as companies get bigger and growth slows down, so investors won't pay as much. 2. The "Terminal Multiple" must imply a reasonable Terminal Growth Rateโ€ฆ if you get something like a 10% FCF growth rate implied by your Multiple, you should be VERY suspicious - no company has ever grown at that rate for decades! (Of course, this also depends on the discount rate - with a higher discount rate, higher growth might be justified.) 3. You also care more about the RANGE of Terminal Values and implied Enterprise Values from a RANGE of reasonable multiples (ex: 25th to 75th percentile of comps, modestly discounted). How do you get the implied Terminal Growth Rate from a Terminal Multiple? Implied Terminal Growth Rate = (Terminal Value * Discount Rate โ€“ Final Year FCF) / (Final Year FCF + Terminal Value) Derivation: Please see the PowerPoint slides or PDF at the top. You start out with the familiar Terminal Value formula, Final Year FCF * (1 + Growth Rate) / (Discount Rate โ€“ Growth Rate), and then use algebra to get the Growth Rate on one side of the equation. You have to go through a few steps to do this, but itโ€™s fairly simple algebra. How do you decide if this is an โ€œappropriateโ€ implied Growth Rate? It should ideally be LESS than the GDP growth rate of the country this company is in, which means a very low percentage in most developed countries (e.g., less than 3% in the US) because all companies slow down to the rate of growth of the overall economy, or less, in the long-term. You could also look at the expected long-term FCF growth rates of comparables, or the growth rates implied by their multiples. Some people also use other macroeconomic indicators like the inflation rate as a guideline. Conclusions From This Analysis: The baseline multiple of 5.9x we used isn't "wrong" necessarily, but we should probably project further into the future and create a 10-year DCF because the NPV of the Terminal Value comprises over 70% of the total implied value right now โ€“ it should ideally be ~50% or less. We should also probably pick narrower ranges for these tables โ€“ 4.5x to 8.5x is too wide a range and may not even be meaningful. Andโ€ฆ the company was almost certainly overvalued at the time we did this analysis, since nearly all the values were below the current share price of $17.87. We only get values above $17.87 if the assumptions are *very* optimistic, indicating that the company is overvalued or that our assumptions such as the discount rate are incorrect. http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-07-Terminal-Multiple-DCF.xlsx http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-07-Terminal-Multiple-DCF.pptx http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-07-Terminal-Multiple-DCF.pdf
Price Earnings (P/E) Ratio
 
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This video discusses the Price-Earnings Ratio. The Price-Earnings, which is also known as the P/E Ratio or the Price to Earnings Multiple, is calculated by dividing a company's market value per share by the company's earnings per share. To find the market value per share for a publicly-traded company, you just look up the company's stock price. The earning per share can be either the earnings per share for the past 12 months (if you use this, the ratio is called a trailing P/E Ratio) or the earnings per share expected to occur over the next 12 months (if you use this one, the ratio is called a forward P/E Ratio). If a company has a stock price of $80 and earnings per share of $4, the P/E Ratio is 20. People would say the company trades at twenty times earnings, which means one dollar of earnings "costs" twenty dollars. Two companies might have different P/E Ratios if they have different levels of risk (i.e., if one company has a higher cost of equity capital) or if one of the companies is expected to grow at a faster rate. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like Edspira on Facebook, visit https://www.facebook.com/Edspira To sign up for the newsletter, visit http://Edspira.com/register-for-newsletter Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin To follow Michael on Facebook, visit https://www.facebook.com/Prof.Michael.McLaughlin
Views: 1705 Edspira
Value Investing Rules: How To Use The PE Ratio To Pick Stocks
 
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For more trading and investing ideas visit: https://research.jbmarwood.com https://jbmarwood.com The full course contains 10 rules for value investing and includes over 2 hours of HD video content, 40 lectures and support. Each rule makes up a sophisticated investing strategy that is tested on historical stock market data. Rule 3 of the strategy concerns the PE ratio. Learn how to use the price-earnings ratio to select deep value stocks and gain the most from your investments. Trading stocks is difficult but this course on value investing makes it simple.
Views: 94080 Joe Marwood
REIT Valuation: Crash Course
 
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In this tutorial, youโ€™ll learn how REITs operate, how to create simple 3-statement projection models for them, how to extend the projections into a DCF analysis, and how to complete a Net Asset Value (NAV) model and use Public Comps to value a REIT. https://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" Table of Contents: 2:14 Part #1: Basic Characteristics of REITs and U.S. GAAP vs. IFRS 6:17 Part #2: Simple Projection Model for a REIT 12:00 Part #3: Extension of the Projection Model into a DCF for a REIT 16:03 Part #4: Net Asset Value (NAV) for REITs and Public Comps 19:40 Recap and Summary Resources: https://youtube-breakingintowallstreet-com.s3.amazonaws.com/REIT-Valuation-Slides.pdf https://youtube-breakingintowallstreet-com.s3.amazonaws.com/REIT-Valuation-Example.xlsx Lesson Outline: To value REITs simply and effectively, you must understand how they operate, their special requirements, and the differences between U.S. GAAP-based and IFRS-based REITs. REITs buy, sell, develop, and operate properties or other real estate assets. They must distribute a high percentage of Net Income in the form of Dividends (90% in the U.S.), and high percentages of their revenue and assets must come from real estate. In exchange, they pay no corporate income taxes (or greatly reduced corporate taxes). REITs are always maintaining, acquiring, developing, renovating, and selling properties, and since they distribute so much Cash, they constantly need to raise Debt and Equity to operate. The Gains and Losses on property sales make Net Income fluctuate, so you look at alternative metrics, such as Funds from Operations (FFO) or EPRA Earnings, when analyzing REITs. Funds from Operations (FFO) = Net Income + RE Depreciation & Amortization + Losses / (Gains) + Impairments. Under U.S. GAAP, REITs depreciate properties and record a huge Depreciation expense on the IS; under IFRS, they revalue properties constantly and record huge Fair Value Gains and Losses instead. Also as a result of that, Book Value is important and meaningful for IFRS-based REITs but must be adjusted significantly for U.S.-based REITs. To project a REITโ€™s statements, you start by projecting its โ€œsame-storeโ€ (existing) properties by assuming rental growth and margins. Then, assume acquisition, development/redevelopment spending, a yield on spending, and margins there, and assume something for dispositions and the lost revenue and operating income. Add up all the property-level revenue and expenses, and then project corporate items such as Depreciation, Maintenance CapEx, and SG&A with traditional percentage approaches. Make Dividends a % of FFO, AFFO, or EPRA Earnings, and assume Debt and Equity issued based on the REITโ€™s Cash before financing vs. its minimum Cash balance. To value a REIT with a DCF, extend these projections, factor in all CapEx and Asset Sales, as well as Stock Issued, and project revenue, margins, D&A, CapEx, and Asset Sales through a 10-year period. Calculate and discount Terminal Value the normal way, discount and sum up the Free Cash Flows, back into the Implied Equity Value and divide by the share count (current + future shares to be issued) to get the Implied Share Price. The DDM is similar, but you use Cost of Equity instead of WACC, Equity Value-based multiples for the Terminal Value, and you discount and sum up Dividends rather than Unlevered FCF. To calculate NAV for U.S.-based REITs, project the 12-month forward Net Operating Income from properties, divide it by an appropriate Cap Rate or Yield (based on similar transactions or companies in the market), and then take the market value of the other assets and add them up. Then, adjust the Liabilities, and subtract them from the market value of Assets to determine Net Asset Value; divide by the share count to get NAV per Share and compare it to the Current Share Price. Public Comps are similar, but the screening criteria are usually Real Estate Assets, Geography, and Sub-Industry. You can use traditional metrics and multiples like EBITDA and EV / EBITDA, but youโ€™ll also use alternative ones such as FFO, P / FFO, NAV, and P / NAV, and, for IFRS-based REITs, Book Value and P / BV. To find the data, you can use โ€œRelated Companiesโ€ on Google Finance, get the assumed growth rates for the projections from sources like Yahoo Finance, and go from there.
Comparable Company Analysis
 
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A basic tutorial on how the logic of how a Comps Analysis works. Great for anyone interviewing for investment banking. Find model on ValuationUniversity.com
Views: 28205 Valuation University
How to trade when multiple timeframes are in conflict
 
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For free trading education go to http://www.tradingwithrayner.com Iโ€™ve got a question recently by one of you askingโ€ฆ โ€œHow do you trade when multiple timeframes are in conflict?โ€ Now, Iโ€™m sure this is a question you can relate to. Imagine: Youโ€™re looking to long on the Daily timeframe (perhaps there is a bullish setup). But on the weekly timeframe, the market is in a downtrend. So, what do you do? Do you still go long? Do you go short? Or stay out? And this is what youโ€™ll learn in todayโ€™s episode โ€” how to trade when there are conflicting timeframes in your trading. So, click below to watch it right nowโ€ฆ Then go read this post on how to use multiple timeframes analysis in your trading. http://www.tradingwithrayner.com/trading-multiple-timeframes/ Do you have a question for me? Just let me know in the comments section below and Iโ€™ll do my best to help. I look forward to hearing from you :) For free trading education go to http://www.tradingwithrayner.com Thanks for watching! FOLLOW ME AT: Facebook: https://www.facebook.com/groups/forextradingwithrayner Twitter: http://www.twitter.com/rayner_teo My YouTube channel: https://www.youtube.com/tradingwithrayner
Views: 42203 Rayner Teo
CFA Level 2 (2019): Private Equity Valuation - The Venture Capital Method (Part 1)
 
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In this video, we illustrate the venture capital method with one round of financing to compute: 1) Post-money valuation 2) Pre-money valuation 3) Percentage ownership held by VC 4) Number of shares held by VC 5) Price per share paid by VC In the next video, we perform the same computations for two rounds of financing. Part 2 Link - https://youtu.be/gxhCvMeFNbQ
Views: 255 Fabian Moa
How to Value a Stock with This Simple Model
 
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Learn how to value a stock with this simple stock valuation model in Google Sheets. I will explain one way how to value a stock, analyze three stocks using this spreadsheet model, and teach you how to build this value stock model for yourself. Subscribe here for more content: http://bit.ly/SubscribeMichaelJay Join my private email list here: https://michaeljay.teachable.com/p/michael-s-private-investor-email-list/ This is a value-packed video for you so I have added some navigation timestamps you can use for future reference. You will get the most value out of the video if you are able to fully watch until the end and learn how to build and use the model for yourself. Part 1: Model Explanation 00:00 Model context 01:03 Model introduction and explanation 03:21 Mini-lesson on discounting cash flows 04:31 Notes on model inputs Part 2: Using the Model to Value Stocks 05:29 Analyzing and valuing Facebook stock (FB) 06:22 Understanding growth rate assumptions 07:34 Analyzing and valuing GameStop stock (GME) 08:33 How to test for a margin of safety 09:49 Analyzing and valuing Newell Brands stock (NWL) Part 3: Building the Model 10:59 How to build the model yourself 11:40 Setting the years 12:06 Calculating the future earnings 14:22 Calculating the discounted earnings 17:36 Checking your model 18:11 What to do if you need help? Link to my Private Stock Portfolio video mentioned: https://youtu.be/35BcPMkBQjE OTHER CONTENT YOU MAY ENJOY BELOW // Value Stocks I'm Watching Series In this series, we will be focusing on value stocks that appear to offer significant upside for long term investors. https://www.youtube.com/watch?v=xuujRm10u-Q&list=PLNtmr_AnnWdxrbFd9ODrTOn8ie-3hBldP&index=1 // Stock Market News Series In this series, we cover the latest stock market investment news and break down what it means for each stock going forward. https://www.youtube.com/watch?v=n1fiAotdRJQ&list=PLNtmr_AnnWdwgKNdPYAT9Zaeije6766b5&index=1 // #10to10Kchallenge - My Public Stock Portfolio Want to grow your investment accounts? Join me as I take the #10to10Kchallenge and grow my Robinhood investment account from $10 to $10,000, build a portfolio of value stocks, and document the entire process for you to see! https://www.youtube.com/watch?v=0hAjDu8NZn4&list=PLNtmr_AnnWdyATMMH5B-MAFWqicUb5zFj&index=1 // Open a Free No-Commission Stock Account If you are looking to open a stock trading account to begin investing, I highly recommend starting with Robinhood as they offer free stock trading. Unlike traditional brokers, they do not charge commission on trades or require a minimum account balance. Get a free stock on Robinhood (Affiliate Link): http://bit.ly/FreeStockFromMichael If you are reading this, you should join my private investor email list in the link at the top of the description. If you join that list you will have access to all the free courses that I am working on, when they are available, as well as significant savings on any advanced courses I make in the future. DISCLAIMER: This video is a resource for educational and general informational purposes and does not constitute actual financial advice. No one should make any investment decision without first consulting his or her own financial advisor and/or conducting his or her own research and due diligence. There is no guarantee or other promise as to any results that may be obtained from using this content. Investing of any kind involves risk and your investments may lose value. CREDITS Outro: https://soundcloud.com/kevatta/vibin-kevatta-x-saib Saib: https://soundcloud.com/saib_eats Kevatta: https://soundcloud.com/kevatta
Comparing Companies with Relative Valuation & Graphing
 
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Using the Bloomberg terminal to compare financial data for two or more companies. Designed especially for students in Penny Abernathy's Digital Media Economics class at UNC's School of Journalism and Mass Communication.
Views: 3538 UNCParkLib
Risk Management Lessons from a Proprietary Derivatives Trading Firm
 
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Tom Hutchinson, President of Belvedere Trading, discusses the key risk management lessons from his career, including: rolling the dice to playing it safe - rewards and responsibilities dictate decisions; haircuts, margin, and risk - evaluating risk takes several approaches; and system failures and fraud - preparing for the unexpected. Learn more about GARP Chapters: http://bit.ly/1l7ZOO8 Click here http://bit.ly/1l7ZUVW for more GARP Chapter Meeting presentations.
Views: 5941 GARPvideo
How to back test a manually traded strategy using TradingView
 
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For more info on my trading see my trading blog at http://www.davetromp.net Checkout the following links to trade like I do: My Method: http://davetromp.net/method Learn the method I use to trade. My Charts: http://davetromp.net/charts Use the charting platform I use. My Broker: http://davetromp.net/etoro Use the broker I use and follow along with my trades. Updated video: https://www.youtube.com/watch?v=tzhvVtsxDyQ Trading is hard. It takes a lot of practice. One way to practice and build skill and confidence is to backtest a system over and over again. In this video, I show you how I do this using online charts from Tradingview. You could also use MT4. This is a nice online alternative to charting with Metatrader. Post on my blog: https://www.davetromp.net/2015/08/how-to-back-test-manually-traded.html Updated video: https://youtu.be/tzhvVtsxDyQ For more info on my trading see my trading blog at http://www.davetromp.net Checkout the following links to trade like I do: My Method: http://method.davetromp.net Learn the method I use to trade. My Charts: http://charts.davetromp.net Use the charting platform I use. My Broker: http://broker.davetromp.net Use the broker I use and follow along with my trades. Trading Crypto: http://crypto.davetromp.net Buy Crypto Currencies like I do. Trading Gold Money: http://gold.davetromp.net Buy Gold and Silver like I do.
Views: 36308 Dave Tromp
Session 20: Private Company Valuation
 
01:25:05
In this class, we looked at valuing private companies, starting by listing the key differences between public and private companies in information available. We then talked about why motive matters in private company valuation, and why the value attached to a private business can be very different for a private (undiversified) buyer, as opposed to a diversified investor. We also talked about adjusting cash flows for owner salaries and key person discounts. Finally, we examine the consequences of illiquidity for pricing/valuing private businesses, and looked at approaches to estimating an illiquidity discount. Start of the class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/pvtcotest.pdf Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr19/session20slides.pdf Post Class Test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session21Atest.pdf Post Class Test Solution: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session21Asoln.pdf
Views: 1211 Aswath Damodaran
Tesla Stock Analysis - What is the Fair Value of Tesla's Stock?
 
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In this video we analyze Tesla's stock to see if TSLA is worth buying today. We look at Tesla's free cash flow and earnings to see if Tesla's is worth buying today. โ˜…โ˜†โ˜… Subscribe: โ˜…โ˜†โ˜… https://goo.gl/qkRHDf Investing Basics Playlist https://goo.gl/ky7CJq Investing Books I like: The Intelligent Investor - https://amzn.to/2PVhfEL Common Stocks & Uncommon Profits - https://amzn.to/2DAV8h9 Understanding Options - https://amzn.to/2T9gFSp Little Book of Common Sense Investing - https://amzn.to/2DfFGG2 How to Value Exchange-Traded Funds - https://amzn.to/2PWSkRg A Great Book on Building Wealth - https://amzn.to/2T8AKZ1 Dale Carnegie - https://amzn.to/2DDAk8w Effective Speaking - https://amzn.to/2DBncAT Audible Membership I Use (Audio Books): https://amzn.to/2LCorAY Equipment I Use: Microphone - https://amzn.to/2T7JxL6 Video Editing Software - https://amzn.to/2RQM1vE Thumbnail Editing Software - https://amzn.to/2qIUAgP Laptop - https://amzn.to/2T4xA8Z DISCLAIMER: I am not a financial advisor. These videos are for educational purposes only. Investing of any kind involves risk. Your investments are solely your responsibility and we do not provide personalized investment advice. It is crucial that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments. Please consult your financial or tax professional prior to making an investment. And it reaffirms our belief that free cash flow is going to be very volatile going forward and will be very difficult to use free cash flow to try to value Tesla's stock. So what else can we use. We can't use price to earnings because they're not profitable. They don't have a dividend so we can't use a dividend discount model. So. We could get away with doing price to sales but I think that price to sales is a fairly weak method of coming up with the valuation because it doesn't count for any profit margins. So I think that one choice that does make some sense is to use enterprise value to EBITDA. This is a chart of EBITDA going back to 2009 and as we could see in 2018 EBITDA turned significantly higher. And when we add the last 12 months what we can see that it still seems to be moving higher. Now the last twelve months is really just a way to include the first quarter in that in that. So even down there adds the first quarter of this year and the last three quarters of last year and we end up with the last 12 months. But in the first quarter of this year it did improve over the first quarter of last year. So I expect EBITDA to stay positive. So once again I'll have videos on Enterprise Value to EBITDA as soon as we start a valuation since. But for now let's look at the next four quarters of according to analyst estimates for EBITDA and we get an expected EBITDA of about three billion dollars. We take the current enterprise value. There's a calculation for that of about fifty nine billion. We divide that by EBITDA and we end up with a forward Enterprise Value to EBITDA of about 17 x. Now here's the real issue. It's currently 17x but what should it be. We can't use peers. General Motors has a forward even even down multiple of slightly less than 3x. Ford is right around the same thing. Fiat Chrysler is less than 2x so we can't even use Tesla's historical EV/EBITDA average because as we see the EV/EBITDA our numbers have been quite volatile in recent history. So the best I could come up with was to find as many analysts as I could that they had reports and that they published what they use what multiples that they used. And from what I can find it seems that 16x would be a reasonable number to use. And since that's less than the current level of 17x well right away we know that the value of Tesla's stock is going to be too high right now. So at 16x the fair value of Tesla stock would be about two hundred dollars per share and still Tesla's stock is currently trading at about 240 dollars per share. Now if you happen to see my recent video on when to buy a stock well you may have heard that typically I think it's smart to apply a personal whatever a personal margin of safety is to any fair value calculation and we should base that on our confidence level in that calculation. And for me on a personal basis well I have very little confidence in this calculation. It's the best we could come up with given the limited choices. But ultimately this means for me that I can't buy Tesla stock which is a shame because I actually think that there's a pretty good chance that Tesla stock will move higher. And that's because of their general awesomeness of their products. And I'm a firm believer in what Tesla is doing with to the car market. I think that what they're doing with electric cars with the doing with solar city is the future. The question the questionable part from me with all of this is how long before it becomes part of the mainstream future. #LearnToInvest #StocksToWatch #StockMarket
Views: 27113 Learn to Invest