I have put together an overview of how stocks are valued using fundamental valuation methods.
PDF version of this ebook: An Introduction to Stock Valuation
To run a valuation on a company try it here Get a valuation report
Background:
“Risk comes from not knowing what you are doing.” – Warren Buffet
Buying stocks without understanding their value is like buying a (car, set of golf clubs, vacation) without asking the (price, model, location) first. How do you know you are getting a good deal if you don’t know the value?
This e-book is an overview of valuation. Its purpose is to help you understand how to value stocks. Picking stocks, once you know this, is an easier process as it gives you a level of confidence that you are purchasing stocks that have a value you have determined based on the risks you understand.
The material can be a bit dry at times; we’ll try and keep it light.
Who should read this book?
This book is an introduction to valuation so there is some level of understanding that will be needed (and can easily be obtained). The book is of value:
– If you are investing but are not sure how the stocks you own are valued
– If you are aware of financial statements, may recognize Revenue and Net Income but not much else and want to expand that knowledge as it pertains to the Stock Market
There are many other parts to understanding what stocks to buy (or sell) and we will cover some of those in future editions, specifically analyzing a company’s financial statements and ratios to understand what risks we need to be aware of (does the company have too much debt compared to its industry, does the company face a liquidity crunch in its short term financing…) We do touch on ratios here and introduce some limited financial statement analysis.
About the Author:
Brian is the President of StockCalc (www.stockcalc.com) a fundamental valuation website for retail Investors and Investment Advisors. Brian is a Chartered Business Valuator (CBV), a Canadian valuation designation (www.cicbv.ca)
The full PDF version is available here – no email required. Feedback is very much appreciated.
PDF version of this ebook: An Introduction to Stock Valuation