METHODS OF APPRAISAL SIMPLE STOCKS

If you have participated in securities investment, the formula for determining stock value is required for investors to understand. Since then, making investment decisions, if the selling price in the market is significantly lower than that valuation, then wait and sell when the price is close to the real value and profit.

What is stock valuation?
Valuation of stocks means finding the real or intrinsic value of a security. Or roughly understand, we evaluate how much money that stock is worth.
Then, we will proceed to buy the stock if its price is significantly lower than its valuation. For example, we value Vinamilk milk stock (code VNM) worth 200,000 VND, but when we sell on the market 150,000 VND, we buy VNM shares and wait until VNM reaches 200,000 VND, we will sell and enjoy profit.
This is like setting a price for a land or a motorbike. For example, SH car is worth 75 million VND, Wave car is 20 million VND. If someone SH sells 40 million, we buy it, and will sell it later; And if someone buys Wave for 40 million, we sell it (if we own the Wave) and we get a profit from that investment.

Real value is the value that must be calculated through stock valuation methods.
Market price is the price that investors buy and sell on the current market through the stock exchanges of HOSE, HNX, UPCOM… All transactions are done online.
Normally, the real market value will be approximately equal to the market price (called the efficient market), but still a few, 5% -20% will have a real value greater or less than the price. market. When:
Market price> = Real value: We do not buy and sell stocks
Field value <Significant actual value, we will proceed to BUY.

Note on stock valuation formula

Before going to the details of stock valuation formulas, investors should pay attention to the following:
There is no single, most accurate formula for valuation of all stocks or companies.
Because: Each type of business, every business cycle, each macro condition, future orientation, internal corporate strength, investor capacity gives a different value. And sometimes there are businesses that just cant price it - stay away!
That is why, a novice investor in fundamental analysis or reading this book is very susceptible to confusion among the great masters, each valuing one style; Along with that is a myriad of philosophical standards for pricing.

Buffett: "Someone who thinks that being able to value all companies is an illusion."
However, we can choose each segment that suits us and set the price. Just as it is not possible to judge a fish by its climbing ability. Pele, Messi, Ronaldo are valued based on their ability to kick the ball, not on the ability to play basketball or tennis.
So when we value it, we cannot just give P / E, P / B, growth rate, ROA, ROE, and discount the cash flow.
If it is so simple, perhaps those who study economics, finance, or mathematics will be the world champions; but it is not really the case. Many famous value investors come from Medicine and Pharmacy, Philosophy, Chemistry, General or just graduated 12/12 ... are master value investors, I can name a few famous investors in their number.
So stock valuation does not necessarily have to know how to value all stocks, just choose 1 or a few segments to play and you will have a lifetime of fish.
For new investors, instead of trying to make money by investing in stocks, invest in yourself.

Stock valuation methods / formulas.
• Valuation of shares according to P / E method.
• Valuation of shares according to P / B method.
• Valuation of shares according to the dividend method, valuation by the method of discounting the dividend stream.
• Valuation of shares by cash flow discount method.
• Stock valuation according to EV / EBIT, & EV / EBITDA method.
• Valuation of shares according to P / S method
• Valuation of shares according to PEG method
• Valuation method according to the Benjamin Graham formula

Equity valuation formula that Peter Lynch & John Neff use - a combination of dividend, growth rate & P / E
Enterprise evaluation methods such as ROE index, ROA index, Debt, Inventory, accounts receivable, products, competitive advantage ...

Unit providing stock price appraisal services

Valuation and stock valuation services are one of the specialized areas of Indochine International Investment & Appraisal JSC. We are always confident with our strengths such as: with many years of experience, abundant data warehouse, a large team of highly qualified appraisal experts, fast, tight, dark appraisal process. reducing appraisal costs… Indochine International Investment & Appraisal Joint Stock Company will provide customers with highly reliable information about the value of real estate for each appraisal purpose.