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stock value versus intrinsic value

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Market Value vs Intrinsic Value of a stock

January 10, 2015

To better understand what “intrinsic value” is for a stock, let’s first look at the stock’s price-earnings ratio , sometimes referred to as the PER, the P/E ratio or just the P/E. The price (P) in the numerator refers to the price of the stock. The earnings (E) in the denominator refers to the earnings…

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In the context of valuing companies, and sharing those valuations, I do get suggestions from readers on companies that I should value next. While I don't have the time or the bandwidth to value all of the suggested companies, a reader from Iceland, a couple of weeks ago, made a suggestion on a […]
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Data Update 4 for 2024: Danger and Opportunity - Bringing Risk into the Equation! January 28, 2024
In my last data updates for this year, I looked first at how equity markets rebounded in 2023, driven by a stronger-than-expected economy and inflation coming down, and then at how interest rates mirrored this rebound. In this post, I look at risk, a central theme in finance and investing, but one that is surprisingly […]
Data Update 3 for 2024: Interest Rates in 2023 - A Rule-breaking Year! January 25, 2024
In my last post, I looked at equities in 2023, and argued that while they did well during 2023, the bounce back were uneven, with a few big winning companies and sectors, and a significant number of companies not partaking in the recovery. In this post, I look at interest rates, both in the government […]
Data Update 2 for 2024: A Stock Comeback - Winning the Expectations Game! January 17, 2024
Heading into 2023, US equities looked like they were heading into a sea of troubles, with inflation out of control and a recession on the horizon. While stocks had their ups and downs during the year, they ended the year strong, and recouped, at least in the aggregate, most of the losses from 2022. That […]
The School Bell Rings: Time for Class! January 11, 2024
Continuing an annual ritual of long standing, ahead of starting my spring teaching at NYU starting in a couple of weeks, I would like to invite you, if you are interested, to come along for the ride. I know! I know! Most of you are not enrolled at NYU, paying nosebleed prices, and that is […]
Data Update 1 for 2024: The data speaks, but what does it say? January 5, 2024
In January 1993, I was valuing a retail company, and I found myself wondering what a reasonable margin was for a firm operating in the retail business. In pursuit of an answer to that question, I used company-specific data from Value Line, one of the earliest entrants into the investment data business, to compute […]
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Can one person make a difference to the value of a business? Of course, and with small businesses, especially those built around personal services (a doctor or plumber’s practice), it is part of the valuation process, where the key person is valued or at least priced and incorporated into valuation. While that effect tends […]

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