How to Value Stock

Posted by sanjay.j | 9:26 PM | | 0 comments »

Financial analyst employ various method to value the stock.These method usually involve mathematical formula by which one could get the value of a stock as general impression.Here complex method are also employed. Some use software program to get a accurate value of the stock. This method helps in estimating the precise value of stock which is helpful in earning more profit.. Looking on to the complex process it may  consider stock risk, consume more time, book value, rate of return, dividend-etc.
Basic ABO Model for Valuing Stock
Dividend, book value, time, rate of return,future earning and risk are taken into account in predicting the stock value.
The Risk Proxy EB You'll Model for Valuing Stock
In this method they take proxies and ignore the risk  whereas in other method they take into account the risk. The number of analyst covering a stock, debt to market ratio, variation in estimated earnings, high market capitalization are considered in determining the stock value.
Levered Beta EBO Model for Valuing Stock
This method involve all the criteria involved in the previous method in other word exactly same as of the above said method. In addition to it debt level are taken in to account.
PEG Value Method for Valuing Stock
Among all method so far considered  this method is very simple to follow. Here the ratio of growth rate of stock and ratio of rate per earning are considered in determining the price stock.The company earnings are divided by number of outstanding stocks which gives the earning per share number in turn divided by the current price of a stock were the net  price per earning is obtained.
Forward P/E Value Method for Valuing Stock
This is the popular method followed by the financial analyst .The concept  underlying it is that the P/E value are constant for a stock, so you can easily compare the current P/E with projected P/E .The net result you find from this  will be useful for upcoming years.

0 comments