Si no recuerdo mal para el cálculo de su fair value hace la media aritmética de los fair values que obtiene de cuatro fuentes (Morning Star, Value Line, S&P Capital IQ y otro más que no me viene a la memoria)
Las que está suscrito (la que se quitaría si tuviera que hacerlo es Morningstar): I do subscribe to F.A.S.T. Graphs, M* and Valuentum.
“Value Line, S&P Capital IQ, Jefferson Research, McLean Capital Management”. Value Line is free at the library. Many libraries allow you to access VL online.
"I look to Morningstar, S&P, F.A.S.T. Graphs and Value Line for their valuations and then look for consensus.
I’m not smart enough to determine my own valuation, so I look for consensus for those who do it for a living.
For example, when I look at JNJ, a company I added to recently;
M* had JNJ selling at a 2.4% premium to fair value.
S&P said they were selling at fair value.
Value Line had them at a relative PE of .90 and 1.00 is fair value. So, they had JNJ selling at a discount to fair value but that report was in November when the price was at $101.45. Today’s price would have JNJ about at fair value.
When I look at a 10 year chart on F.A.S.T. Graphs, they show a normal PE of 19.6 and I belive the PE is around 18.8 currently, so they think JNJ is selling at a slight discount.
I consider JNJ a core holding and I don’t plan on selling shares in core holdings, so capital appreciation doesn’t carry the weight for me that it does for others. If I’m not going to realize the capital gains, and I stay focused on the income, then I am willing to pay up to a 5% premium to own a core position. Therefore, JNJ was a buy for me and I took it to a double sized position.
The point is, all 4 sources of valuation agreed that JNJ was selling less than a 5% premium, my ceiling. They all could be wrong of course, and price may fall with the market, but I am comfortable with the valuations at this time.
If a company isn’t a core position, then I usually wait until I get consensus that a company is selling at a double digit discount to fair value. This is important at that time because I will realize cap gains from non-core positions and hope to harvest profits from them to build my core."
-Más ejemplos, cuando las valoraciones difieren bastante:
" I’m not so sure using just one source for fair value is the prudent thing to do. I often see where M* and S&P Capital IQ, which is the data that is supplied to F.A.S.T. Graphs, are not in agreement.
For example, M* says KO is selling at an 8.6% discount to fair value and S&P says KO is selling at a 17.6% premium to fair value. One is undervalued, the other overvalued. Which number do you go with?
In looking at CL, M* says it is selling at a 14.0% discount to fair value, S&P says it’s a premium of 8.0%. No consistency.
(These were the numbers after the close on 8/31 when I was doing my preliminary work for a mid-September purchase.)
I usually wait until both firms agree that the discount is double digits. They don’t have to agree on the number, just that both agree the company is undervalued.
For example, M* says BDX is selling at a 14.5% discount to fair value and S&P says the discount is 10.6%. That’s good enough for me.
MA is a little different though. M* says the discount is 12.9% and S&P says MA is selling at a discount of 27.1%. That’s a rather steep discount, but that isn’t what I focus on. They both agree the discount is double digits and that’s all I care about.
Once that is complete, I then usually go to Value Line for confirmation. So I try to include 3 various sources for valuations."
-Cómo las usa otro que participa en los hilos de Chowder:
“Each company providing analysis on companies use different algorithms to supply a rating. Some of the rating weightings is subjective and not objective. How pretty someone is -subjective. How overweight someone is-objective–finite number.
Chowder and I both look at multiple company ratings for the same company. They seldom agree on a specific number, but fall in a range. I like Morningstar, Capital I.Q. and Jefferson for comparison, and Value line for any tie-breakers. I look at Jefferson and Morningstar for risk analysis.
I have four brokerage supplying this data plus a free subscription to Value Line from one of the largest county Libraries.”
I came across a formula I dubbed “The Success Formula That Never Fails.”
High Quality + High Yield + High Growth of Yield = High Total Return.
High Quality is basically superior financial strength, reasonable debt, strong cash flow and credit worthiness. Financial strength is the key requirement in the stock selection process. Since we are buying ownership in a business, I want to be sure that business has the financial strength to continue sharing the profits with me and grow those profits annually.
I look for a safety rating of 1 or 2 by Value Line, or a BBB+ or better rating by Morningstar, or a BBB+ or better rating by S&P. These are investment grade ratings. If a company doesn’t pass this criteria, I go no further with my due diligence. Anything that doesn’t meet the financial strength criteria would be pure speculation for me, and I do very little speculating. Quality is job number one.
High Yield, for my purposes, is anything that yields at least 50% above what the S&P 500 yields. If the S&P 500 yield is 2%, then I require a minimum yield of 3%. It doesn’t get any simpler than that.
High growth in terms of yield, is an annualized rate of 5% or more for my purposes. This 5% growth in a stock’s yield actually has an impact on the stock selection process. I look for companies whose expected earnings growth is 5% or more. I’m assuming a 5% dividend growth rate will be supported by a 5% earnings growth rate as long as the company meets the financial strength criteria.
-Cómo leer un informe de Value Line: