On Wed, 12 Sep 2007 14:44:48 -0500, Jose Bailen <jose.bailen[at]gmail.com> wrote:
- quote -

Adding a book value here leads to double counting.

As always, the main problem with all these "approaches" is that future
earnings are not very easy to predict. This usually makes them
unusable.

i

Thanks. An alternative way -widely used as well- is to use the EVA
(Economic Value Added) approach. To summarize its results, the
intrinsic value of a stock is given by its book value plus the
discounted sum of expected future (ROIC minus WACC), where ROIC is the
return on invested capital, WACC is the weighted average cost of
capital, and the discount rate which is usually considered is beta
(the covariance of the stock returns with the market portfolio).

On Sep 10, 5:05 pm, Akash <narach.investm...[at]gmail.com> wrote:
- quote -

The procedure commonly used by investment analysts to estimate the
intrinsic value of a stock traded in the stock market consists of the
following steps:

· Estimate the expected earnings per share of the stock.
· Establish a price earning multiplier (or P/E ratio).
· Develop a value anchor and a value range.

However, we consider it appropriate to advise you the investor at this
stage itself, that there are three main obstacles in the way of
successful fundamental analysis. Namely:

· Inadequate and/or incorrect financial data pertaining to the stock
under study.
· Future uncertainties.
· Irrational stock market behaviour.

For a more detailed study and understanding; visit:

http://www.narachinvestment.com/esti...of_a_stock.htm