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Valuation for right price of stock

Discussion in 'Fundamental Analysis' started by brijesh_chokshi, Sep 18, 2017.

  1. brijesh_chokshi

    brijesh_chokshi Member

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    What is the general procedure to arrive at fair price range of stock. P/E less than 15 and P/B < 2.0 or their multiple less than "X" is not seems practical and proven method for companies which have multiplied investment in past few years. Is there any recommended book for stock valuation?

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    brijesh_chokshi, Sep 18, 2017
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  2. bhat64

    bhat64 Apprentice

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    If you have the appetite then check out Aswath Damodaran books. There is no one hard rule for valuation. It needs to be compared within the peer industry/companies group. If you go and fix pe less than 15 then you will never buy Britannia yet on Nov last year Britannia was very attractive although pe was not 15. I hope this is making sense. There are other metrics price to sales and marketcap to sales for valuation analysis. I also use net sales per share too.


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    bhat64, Sep 19, 2017
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  3. shabbir

    shabbir Administrator Staff Member

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    Look for growth. Higher valuations with good growth will be justified but then there is no general yardstick where you can compare all the 3k stocks on one parameter. Has to be stock specific, industry specific but more important, sentiment specific. Some stocks trade even at 100 PE and others hover around 10. For book check https://shabbir.in/common-stocks-uncommon-profits/
     
    shabbir, Sep 19, 2017
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  4. abhijitupsc

    abhijitupsc Contributor

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    Can you please suggest the names of Aswath Damodaran's good books?
     
    abhijitupsc, Sep 20, 2017
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  5. abhijitupsc

    abhijitupsc Contributor

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    Can you please suggest the names of Aswath Damodaran's good books?
     
    abhijitupsc, Sep 20, 2017
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  6. bhat64

    bhat64 Apprentice

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    bhat64, Sep 23, 2017
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