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Stock Valuation

Discussion in 'Fundamental Analysis' started by nildeep_choudhury, Sep 18, 2016.

  1. nildeep_choudhury

    nildeep_choudhury New Member

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    How to check if a stock is undervalued or overvalued ?

    Is EPS a good indicator of a company's growth ? or other factors should be considered ? if so what should be considered ?
     
    nildeep_choudhury, Sep 18, 2016
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  2. nirajshah

    nirajshah Champion

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    No EPS and PE are never good factors and they take into account past performance but you have to see future growth prospects of the company and business

    Sent from my 504Q+ using DIY Technical Analysis mobile app
     
    nirajshah, Sep 18, 2016
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  3. nildeep_choudhury

    nildeep_choudhury New Member

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    Thanks @nirajshah.

    But what indicator or tools can we use to check if a stock is undervalued or overvalued and how ?
     
    nildeep_choudhury, Sep 23, 2016
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  4. shabbir

    shabbir Administrator Staff Member

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    Undervalued and overvalued are relative terms and so you have to seek what are growth prospects of the company going forward and if everything is priced in or not and if not it is undervalued else it is overvalued.
     
    shabbir, Sep 23, 2016
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  5. bhat64

    bhat64 Apprentice

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    I have on a general observed that stocks that aren't in the radar of FII/DII are mostly undervalued. Is this a correct observation?
     
    bhat64, Oct 28, 2016
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  6. shabbir

    shabbir Administrator Staff Member

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    Yes very correct and they may not be traded very aggressively either.
     
    shabbir, Oct 28, 2016
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  7. bhat64

    bhat64 Apprentice

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    In general I use these filters for finding value stocks; PSR<1.5 PEG between 0 and 1, mcap to sales < 1.5 and then look at PE and PB in comparison to peers in industry. Off course it must have decent sales and profit growth, strong promoter holding and other growth factors etc.
     
    bhat64, Oct 31, 2016
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  8. shabbir

    shabbir Administrator Staff Member

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    PSR can be changed to operating profit margins.
     
    shabbir, Oct 31, 2016
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  9. bhat64

    bhat64 Apprentice

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    Thanks Shabbir can you elaborate on why PSR can be changed to OPM as a valuation metric? I think there some learning for me here..
     
    bhat64, Oct 31, 2016
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  10. shabbir

    shabbir Administrator Staff Member

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    Sorry my bad. I misread it. I assume PSR as profit to sales ratio which is OPM but it is price to sales ratio.
     
    shabbir, Oct 31, 2016
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