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Stock is valued

Discussion in 'Fundamental Analysis' started by siva934127, Dec 13, 2014.

  1. siva934127

    siva934127 Member

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    Hi Shabbir,

    The below mentioned points found for some stocks in some fundamental web based sites, I am not able to understand what does it mean, Could you please explain if you know?

    1.At the current price of Rs 334, the stock is valued at 1.2 times our estimated FY16 book value.

    2.At the current price of Rs 158, the stock trades at 34 times its TTM earnings

    3.At of the current price of Rs 2,474 the stock of TCS is trading at a trailing twelve months (TTM) price/earnings (P/E) multiple of 22.5 times

    4.At the current price of Rs 1,111, the stock is valued at 2.9 times our estimated FY17 adjusted book value


    Thanks and Regards,
    Siva.
     
    siva934127, Dec 13, 2014
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  2. shabbir

    shabbir Administrator Staff Member

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    The estimated book value of the company will be around 280 in FY16.

    TTM is trailing 12 months and so the price of the stock is 158 and if thats 34 times earnings the earning per share of the stock is under 5 Rs.

    Same as above. EPS of TCS is around 110.

    Again book value estimated in FY17 and the current price is being multiplied by a factor of 2.9

    The EPS and Book value are the ratio Indian investors invest in and thats completely wrong way of investing fundamentally (according to me).
     
    shabbir, Dec 13, 2014
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  3. ravirajpr

    ravirajpr Responder

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    Please refer to my post for Plastiblends at times as per Fundamental Analysts a stock may be overvalued however with the momentum and Market sentiments the Trend may continue till exhaustion or correction.
     
    ravirajpr, Dec 18, 2014
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  4. shabbir

    shabbir Administrator Staff Member

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    Exactly. Perfect for a breakout pattern.
     
    shabbir, Dec 18, 2014
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