The Lemon Fool

Hello you very amazing and intelligent individuals that make up this forum. I sincerely hope you have had a pleasant week and are doing well.

I kindly wondered for a standard manufacturing company or company that sells products and services, that is easy to analyse, what valuation would you most often use please to determine if the stock is undervalued? I know there is lots of different ways of running realistic valuations, however, i please wondered what is your favourite or the one you have found to be the most reliable please? If anyone kindly had any thoughts on this i would be forever grateful and it would be highly appreciated.

A very sincere very best wishes to you and thanks for all the amazing advice everyone gives on this forum. I hope one day to become a world class investor like most people on these forums. Hope you continue to have massive success with your investing. All the best.

I'm no expert but Warren buffet (IIRC) suggests that given one should only buy shares one intends to keep, a reasonable price for a share would be the sum of all the dividends you think it will ever pay out, future discounted to today's value.

Mike4 wrote:I'm no expert but Warren buffet (IIRC) suggests that given one should only buy shares one intends to keep, a reasonable price for a share would be the sum of all the dividends you think it will ever pay out, future discounted to today's value.

Gordon Model.

I think possibly Warren was referring to the sum of the future net free cash flows, some part of which are paid as dividends to investors, rather than just dividends alone. Sometimes also called "owners earnings." So DCF is something to consider for appropriate situations, maybe.

csh