Is there a simple way to find the companies intrinsic value? Will it be displayed on any website like NSE/BSE?
Intrinsic Value is value discovered when analysing a stock and giving that its worth atleast this much. That means intrinsic value of any stock changes when the person analysing the stock changes and his method changes.
But there is particular value called as Book Value which is the book reliazable value if the company were to dissolve on a particular day (This value is based on the figures recorded on books which may be subjected to market estimate for any asset or liability.)
You can know book value on BSE website.
There are also many 3rd party screening website which give accurate book value figures like Finology, Screener etc
Not true. Book value is the value recorded in the books of accounts. Its not the value that the company will realise if it sells all its assets and discharges all its liabilities. I might have bought land in 1950 at Rs.1000. It will be shown at the same value. Thats why Book value is not at all relevant.
He wanted a simple way to know intrinsic value. I told an alternate value. Will revise my answer.
You can find the intrinsic value of the stock by adding the discounted residual income to the current per-share book value of the stock.
The intrinsic value of a company is not displayed one the NSE/BSE but you have to calculate it on your own. There are many methods given for calculation, but one of the simplest methods is Benjamin Graham’s method.
Modifying the Graham original method to match the Indian Stock Market, the formula stands as -
Intrinsic Value = [ Earnings Per Share x (7 + g) x 8.5 ] / Y
g is the average performance of the company in the past 5 to 6 years, and,
Y is the latest current yield.
Estimate all of the company’s future cash flows. calculate the present value of each of these future cash flows. Sum up the present values to obtain the intrinsic value of the stock.
Take a trial and see the data for each stocks or screen.
Intrinsic value is a philosophical concept wherein the worth of an object or endeavour is derived in and of itself. Essentially, you can find the intrinsic value of the stock by adding its current per-share book value with its discounted residual income (which can either lessen the book value or increase it).
Intrinsic Value is like Santa Claus, I know I will not find it. yet I cant stop searching for it