Stock Valuation Model – Three Simple Techniques for Value Stocks

A stock valuation model is a method of assessing stocks. Everyone knows the stock price, but only rarely knows how much it value and other investors do not even care.

This is probably the most common model you've ever heard in stock valuations. However, I find this a bit difficult. Simply put, since the discounted cash flow model must take into account the cost of revenue growth and simultaneous upgrades, this may be too difficult to estimate and predict for external investors

Nevertheless, you can use this method to estimate future cash in the valuation Flow rate;

This model is best for income investors. The idea is to predict future dividend allocations based on average historical dividend payout ratios and discount them back to their present values. Although this is the simplest, it is the best high dividend yield stock

Nevertheless, the stock must have very strong business performance and can guarantee dividends paid for 10 years.

Income Growth Model (EG)

This is my favorite method because it is very practical and easy to do. Initially, I used constant or variable growth rates to forecast future earnings. The constant or variable growth rate depends on the expected performance of the business during that period. Often, I typically use historical business performance as a benchmark, as long as its underlying value remains the same. I then discount future earnings with the expected return on investment (ROI).

I find this model very valuable because stock prices are easily reflected by their earnings. PER.

Therefore, before buying future stocks, you should try to value. If you buy stocks at a price lower than their intrinsic value, you can significantly reduce the risk of loss. Learn how to evaluate inventory