Book value: Weighing on assets
(May 21, 2002)
In general, we can assume a company’s share price to be the sum of two components. The first component is the price assuming that the company does not grow in the future. The remaining part would be derived from expectations of growth in earnings going forward, the present value of future growth opportunities.
(Special Report)

Stocks: Measuring expectations
(Nov 3, 2001)
The most mysterious thing especially with the software stocks has been their price. The price of a security can be broadly divided into two elements viz. the intrinsic value of the stock and the speculative element. But from the point of view of making a long-term investment, and not punting, it is the intrinsic value that ultimately matters. Arriving at the intrinsic value is, however, of little help as many times the stocks are nowhere near their correct valuations and in recent times speculative element in stock price has increased considerably. The idea of this report is to help you evaluate whether market assumptions that go into pricing of the stock are realistic or not.
(Special Report)

Valuing super normal growth
(Dec 8, 2001)
In the previous article , we had seen how to put a measure to the growth expectations embedded in a stock price. In this article we attempt to price a stock, which is expected to show very steep earnings growth.
(Special Report)

P/E ratio’s: Reality check
(Jan 19, 2002)
One of the most commonly used tools for making an investment decision is the P/E ratio. This is due to the fact that that it is very easy to compute and more so, due to its easy availability. However, using the ratio without understanding its interpretation can be very dangerous especially for the retail investors, who have limited access to information.
(Special Report)

Perception vs Valuation: Directly proportionate?
(Feb 22, 2001)
Revered investment analysts the world over have constantly drilled into our minds that it pays to be invested in companies whose managements are perceived to be focused and proactive. A good management always commands premium valuations for the stock. The logic is justified given the fact that the management’s attitude towards the company determines the growth curve it takes. Let’s test this reasoning and see whether the logic really holds good for Indian companies.
(Special Report)

Dow Theory: An insight
(Mar 30, 2001)
Technical Analysis, a branch of stock market analysis, is built on the premise of studying past data to arrive at some meaningful interpretation (trends) to help forecast future stock price behaviour.
(Special Report)

Net asset value: unlocks hidden potential
(Aug 11, 2000)
How do we value companies?
This is a question which often comes up in the mind of investors. Well the basic valuation techniques hold good for most companies across sectors. Some of these are earnings, revenue, cash flows, net asset and brand valuations. The purpose of this article is to familiarise investors with the methodology of calculating Net Asset Value (NAV). This valuation technique unlike most others is not available in finance books, but is essential in valuing certain type of companies, especially those which have a large asset base.
(Special Report)