Valuation Rainbow

14 Jan 2023

Valuation Rainbow
© danny_peanuts

Stock value based on Book Value, Earnings, Dividends and Money Multiplier

SV = (BVPS + EPS + DPS) * MM

BVPS = Book Value Per Share
EPS = Earnings Per Share
DPS = Dividends Per Share
MM = Money Multiplier - Integer Number from 1,2,3, ... ,7

There are multiple ways of valuing the stock. Book value is traditionally used as the basic valuation since it's calculate the total asset value minus the liabilities of any company. There are valuation based on multiplication of book value, there are valuation based on multiplication of earnings, and valuation based on multiplication of dividends. Here I'm proposing valuation based on all of these combined. So this indicator is measuring stock value based on multiplication of book value plus earning plus dividend per share. Since the money supply could have an multiplication effect so does the stock value could have a multiplication effect. Also notes that some blue chips stock tends to value higher than startup stock due to money is not equally distributed. So for simplicity I will use simple integer number to represent this multiplication effect as rainbow color plots, thus it can be applied to any stock at any given countries. The higher the stock price on valuation bands the most expensive it is and the lower the price on valuation bands the cheaper it is.

14 Jan 2023

Nota Keluaran

Adding Color Gradient

14 Jan 2023

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Adding Gradient Color

14 Jan 2023

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Update Transparent Gradient

14 Jan 2023

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Update Chart

14 Jan 2023

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Update Gradient Color

14 Jan 2023

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Add Fractional Valuation

14 Jan 2023

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Add Valuation Multiplier x2, x6, x8
Add Valuation Divisor x0.2, x0.6, x0.8

15 Jan 2023

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Update Color Gradient

15 Jan 2023

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Increase Gradient Multiplier and Divisor

15 Jan 2023

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Update Rainbow Color

15 Jan 2023

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Update Line Transparency

15 Jan 2023

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Fix Incorrect Label

20 Jan 2023

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Add the Cashflow component to the equation. So it become the stock valuation based on Book Value, Earnings, Dividends, Cashflow and Money Multiplier

SV = (BVPS + EPS + DPS + CFPS) * MM

BVPS = Book Value Per Share (Asset - Liabilities)
EPS = Earnings Per Share
DPS = Dividends Per Share
CFPS = Free Cash Flow Per Share
MM = Money Multiplier

21 Jan 2023

Nota Keluaran

Renaming to accommodate other Scripts:
- Stock Value Rainbow: script to estimate stock value based on book value, earning, dividend, cashflow
- Index Value Rainbow: script to estimate index value based on fed balance sheet or base money supply
- Gold Value Rainbow: script to estimate gold value based on global base money supply

21 Mei 2024

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Updating the code to be more sensitive toward EPS changes by squaring it (and keeping the sign)

9 Jul 2024

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Stock Valuation based on Book Value, Dividends, Cashflow, Earnings and Estimates and Money Multiplier

There are many ways to measure stock valuations: some methods are using book value, some are using dividends, some are using cashflow, some are using earnings and some using estimates data. Most of these valuation methods are based on multiplier effect which measure how many times the stock price could expand from their valuation base. This indicator attempts to unify all these measurements using just simple addition of all measurements such as: book value per share, dividend per share, cashflow per share, earning per share, and estimates of earning per share and then using multiplier effect to create beautiful rainbow to see how far the stock has growing up above or below their valuation base. The higher the stock price on rainbow spectrum means it is more expensive and the lower in the rainbow spectrum means it is cheaper. Here is the basic formula explanation:

SV = (BVPS + DPS + CFPS + EPS + EST) * MM

BVPS = Book Value Per Share (Asset - Liability)
DPS = Dividends Per Share
CFPS = Free Cash Flow Per Share
EPS = Earnings Per Share
EST = Estimates of EPS
MM = Money Multiplier (1x, 2x, ... ,10x)

- The gray line represents the stock value SV
- The rainbow above the gray line represents the multiplication factors from 1x, 2x, ..., 10x
- The rainbow below the gray line represents the division factors from 0.8x, 0.6x, ..., 0.2x

Check other script to value stock and index:
- Stock Value Rainbow: script to value stock based on book value, dividend, cash flow, earning and estimates.
- Index Value Rainbow: script to value index based on fed balance sheet and base money supply
- Gold Value Rainbow: script to value gold based on global money supply
- Stock Value US: script to check US stock value
- Stock Value EU: script to check EU stock value
- Stock Value JP: script to check JP stock value
- Stock Value CN: script to check CN stock value