Stock Value - How Much Stock Should Worth?Stock Value
© danny_peanuts
There are many method of measuring value of stock. However I'm proposing most basic stock valuation based on Book Value, Earnings, Dividends and Money Supply:
SV = (BVPS + EPS + DPS) * (M2/M0)
BVPS = Book Value Per Share (Asset - Liability)
EPS = Earnings Per Share
DPS = Dividends Per Share
M2 = M2 Money Supply (Money Market)
M0 = M0 Money Supply (Base Money)
Fundamental value of a stock should be determine by it's BV which means total asset of a company if were liquidated today and use some of it's asset to pay of the debt. So technically BVPS is the intrinsic value of a stock. However the company is generating an earning which is profit and loss that should be added on top of the fundamental value of company, so thus EPS should be added on top of Book Value Per Share. Aside from earnings, the stock that you purchase give you dividends as your return so DPS also can be included on top of that. So all in all BVPS, EPS and DPS are the primary valuation of the stock. However most of the stock are traded way higher than their fundamental valuation. The main reason of this is the market dynamics which is driven by central banks printing of base money supply M0. The banking credit system then lend out this money to money markets as loan so that peoples can invest and by the company stock. This money supply extension of credit is known as money market M2 which drive the stock inflated price. The ratio between M2 and M0 are the money multiplier effect that drives the stock price higher than it's valuation. So the Stock Value should be the total number of BVPS + EPS + DPS times the M2 money multiplier as shown by this indicator.
If the stock are traded above their SV value, that means it's an overpriced bubble
If the stock are traded below their SV value, that means it's an underpriced burst
Valueinvesting
Income Ratio■ Income Statement Ratio
This script will provide how distribution of income statement of a comany is.
it also allows us to see a clear picture how the business of a company develop.
For example TESLA.
in term of value, its revenue is 13,757K in the last quarter and it seam to be stable.
while the cost of goods sold (COGS) also increase.
In term of percent, it shows that the gross profit margin is growing up as well as net profit margin.
moreover, depreciation and amortization has declined as well as COGS.
This information like this will help us make a better trading plan.
■ Idea.
1. Each items such as Cost of Goods Sold, Gross Profit will be divided by total revenue.
2. 2 types of data after calculation, Value in Million and Percent by comparing with "Total Revenue".
■ How to use it.
In the menu, you can select the type of data to show
1. Select data type, it is available in Value in Million and Percent.
2. Select the financial period : FY for Financial Year and FQ for Financial Quarter.
Enjoy.
MacroCorrelation (Bitcoin Real Value)The best minds in the financial world think about how to determine the real value of an asset.
I constantly say that it is necessary to buy an asset only at the moment when its market price is below or equal to its fundamental value. Let's see what is the difference between these two concepts.
Fundamental value
Imagine that we decided to grow and sell, for example, strawberries. For this, we purchased the necessary equipment, tools, fertilizers, seeds, and more. Let's say that we needed $ 3000 for this purpose.
To facilitate the task, in our calculation we will not take into account all types of possible costs (electricity cost, workers' wages, necessary tax deductions, etc.).
If we had to take a loan to meet the initial needs, for example, at 10% per annum , then each borrowed $ 1000 in a year would cost us $ 1100. That is, $ 3000 would cost us $ 3300 per year.
Let's agree that our initial funds were completely enough to buy everything we needed, and we didn't need to take out a loan at a certain percentage. In this case, we exclude from the calculation the cost of the capital required to start your own business.
Suppose we managed to harvest 100 kg of strawberries. This means that the real value (fundamental value) of 1 kg of our strawberries is $ 30.
Market price
Things are a little different with the market price. The market price is determined by the volume of supply and demand for a particular product or service at a particular point in time.
By demand, we mean the intention to purchase a product or service (secured by the ability to pay a set price for it). A need that exceeds solvency is not a demand.
By offer, we mean the willingness to provide ownership (use) of the object of demand for a certain fee.
Simply put, the market price is the price at which the buyer is willing to buy (and the seller to sell) the volume of goods we need.
In our case, the price at which we sell 1 kg of our strawberries will depend on how much people really need our strawberries.
If we are the only sellers of strawberries in a certain territory and, at the same time, buyers really want to taste fresh strawberries, its market price can be as high as the last buyer is able to pay. If not, everything will depend on how high quality our product will be for its price. At the same time, the price constantly varies over a certain period of time ( seasonality and other factors). For example, if in winter we could sell 1 kg of our strawberries for $ 90, then in summer for $ 50. Strawberry prices range from $ 50 to $ 90.
Magic formula
We now understand what is the difference between fundamental value and market price. If the first is made up exclusively of a set of real metrics, the second is a variable factor that depends primarily on “human factors” (what is the maximum price the buyer is willing to pay, what is the minimum price the seller is willing to set at a particular moment in time).
You should try to buy an asset only at the moment when its market price is below or equal to its fundamental value.
However, how can you independently determine the fundamental value of an asset?
Unfortunately, there is no universal answer to this question, just as there is no universal “magic formula” in nature (my sincere respect, Joel Greenblatt) that could determine the fundamental value of any asset on the planet. The point is precisely in the criterion of universality. If we consider each asset (or at least the market) separately, we can well determine its fundamental value.
Even those things that seem free to us in everyday life (just their cost are negligible) have a fundamental value.
Three factors to assess the fundamental value of Bitcoin
Let's try to take a separate asset, for example Bitcoin , and do with it everything that we did earlier with our “strawberry business”.
When assessing the real (fundamental) value of Bitcoin , we will take into account 3 main factors.
1. The maximum possible and current supply in the Bitcoin market
The reward for mining a Bitcoin block is halved every 210,000 blocks. This fact is called halving (halving). When all blocks are mined, the total amount of existing bitcoins will be 21 million coins.
Accordingly, the maximum supply in the Bitcoin network will not exceed 21 million coins.
In reality, things are even better, since this volume also includes a certain amount of lost coins. By lost, we mean all those coins whose “private keys” the last owner no longer has access to. For example, at the time of the appearance of Bitcoin in 2009, its real value was doubtful and not obvious to most of its owners, many of whom did not pay due attention to understanding the safe storage of an asset, periodically losing access to hundreds and thousands of coins.
As a result, we understand that the total supply in the Bitcoin market will be significantly less than 21 million coins.
To evaluate the proposal, it is not enough to understand how much of the asset exists, because a certain amount of it, as we have already understood, can either be lost or be blocked for a long time. It is also important to take into account the criterion of “supply in time”. That is, the current total “liquidity” of the network.
2. Bitcoin network hashrate
The main indicator of the viability and stability of the Bitcoin network is the hash rate (computing power). Stable hashrate = network security.
3. The real value of the US dollar
When analyzing the Bitcoin / Dollar pair, in addition to the real value of Bitcoin , it is also necessary to take into account the real value of the US Dollar .
It is believed that assets such as stocks or cryptocurrencies are extremely volatile (the price can change over a wide range within a relatively short period of time). At the same time, to reduce volatility , experts advise using the so-called “currency baskets”.
A currency basket is a certain percentage of foreign currencies in which the investor's capital can be distributed. The ratio of currency units in the basket is used to reduce the potential risk of currency fluctuations.
The main problem is that, due to inflation , the purchasing power of the currencies themselves drops significantly over time.
With the $ 100 we earned in 1913, already in the 1920s we could have purchased 50% fewer goods and services than before. In the 1980s, it was 90% less, and in the 2010s it was already 98% less.
This fact must also be taken into account when assessing the real value of Bitcoin , since everything is relative, and in the Bitcoin / Dollar pair, we determine the value of Bitcoin , expressed in US dollars.
The real value of Bitcoin
After assessing the relationship of the factors described above and drawing up a mathematical formula, we can proceed to the analysis of the results. In order to cut off unnecessary noise when constructing the function, we will use the graph for 1 month.
Analyzing the resulting chart, first of all, the following is striking: the fundamental value of Bitcoin grows over time. This is due to the gradual expansion of the "user base" of the network, as well as the growth of its popularity among investors of completely different classes.
I propose to compare the graph obtained earlier with the graph of Internet users (in% of the number of adult US citizens ). Similar, don't they?
The more the number of Internet users, the higher its influence and economic potential. The more the number of users of the Bitcoin network, the higher its economic potential and fundamental value.
However, understanding the fundamental value alone is not enough. We, as investors, first of all need to understand when to buy any asset.
To do this, compare the chart of the market price of Bitcoin with the chart of its fundamental value obtained earlier.
Now that we have a complete picture of what is happening and understand both the fundamental value of the asset and its market price, the fact of the numerical prevalence of the price over the fundamental value for 116 out of 133 months becomes quite clear. Periods of Bitcoin being below its fundamental value are extremely rare and only take ~ 13% of the trading time.
For about 87% of all trading time, Bitcoin's market price is above its fundamental value. Those rare periods when traders are willing to sell bitcoin below its fundamental value are an incredible gift for a long-term investor.
Bull and Bear Markets
If you buy Bitcoin (like any other asset) below its fundamental value, this is an absolutely incredible idea in terms of potential profitability, who in their right mind would sell their assets below this mark ?!
It's all about the emotionality of people. Saying “I will not do stupid things when the time is right” is easier than actually maintaining composure. Especially when it comes to money. Your money. And sometimes even dreams.
The classical market theory usually divides the market into two main phases: A bull market is a period of time during which the price rises systematically (accordingly, the demands and expectations of traders gradually grow). A bear market is a period of time during which the price gradually falls (accordingly, traders' requests and expectations gradually fall).
There is also the concept of “correction”: A correction is a temporary change in the price of an asset, contrary to the main trend.
For the current day, there is not a single clear criterion that separates the concept of a bear / bull market from the concept of a correction. However, we can say with confidence that the market change (from bullish to bearish or from bearish to bullish ) is interconnected with the fundamental factors of the market. Corrections, on the other hand, have significantly less connection with fundamental indicators.
and are rather related to the “physiology of the market” (nothing can only rise in price every unit of time for a significantly long time, nothing can only fall in price every unit of time for a significantly long time).
In this case, the most rational would be to define a bear market as a delay in updating the absolute historical highs of the price with a preliminary touch of the fundamental value.
Buying below the fundamental value is always a smarter idea than buying above the fundamental value, since, in most cases, it is the touch of the fundamental value that globally separates a bear and a bull market.
Fun fact: If we were to buy Bitcoin every time it touched the fundamental value, the average buy price as of July 2021 would be $ 1,506.65, which is 87% less than the current fundamental value of Bitcoin .
Conclusions
1. The total amount of Bitcoins , as well as the speed of their production (mining) over time, are programmatically limited, which limits the volume of the maximum possible supply
2. Bitcoin is transported, which means that the volume of supply for the current minute will also depend on the actual volume of assets available for sale
3. The viability of the network is based on the amount of computer power supporting it (network hash rate)
4. When analyzing the Bitcoin / Dollar pair, in addition to the real value of Bitcoin , it is also necessary to take into account the real value of the US Dollar
5. Price ≠ fundamental value
6. Buying below the fundamental is always a smarter idea than buying above the fundamental.
7. Don't believe the headlines of financial news and the public words of financiers
8. Selling strawberries can make a fortune too
Value CandlesCreating candles from value stats as an experiment. These candles will almost always follow price candles except when there is a deviation.
Strategies based on buying the dips can be applied better on value candles. This is because, drop in value candles imply real bargain whereas drop in price candles can also be due to some other factors.
We can clearly see in the Amazon chart that value candles have come down even though price candles are at same level from September. This signifies AMZN stock is having more value now (due to increased sales from September to now) than back in September even though the price is same.
Another simple thing we can do is move Value candles into same overlay as that of price candles. This will look something like this:
Key thing to remember : Lower the value candle higher the relative value of stock.
Value Investing StrategySimple fundamental investing strategy based on two factors - Value and Growth
Look for value factor at its 6 months lowest. (Change Length to alter this. Each unit represents 3 months)
Verify that selected growth factor is increasing. (Compare with moving average)
Optionally consider stocks only if Piotrovski-F-Score is above PfScoreLimit
Exit Strategy include:
Reversal - Sell when value factor is at 6 months peak.
Trailing - Trail with 2 ATR. Can be changed in settings.
Combined - Keep reducing upon value factor reaching 6 months high. But full exit happens when stop loss is hit.
Value RangeHere is another attempt to chase value based on technical analysis.
This is extended version of PE range script published earlier.
Instead of just PE, this script contains several other factors which defines value. You can chose which factor to look at from input dialog:
Possible value factors included in this script are:
Price to Earnings
Price to Sales
Price to Book
PE - Forwarding
PS - Forwarding
Price to Cashflow
Enterprise Value to EBITDA
Enterprise Value to Cashflow
Some of these can be added to chart directly from financials. But, the script also calculate range based on donchian channel or bollinger bands. Instead of short periods, we are looking for periods in terms of years. Rest of things remain same.
Graham Net Current Asset Value per ShareNet current asset value per share (NCAVPS) is a measure created by Benjamin Graham as one means of gauging the attractiveness of a stock. A key metric for value investors, NCAVPS is calculated by taking a company's current assets and subtracting total liabilities.
NCAVPS = Current Assets - (Total Liabilities + Preferred Stock) ÷ Shares Outstanding.
According to Graham, investors will benefit greatly if they invest in companies where the stock prices are no more than 67% (or 2/3) of their NCAV per share (price <= (2/3)*NCAV).
Coloring pattern:
- price <= (1/3)*ncav -> light green
- (1/3)*ncav < price <= (2/3)*ncav -> green
- (2/3)*ncav < price <= ncav -> dim red
- price > ncav -> red
Value investingwhen this indicator goes under value 8 it means it's stock or index at her best value.
condition is stock in strong up trend.
it not provide buy or sell signal or any direction of trend.
if you are looking for investing for long term and your are confusing were to enter it provide best value of stock or index for investing.
use bigger time frame.
recommended time frame is 1 month for best result.
Graham FormulaThis is an Tradingview implementation of the Grahams Formula as described in Benjamin Grahams book "The Intelligent Investor".
In theory this can be used to screen for over- and undervalued stocks, however as Graham himself notes, you should look into other fundamentals when using them in conjunction with Grahams formula.
Dividend Valuation [DDM] display liked Support/Resistance Zone
This Indicator will show you a horizontal line of the stock valuation with the DDM method.
The DDM method is so much simple which has a formula:
Price = EPS * DividendPayout / %Yield
In this case,
-I set the default for Dividend Payout = 40.
This number I refer to from my Research that a lot of stock with have some potential of growth usually has payout around 40% from EPS.
And so far the Payout ratio can use to the term of "Margin of Safety" too, You can set this value to what safety you want.
-The EPS, This value I get from a script that already has in Trading View. And I set it for the TTM version.
-The %Yield, I have 3 lines that you can adapt form the yield that you want.
From this horizontal lines of dividend yield, I hope it can use to be like the Resistance and Support line that guides you to buy or sell a stock you want. And can adapt to your Hybrid Style.
Hope this indicator will help you, May good health to be you :)
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สวัสดีมิตรสหายเทรดเดอร์ชาวไทยทุกท่าน
วันนี้ผมได้ลองเขียนอินดิเคเตอร์ตัวหนึ่ง ที่จะแสดงค่าออกมาเป็นเส้นแนวนอน ที่สะท้อนค่า Valuation แบบ DDM ออกมานะครับ
การประเมิน Valuation แบบ DDM นั้น เป็น 1 ในวิธีประเมินค่าหุ้นที่แอบง่ายอยู่ระดับหนึ่งเลย โดยใช้ตัวชี้วัดเพียงอย่างเดียว นั่นคือ "เงินปันผล" ที่ท่านจะได้
ผมเชื่อว่ามีมิตรสหายหลายท่านที่เข้ามาในตลาด ย่อมหวังผลตอบแทนในรูปแบบเงินปันผล ซึ่งจะเปรียบเสมือน Passive Income ที่ส่งเงินให้ท่านทุกปีๆ ไม่ต้องมานั่งเครียดที่หน้าจอ ดูกราฟทุกวี่วัน ลงทุนกับบริษัท ลงทุนกับระบบ ให้เขาทำงานให้กับเราเป็นต้น
ทั้งหลายนี้จึงเป็นที่มาในการเขียนอินดิเคเตอร์นี้ขึ้นมาครับ
อินดิเคเตอร์นี้เรียบง่ายมาก เพียงแค่ท่านใส่ตัวแปรไปแค่ 3-4 ตัวแปรเท่านั้น
ตัวแปรแรกคือ ใส่อัตราการจ่ายปันผล หรือ Dividend Payout
ค่านี้เแสดงถึงว่า หุ้น 1 ตัว เมื่อได้กำไรสุทธิรายปีแล้ว ( EPS ) เขาจะจ่ายอออกมาในสัดส่วนเท่าไรจากกำไรสุทธิพวกนั้น โดยมีระดับตั้งแต่ 1-100 %
โดยมากแล้ว จากที่ผมได้ทำการวิจัยส่วนตัว พบว่าหุ้นส่วนมากใน SET100 และอื่นๆ มักจ่ายปันผลออกมาในระดับ 40% อันเป็นค่าที่ผมตั้งไว้เป็น Default
นอกจากนี้แล้วการตั้ง Dividend Payout ไว้ในระดับที่ต่ำ อาจเป็นการตั้ง Margin of Safe ty ที่ไม่เลวด้วยนั่นเองครับ
ตัวแปรอีก 3 ตัวที่เหลือ จะเป็นตัวเลือกของ % เงินปันผล
ซึ่งท่านสามารถเลือกเงินปันผลที่ท่านด้วยการได้เลยครับ โดยค่าที่ผมตั้งไว้นั้นจะอยู่ระหว่าง 2-4% ท่านสามารถปรับเปลี่ยนได้
ซึ่งเป็นค่าที่อยู่ในระดับกลางๆ สำหรับการลงทุนแบบ Value Investing เลยครับ (แต่ทั้งนี้ทั้งนั้น ท่านสามารถศึกษาศาสตร์นี้ได้จากหนังสือหลายเล่มเลยครับ)
หลังจากใส่ค่าตัวแปรทั้งหมดแล้ว ค่าที่แสดงในกราฟ ก็จะเป็นเส้นตรงแนวตั้ง 3 เส้น ที่เปรียบเสมือนแนวรับแนวต้านให้ท่านได้ทำกลยุทธ์ ไม่ว่าจะวาง Risk Reward Ratio หรือจะเก็บสะสมหุ้นก็แล้วแต่ท่านเลย
ทั้งนี้ทั้งนั้นแล้ว ผมหวังว่าอินดิเคเตอร์นี้ จะทำให้ท่านที่เป็นนักลงทุนสาย Hybrid มีความสุขในการปรับใช้นะครับ
หวังว่าท่านจะชอบอินดิเคเตอร์นี้ ไม่มาก ก็น้อย และเป็นสะพานเชื่อมให้กับเทรดเดอร์สายกราฟเทคนิคสามารถคุยกับเทรดเดอร์สายพื้นฐานจ๋าๆ ผ่าน Assumption ของวิธีการประเมินมูลค่าหุ้นโดยใช้เงินปันผล หรือ DDM กันนะครับ
ขอให้มิตรสหายเทรดเดอร์ทุกท่าน
รักษาสุขภาพให้แข็งแรงปลอดภัย
มีสุขภาพแข็งแรงครับ :)
Intrinsic value calculation Intrinsic value calculator based on Warren Buffet's and Ben Graham's work
In value investing determing the true value of a COMPANY instead of a stock price is crucial.
This little indicator shows the "Intrinsic value" of the choosen stock meaning the value of the stock in 10 years time. Calculation is based on historical book value's average annual growth rate and dividends paid.
Since this is about long therm investing, use monthly charts.
"Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life.”
– Warren Buffett
One way to calculate that is by the growth in per share book value and dividends taken in the forseeable future (10 years) than discount it with the prevailing 10 year note's rate.
In the inputs you have to set 2 variables:
1. How many years back you have the first data for book value per share available?
2. What was the per share book value that year?
(Bookvalue is ploted in olive colour and you can get the oldest one if you move your cursor over the latest data on the left)
CAUTION! You have to reenter it for every stock you analyse as this is stock-specific data!
After setting the input data, you will see the "Intrinsic Value"'s pink curve ploted over the price chart.
If the price is well below the pink line, the company is undervalued and can be a possible applicant for long therm investment.
Margin of safety: when the current price is 50% below the intrinsic value that means a 10% yearly growth potential (100% growth in 10 years) or a 100% margin of safety.
I am a beginer in Pine so please excuse my coding...
If anybody knows hot to extract historical data from 15 years ago, please share it with me, so I can automate the whole calculation without inputs necessary.
Peakestsignal Indicator - Valuetrading Indicator - Cheap Entry'sPrivate indicator.
HI BIG PLAYERS
Are you looking for the cheapest entry signal for trading?
This indicator gives the really cheaply entry signals. For buysignals you get a green background vertical line and for sellsignals you get a red background vertical line.
If you have a trend strategy and only need THE TREND for trading: believe me, this indicator give you the right signals.
Alerts are possible with the TradingView Alertsystem.
More examples of another markets:
HOT TO GET ACCESS: looking on below signature.
Kind regards
NXT2017
ValuationValuation is the process of determining the current worth of an asset or a company. Indiactor can be use to determine value.
