Stock Valuation Project
Autor: reaper24 • February 8, 2016 • Business Plan • 748 Words (3 Pages) • 885 Views
I. Executive Summary
We are sure you and your family are concerned about your future. We take into consideration include financial security, wealth accumulation, and wealth preservation & distribution. As we try to explain and help you with a well-designed and customized plan that best suits you, we want to understand your goals and future aspirations. We want to start with General Electric. Below are some figures we want you to consider:
Model | Intrinsic Price |
DDM | $51.49 |
P/E Ratio | $30.36 |
P/CF | $19.81 |
P/Sales | $23.17 |
P/B | 1.76 |
Market Price- Value Line | $27.29 |
Market Price- Yahoo Finance | $28.03 |
DDM
The intrinsic price of DDM is $51.49, while the market price of Value Line was $27.29, I would definitely buy because of the intrinsic price of DDM is a lot higher than the market price right now. You could make a lot of money off buying this stock at it’s current price.
P/E Ratio
The P/E Ratio is one which compares a company’s market value per share to its earnings per share. We have calculated that the intrinsic price of the P/E Ratio is $30.36. The market price of Value Line however is $27.29. Based off of the P/E Ratio, we would want to purchase General Electric stock because it shows this stock is underpriced in the market by $3.07.
P/CF Ratio
Our calculations have determined that the intrinsic price using the P/CF ratio is $19.81. Comparing this price, to the Value Line market price of $27.29, we would suggest selling General Electric stock using this model. It shows the stock is over-priced in the market and we would not want to give the market time to adjust it.
P/Sales
The intrinsic price of P/Sales is $23.17. This price is $4.12 less than the market price of Value Line which is $27.29. Using the P/Sales model we would sell General electric stock because it shows the market value to be over-priced.
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