Thanks for the quick response.Discounted Cash Flow (DCF) is just another way oflooking at a stock, and says (something like):"The value of a business is the sum of all futurecash flows, discounted to a present value".There's a great book called "Valuing a stock" byGray, Cusatis and Woolridge that goes into a fairbit of detail. Ashwath Damodaran's "InvestmentValuation" also gives several valuation methods,including this one.I've used the model found in book A. but changedthe Equity risk premium (made it "stiffer", ormore conservative).What is interesting about the model is that whenI plug in values for some of the Dow stocks (I'veused CAT and AA) I get very nearly the price thatthey're at now (which makes sense given that themarket should value these stocks pretty fairlygiven that they're heavily followed/analyzed).I'd be happy to send you the excel version if you'reinterested.I'm not one to tout a particular stock but Zalesseems undervalued to me. I do own a few sharesbut wanted to get a feel for whether anyone knewof any "skeletons" before tipping in a bit more.Peter B.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar