How to Value a Stock | Learn 8 Techniques incl. DCF, PE Ratio, Book Value, Liquidation & Intangibles

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Күн бұрын

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Company valuation or business valuation is the process of assessing the total economic value of a business and its assets. In other words, it explains: how to value a stock. In this video, I shall explain 8 different stock valuation techniques in a beginners format which shall serve as a precursor to more advanced lessons later including the valuation of shares
👉 Video Chapters:
00:00 Yenna Periya Valuation
00:55 1. Cost Based Valuation
01:32 2. Comparable Company Valuation
02:40 3. Book Value
03:47 4. Revenue Multiplier
04:46 5. Earnings Multiplier
05:49 6. Discounted Cash Flow Model
07:35 7. Intangible Assets
09:16 8. Liquidation Value
👉 Useful Resources & Readings:
‣ The Little Book of Valuation by Prof. Aswath Damodaran (book link): amzn.to/3XC05vx
‣ Some DCF calculators
www.finology.in/Calculators/I...
tradebrains.in/dcf-calculator/
www.safalniveshak.com/introdu...
#valuation #businessvaluation #stockvaluation
Disclaimer: I am not a SEBI registered investment advisor or research analyst. The content posted on this platform is purely for educational purposes and none of it constitutes investing or trading advice. Viewers should do their own research and diligence before investing or acting on the information presented

Пікірлер: 156

@harisoma Жыл бұрын

Thanks

@shankarnath Жыл бұрын

Thanks a ton for this kind gesture, Hari. I am very happy that you are thoroughly enjoying the content!

@beingcrackerjack4091 Жыл бұрын

I got extra goosebumps when I get to know that person whom I admire knows tamil ♥️ Love and support your insightful content always sir!

@shankarnath Жыл бұрын

Thank you so much

@agytjax Жыл бұрын

Finance guru, highly effective teacher, a de-clutterer, special effects editor 🙂and last but not the least a great story teller ! Thanks for another wonderfully narrated story with loads of knowledge. I have watched YT videos of several Finance/Investing influencers. But, Shankar, you really stand out - you have the confidence of "been there/done that", expertise in your domain and most importantly the art of decluterring and conveying the knowledge in digestable parcels. You really have a great career in the field of Financial Enlightenment

@shankarnath Жыл бұрын

Thank you very much for your kind words and your good wishes 🙌

@rengarajvenkatraman9063 Жыл бұрын

Sir neenga Tamil aah 😍. Really proud of you sir. Excellent contents. keep educating us

@shankarnath Жыл бұрын

Thank you very much Rengaraj

@sms9865 Жыл бұрын

Mind-boggling video. I will watch this twice. Valuation techniques are new to me, i truly value your content 😊😊 Appreciate the effort. Happy to see your creativity overtaking your knowledge. Now I got to know you are from TN. Love form Karnataka. Jai Hind 🇮🇳🇮🇳

@shankarnath Жыл бұрын

Thank you very much, glad you liked it SMS. A solely talking head or interview style of delivery doesnt do justice to KZfaq which is an audio-visual medium .. visual being the operative word. Actually, I am not from TN .. was born & brought up in Delhi to Tamilian parents

@zmzabuawala Жыл бұрын

Don't know how to thank you, you explained in very easy to understand language. Kudos!

@shankarnath Жыл бұрын

You are most welcome, Zainab

@hemangjauhari6802 Жыл бұрын

Gem of a video - content, storytelling, and simplicity... bar-raising!

@shankarnath Жыл бұрын

Thank you Hemang. Glad you liked it

@drpjmahanta1896 Жыл бұрын

Great Mr Nath, what a fascinating way to teach a complicated topic. Really enjoyed !!

@shankarnath Жыл бұрын

Glad you enjoyed it! Much appreciated

@midascaps6921 Жыл бұрын

Your videos are next level. . I couldn't finish Ashwath Damodaran class but I will finish yours . . The best thing I like about it it you never try to oversimplify things for views sake..

@shankarnath Жыл бұрын

Thank you very much. I'm trying to cater to the beginner's plus segment i.e. investors who have crossed the what is mutual fund? what is SIP? stage .. and want to grow their knowledge on more advanced things at their own pace. So, my assumption is: anyone who is watching my videos is already 1-2 years into investing and knows the basics. Having said this, this video is a precursor to more detailed videos on valuation that I have planned over the months to come.

@midascaps6921 Жыл бұрын

@@shankarnath yes thank you very much , I have 1 or 2 year of investment experience. .A detailed valuation (little more technical ) course will helpful. I am even ready to buy it..

@shankarnath Жыл бұрын

Have you come across a video or playlist that fits in with what you are looking at? Can be Indian or international .. and in English or Hindi. I want to gauge your level of present knowledge, presentation style, exercises sought, pace of teaching etc. Pls share me the link on hello@beginnersbuck.com when you come across one. Thanks!

@midascaps6921 Жыл бұрын

@@shankarnath I have mailed you. .

@shailesh6355 Жыл бұрын

U r a wonderful teacher 😊

@shankarnath Жыл бұрын

Thank you! :)

@joethim Жыл бұрын

Vanakkam Shankar sir. Every video of yours is like refreshing my MBA 🙏 every time. Keep them coming

@shankarnath Жыл бұрын

Thank you very much

@ej_whistleblower Жыл бұрын

Informative! I still remember i watched your video on PE ratio long back. Your teaching style is really effective.

@shankarnath Жыл бұрын

Thank you Ejaj. Glad you are liking the presentation and content.

@michaelhumanist 9 ай бұрын

I admire your breath taking knowledge and intelligence application. Happy to know that you know Tamil

@shankarnath 9 ай бұрын

Thank you very much

@think-tank6658 Жыл бұрын

Sir you are killing it 👏

@anandts6973 Жыл бұрын

Excelelllenty covered and to top it " Romba Nalli irruku ungla intro scene"

@shankarnath Жыл бұрын

Thank you Anand. Appreciate it

@rajeshbhosale2008 Жыл бұрын

Humourous Shankar making Serious & Esoteric Finance topics easy to understand for layman! Thank you so much Shankar Anna! 👍🏻

@shankarnath Жыл бұрын

You're most welcome 🤗

@swathiprakash3115 Жыл бұрын

You are a great teacher. Keep doing it. 🎉

@shankarnath Жыл бұрын

Thank you!

@harisoma Жыл бұрын

Valuing such a Valuation video is really immense. Even every Kanna can understand it very well.Hat's to your sense of humor Shankar sir👏🙏

@shankarnath Жыл бұрын

So nice of you, Hari. Yes, this is a precursor and I'll be adding more layers to it. Every valuation technique will be detailed out with live examples .. ofcourse that'll be a bit more advanced for a 10 year old to understand but I'll ensure most of us do :). Thanks again!

@yosangle Жыл бұрын

This channel will soon have 1 million subscribers!

@shankarnath Жыл бұрын

Thank you for your kind words and good wishes

@yashadattadeo Жыл бұрын

Your method of explaining things is awesome!

@shankarnath Жыл бұрын

Thank you, glad you like those 🙌

@karthikeyanv463 Жыл бұрын

Thanks Shankar 😊 your videos are fun to watch...

@shankarnath Жыл бұрын

Glad you like them! Thanks

@srirampr007 Жыл бұрын

Thank you, Shankar, for this great video on a complex topic. In the times to come when the startups are getting overrated, understanding the valuation methodology would be highly critical for placing our bets.

@shankarnath Жыл бұрын

Well said, Sriram! Most welcome, I am glad you found it useful. This video was more of a precursor .. over the months, I'll be detailing every method with live examples.

@srirampr007 Жыл бұрын

@@shankarnath looking forward to it 👍

@watstherumour7134 Жыл бұрын

thank you is not enough, thank you for the video

@shankarnath Жыл бұрын

Most welcome

@b.r.srihari4099 Жыл бұрын

I have been watching videos for a while now.....Great videos!!! Keep it up!!

@shankarnath Жыл бұрын

Awesome! Thank you sir

@vamsikrishna24 Жыл бұрын

Love your videos sir

@shankarnath Жыл бұрын

Glad you are finding them useful, Vamsi

@nabeelyahiya Жыл бұрын

Wonderful again❤

@shankarnath Жыл бұрын

Thank you so much Nabeel

@TheErns13 Жыл бұрын

nice you made this interesting

@Kabir2885 Жыл бұрын

Thank you sir

@shankarnath Жыл бұрын

Most welcome, Dhrukesh

@leninbabu8310 Жыл бұрын

wonderful sir

@shankarnath Жыл бұрын

So nice. Thx

@harikrishnanjavahar6718 Жыл бұрын

Really good information.

@shankarnath Жыл бұрын

Glad it was helpful, Harikrishnan

@yournextdoortraveller Жыл бұрын

awesome content and thumbnails are just beyond imagination.. ☺️😃

@shankarnath Жыл бұрын

Thank you Gopal

@mineshtemkar9963 Жыл бұрын

Learning with story line.. nice one. Eagerly awaiting for video on Benjamin Graham & effectiveness of Graham number.

@shankarnath Жыл бұрын

Thanks

@Yogee7777 Жыл бұрын

Super explanation Appa ! 😀

@shankarnath Жыл бұрын

Thank you Kanna

@prdudi5939 Жыл бұрын

Great analysis sir ji. In future you will be millionaire

@shankarnath Жыл бұрын

Hope so. Thanks for your kind appreciation

@narmadharavichandran2426 Ай бұрын

Wow. Tamil. Goosebumps.

@sivachandran9565 Жыл бұрын

Appa , chiththappa , magane hearing Tamil words from you sir. Looks nice . Thank you for consideration 🙏🏻

@shankarnath Жыл бұрын

Thanks!

@viveksingla4095 Жыл бұрын

Great topic. Many thanks for covering this one. Pls see if it could be convenient for you to put the most appropriate valution method for the aparticular industry in an Excel link. Also, I believe PEG Ratio could also be seen along with Earnings multiplier👍

@shankarnath Жыл бұрын

Hello Vivek,: 1. I have been analysing an industry every few weeks and will continue this practice. Infact, this weekend's video is on the hotel industry. Have a look at this playlist: kzfaq.info/sun/PLJND7T5G_LHBb9yBelV9cxf9DNEAmON87 2. Yes, the PEG ratio is a variation of the earnings multiplier. PEG ratio is the PE Ratio divided by the Earnings Growth

@karthikbalan2814 Жыл бұрын

All your teachings to enter a stock is good sir... Also throw light on When to sell stocks ? How many quaters we have to wait if a company is not performing well ? Red flag signs to look for ? Kindly guide us sir

@shankarnath Жыл бұрын

Hi. Pls watch my latest video. The "when to sell stocks" part is covered there kzfaq.info/get/bejne/mrCchc9hxrC8Y30.html

@deepak2012able Жыл бұрын

Shankar bhai , your becoming creative. 🙏🐕✨💯

@poojakumarijha Жыл бұрын

very entertaining video !!!

@shankarnath Жыл бұрын

Glad you enjoyed it

@abhishekdey9717 Жыл бұрын

I subscribed your channel Sir, just such a calm way to explain things. Hope to get in connect soon Sir. Thanks 🙏🏻

@shankarnath Жыл бұрын

Thanks and welcome aboard!

@ABhishekSIngh1016 Жыл бұрын

Thank you for these videos. Please post a video analysis of the several NPS fund managers - their style of investing across the caps and returns.

@shankarnath Жыл бұрын

Most welcome. Thanks for the suggestion, I'll add it to my content queue

@nischalreddy27 Жыл бұрын

Good One Nath.

@shankarnath Жыл бұрын

Thanks

@jayaramans7398 Жыл бұрын

Thanks for detailed explanation. Can you share some examples of valuation of a stock using this sir?

@shankarnath Жыл бұрын

Most welcome Jayaraman. Yes, I'll definitely do that when I make a detailed series on valuation.

@saradbratamishra6948 Жыл бұрын

1st like from here sir and 1st comment too

@shankarnath Жыл бұрын

Great 👍

@Rajesh.A Жыл бұрын

U r an excellent teacher. Didn’t know u speak tamil😂

@shankarnath Жыл бұрын

Thanks!

@ashishprasadbhardwaj3777 7 ай бұрын

Namaskar Shankar Ji, I extend my gratitude for the wealth of knowledge imparted through your insightful video. Inspired by your teachings, I explored financial platforms, including Ticker by Finology and Screener. However, I observed disparities in the Price-to-Earnings (PE) ratios or values for the same stocks on both websites. Could you kindly shed light on and clarify the reasons behind these variations? Your insights would be greatly appreciated. Regards

@shankarnath 7 ай бұрын

Namaste. Sorry Ashishji, I am not sure but one of the probable reasons can be in terms of which earnings information is used i.e. one platform might use last year's EPS while another one might be using the latest 4 quarters EPS.

@ashishprasadbhardwaj3777 7 ай бұрын

@@shankarnath Thank you for your prompt response. I appreciate your insights on the possible reasons for variations in PE ratios across financial platforms. Building on this, I would like to seek your guidance on the most effective ways to influence and optimize the PE ratio. Could you kindly share your expertise on the key parameters or strategies that can be employed to drive the PE ratio in a favorable direction? Understanding these aspects would undoubtedly help in making informed decisions and maximizing the benefits derived from this valuable metric. I am eager to learn from your wisdom, Shankar Ji. Your guidance is immensely valuable to me, and I look forward to implementing your teachings in my financial endeavors. Thank you once again for your time and assistance. Best regards, Ashish

@rajkumarr4209 Жыл бұрын

Nice video

@shankarnath Жыл бұрын

Thanks

@manikandangovindarajan8161 Жыл бұрын

Sir, super ah tamil pesureenga, neega tamil ah, ungala pathi sollunga oru video la

@shankarnath Жыл бұрын

Vazhkai pati eda time illai .. romba buzy. Maybe some other time :) .. thx Manikandan

@chandranandhar3716 Жыл бұрын

Great video Shankar. May I know why you have not included Reverse DCF as a valuation technique here? I personally think reverse DCF is easier to use than DCF as it is more difficult to project cashflows, but easier to see by how much the company has to grow each year to achieve my target price.

@shankarnath Жыл бұрын

Hello Chandranan. Thanks for you note and fair enquiry. You would have noticed the DCF was the toughest of the 8 techniques for a beginner to understand. Most of us don't think in terms of present value although we understand the concept of time value. Adding "reverse DCF" might have been a bit too much for that fictional 10-year old :). However as I said in the video, I'll detail out most of the techniques with examples and scenarios in future videos and will explain other techniques (incl. reverse DCF) as the content demands.

@chandranandhar3716 Жыл бұрын

@@shankarnath thank you for your reply. I agree with what you said, and would appreciate if you add a detailed video on DCF and reverse DCF in your video pipeline. You are doing great work!

@krishnakumar8053 Жыл бұрын

Anna...Pl make video about what to avoid in investing... Where v have to be careful

@shankarnath Жыл бұрын

I'll try. Thank you for your suggestion.

@rajkhumar001 Жыл бұрын

Bro. Tamizh uh? Glad that.

@think-tank6658 Жыл бұрын

@sankar Nath you are going to be legend

@shankarnath Жыл бұрын

Thank you for your kind words

@shaikakber4717 Жыл бұрын

❤

@santhoshvellingiri9562 Жыл бұрын

Tamil ah❤️‍🔥

@jangajarn 28 күн бұрын

You are Tamil! Yay! 😊

@pradnyamorey1898 Жыл бұрын

Will you please explain DCF method on excel sheet, as mentioned in the video?

@shankarnath Жыл бұрын

Yes, will do at some point in time. Thanks for reminding

@pradnyamorey1898 Жыл бұрын

@@shankarnath Thank you very much for the prompt reply.

@akhilgupta6673 Жыл бұрын

I have become a fan of younger Shankar

@shankarnath Жыл бұрын

Thank you Akhil. He's 10 .. Buffett was 11.

@manjunathdeshpande7147 Жыл бұрын

🙏🙏🙏

@atorbfire Жыл бұрын

Hope you do a video elaborating the data you shared in a previous video -ANNUALIZED RETURNS AT DIFFERENT PE RATIO BANDS (eg. returns upto to 9% if the PE between 19 and 21, u[pto 24% if the pE is below 12 etc). Also the PE ratio may hit an ATH during each market cycle it seems. So we may not see a PE ratio band of 12 again, for eg. next range of PE ratio may be a high of 40 and low of 20.

@shankarnath Жыл бұрын

Thank you for your suggestion. I have something already planned

@atorbfire Жыл бұрын

@@shankarnath awesome 👍🏻

@millennialmind9507 Жыл бұрын

You are the finance guru, are you an economics grad?

@shankarnath Жыл бұрын

Nope, I did my Bachelor of Commerce from Delhi University

@NS-bc3wv Жыл бұрын

I am also from TAMIL NADU

@sunitkumar8 Жыл бұрын

आपके हिंदी रुपांतरण इंतजार रहेगा

@shankarnath Жыл бұрын

बेशक। कृपया थोड़ा धैर्य रखें

@Nandha.R Жыл бұрын

Sir, are you from Tamilnadu?

@nikhilbansal4542 Жыл бұрын

Make a video on how we use artificial intelligence in finance

@shankarnath Жыл бұрын

I'll add it to my content queue. Thx for the suggestion

@itsalrightbb Жыл бұрын

That kanna is me XD.

@shankarnath Жыл бұрын

Ok, test next week. Multiple choice, -0.25 for wrong answers :)

@justforfun2844 Жыл бұрын

Appa, Ajji, Filter Coffee, Starbucks reference?

@saulgoodman980 Жыл бұрын

How is book value different from liquidation value?

@shankarnath Жыл бұрын

The liquidation value is what remains after all assets have been sold and liabilities paid off. The assets are sold at market prices and in most cases, even lower as it represents a firesale. On the other hand, book value is not aligned to market value and uses the historical cost of the asset. This book value vs market value/liquidation value is an important difference and smart investors have exploited it in the past in deep value investing situations especially when it comes to value of property. If you want to know more, read from slide 26 onwards: www.slideshare.net/bakshi1/deep-value-or-value-trap (the case of GESCO Corporation)

@drpjmahanta1896 Жыл бұрын

" Dr Watson - Stage a lost a greatest actor - as Sherlock Holmes decided to become a consultant Detective. " After observing Your Act, Expression & Word delivery & Accent in all these videos - May I ask you Mr Narh - aren't you in a wrong profession?

@shankarnath Жыл бұрын

"But my dear, Dr. Mahanta. It is I, who has found his stage". A theatre called KZfaq that can accommodate millions if not billion, a theatre where feedback is instant, a theatre where I can experiment multiple roles, a theatre which is educating, entertaining and in my case, liberating :)

@drpjmahanta1896 Жыл бұрын

@@shankarnath well articulated, Sir. I always bland real time incidents from various fields to make my deliberation interesting to my students & patients. Hats off - you are a in a different level !!

@anandganesh377 Жыл бұрын

R u a chennaite?

@shankarnath Жыл бұрын

No. I'm from New Delhi

@anandganesh377 Жыл бұрын

@@shankarnath But accent and expression behind " Yenna Periya Valuation" was flawless 😂 Honestly you beautifully explained the concepts, it took 2 months for me to finish the book but you explained very lucidly. Vera level vaathiyaare 🔥

@yaniv9 Жыл бұрын

Crazy son😂

@barathv9910 Жыл бұрын

i didnt know u were tamil

@RishabhRajeshJain 3 ай бұрын

I love your videos Shankar, the day is not far away when you will get a lot of followers and subscribers. Please remain grounded even then unlike other Srivastavas.

@shankarnath 3 ай бұрын

Thank you very much for your kind wishes. I'm surprised to see such a spiteful comment on Akshat. I have spoken to him 4-5 times and he's always been patient, very open to share & respectful to me. I sincerely hope you're not making a character assessment based on what you watch/read on social media

@technologyinhindi5526 Жыл бұрын

How effective is dividend yield as a valuation metric compared to PE ratio?

@shankarnath Жыл бұрын

In my opinion, not much. Here's my thought process: the total returns a shareholder receives is about 13% an year of which 1.5% is dividend (or 10%). This adds more weight to price appreciation which ends up being a factor of the earnings. Incidentally the the dividend amount is also a factor of earnings so earnings is important in both cases and therefore the PE ratio.

@ananygoel1703 Жыл бұрын

Plz make a video on mark minervini method of investing

@shankarnath Жыл бұрын

I'll try. Thanks for the suggestion

@daksv4429 2 ай бұрын

I have a query. How can we value a service orientated company who bills the client per resource basis similar to valuing the bookshop per sqft. Can someone explain the calculation pls