Streetsmart Guide to Valuing a Stock: the Savvy Investor's Key to Beating the Market

Name: Streetsmart Guide to Valuing a Stock: the Savvy Investor's Key to Beating the Market
Price: 5.7 USD
Availability: InStock
ISBN: 9780071345279

ISBN-10: 0071345272

ISBN-13: 9780071345279

Edition: 1999

Authors: Gary Gray, Patrick Cusatis, Randall J. Woolridge

List price: $29.95

30 day, 100% satisfaction guarantee!

Marketplace

3 new & used from $5.70

what's this?

Rush Rewards U
Members Receive:

You have reached 400 XP and carrot coins. That is the daily max!

The process of stock valuation involves considering such variables as P/E ratio, revenues, current stock price and outstanding debt. This can put some individual investors off. This book offers a straightforward guide to stock valuation.

Book details

List price: $29.95
Copyright year: 1999
Publisher: McGraw-Hill Companies, The
Publication date: 5/27/1999
Binding: Hardcover
Pages: 234
Size: 6.30" wide x 9.10" long x 0.96" tall
Weight: 1.188
Language: English

Preface	p. xiii
Empower Yourself with Information!	p. 1
Measure Your Bungee Cord!	p. 1
The Focus of the Book	p. 2
The Four-Step DCF Approach to Valuation	p. 3
The DCF Stock Valuation Process	p. 4
Some Helpful Definitions Relating to Valuation	p. 5
Your Mortgage: An Analogy for Valuation	p. 6
Stock Valuation--Art, Science, or Hocus-Pocus?	p. 8
Stock Valuation Approaches: Where Does DCF Fit?	p. 9
Fundamental Analysis	p. 10
Technical Analysis	p. 13
Modern Portfolio Theory	p. 14
Our Valuation Philosophy	p. 14
Where Do We Go from Here?	p. 16
How to Value a Stock	p. 19
Valuation Insights or Stock "Tips"	p. 19
What Do We Mean by Returns to Stockholders?	p. 20
Calculation of Return to Stockholders	p. 20
Investor Expectations Regarding Stock Market Returns	p. 20
Investor Expectations Regarding Returns of a Stock	p. 22
Is a Stock Fairly Valued?	p. 24
Stock Value versus Stock Price	p. 25
The DCF Approach: Microsoft--A Simplified Valuation Example	p. 28
Forecast Expected Cash Flow	p. 29
Estimate the Discount Rate--The WACC	p. 31
Calculate Value of the Corporation	p. 34
Calculate the Intrinsic Stock Value	p. 35
The Next Step	p. 35
The Importance of Cash Flow	p. 39
The Spirit of Cash Flow Yet to Come	p. 39
Corporate Revenue, Expense, and Net Operating Profit Margin	p. 39
Coporate Free Cash Flow	p. 41
The Investment Rule for Corporate Management	p. 42
The Free Cash Flow to the Firm Philosophy	p. 43
Free Cash Flow--Share Repurchase Programs versus Dividends	p. 44
Free Cash Flow--The Corporation's Investment Decision	p. 44
The FCFF Approach--Where Does It Work?	p. 45
The Discounted FCFF Valuation Approach	p. 45
The Four-Step Process	p. 45
The Excess Return Period and Competitive Advantage	p. 47
The Three Valuation Categories	p. 49
Why DCF and Not EPS?	p. 51
Valuation--Growth Versus Value, Large Cap versus Small Cap	p. 52
Valuation--The Next Step	p. 55
The Five Most Important Cash Flow Measures	p. 55
Forecasting Expected Cash Flows	p. 55
Revenue Growth Rate and the Excess Return Period	p. 56
Microsoft's Revenue Growth Rate	p. 57
McDonald's Revenue Growth Rate	p. 60
McDonald's Excess Return Period	p. 62
Valuation Inputs Relating to Revenue Growth and Excess Return Period	p. 63
Net Operating Profit Margin and NOP	p. 64
Valuation Input Relating to NOPM	p. 65
Income Tax Rate and Adjusted Taxes	p. 66
Valuation Input Relating to Tax Rate	p. 67
Net Investment	p. 68
Valuation Inputs Relating to Net Investment	p. 71
Incremental Working Capital	p. 72
Valuation Input Relating to Incremental Working Capital	p. 74
Free Cash Flow to the Firm--The Next Step	p. 75
Valuation Exercise: Estimating Free Cash Flow for McDonald's	p. 75
"Don't Count Until You Discount!"	p. 81
Estimating the Cost of Capital	p. 81
The WACC as a Portfolio Return	p. 82
How to Measure the Cost of Capital	p. 83
Interest Rates, the Company's WACC, and Stock Values	p. 83
Calculating the WACC and Market Capitalization	p. 85
Market Value Versus Book Value	p. 85
Estimating McDonald's WACC	p. 87
Valuation Inputs Relating to Cost of Capital and Market Capitalization	p. 87
The Cost of Common Equity and Shares Outstanding	p. 88
The Risk-Free Rate and Expected Returns	p. 89
The Return Relating to Common Stock in General	p. 89
The Return Relating to an Individual Stock	p. 90
Expected Return and the Capital Asset Pricing Model	p. 91
The Amount of Stock Outstanding--The Problem with Options	p. 91
The After-Tax Cost of Debt and Debt Outstanding	p. 93
The Spread to Treasuries--A Measure of Default Risk	p. 93
The After-Tax Cost of Debt	p. 94
The Cost of Preferred Stock and Stock Outstanding	p. 95
After the Cost of Capital--The Next Step	p. 97
Valuation Exercise: Estimating the WACC for McDonald's	p. 97
Where and How to Obtain Information for Valuations	p. 101
Show Me the Info!	p. 101
The Hard Way	p. 101
The Easy Way	p. 102
The Internet and the World Wide Web for Investor Information	p. 103
Corporate Web Sites	p. 103
Web Sites Devoted to Investment Information	p. 105
Corporate Valuation--Easy-to-Find Inputs	p. 106
Income Statement Information	p. 106
Balance Sheet Information	p. 106
Cash Flow Statement Information	p. 107
Valuation Inputs Requiring Estimation	p. 109
Valuation Inputs for Cost of Capital	p. 112
Current Stock Price and Shares Outstanding	p. 113
30-Year Treasury Bond Yield	p. 114
Company Bond Yield Spread to Treasury	p. 115
Company Preferred Stock Yield	p. 115
The Equity Risk Premium	p. 116
Company-Specific Beta	p. 116
Value of Debt and Preferred Stock Outstanding	p. 117
Custom Valuations--The Next Step	p. 117
Valuation Exercise: McDonald's	p. 118
Valuations in Action	p. 121
Overview	p. 121
Valuation of Microsoft	p. 122
General Description of Microsoft--The Quintessential Growth Company	p. 122
Baseline Valuation of Microsoft--August 27, 1998	p. 123
Microsoft Valuation--Two-Stage Growth	p. 131
Valuation of Intel	p. 133
General Description of Intel--A "Great" Growth Company	p. 133
Baseline Valuation of Intel--August 28, 1998	p. 134
Intel Valuation--What If There Are Lower NOPMs and Lower Growth Rates?	p. 143
Valuation of Consolidated Edison	p. 145
General Description of ConEd--A "Decent" Utility	p. 145
Baseline Valuation of ConEd--August 31, 1998	p. 148
ConEd Valuation--What Growth Rate Is Needed to Justify $47.31 per Share?	p. 156
ConEd Valuation--What If There Are Higher Interest Rates and WACCs?	p. 156
Valuation of ATandT	p. 158
General Description of ATandT--A "Good" Value Company	p. 158
Baseline Valuation of ATandT--August 31, 1998	p. 159
ATandT Valuation--What If There Are Increased NOPMs?	p. 166
Valuation of McDonald's	p. 166
Baseline Valuation of McDonald's--September 1, 1998	p. 168
McDonald's Valuation--What If There Are Increased NOPMs?	p. 170
Where Do We Go from Here?	p. 174
A Spreadsheet Valuation Approach	p. 175
Layout of the Model	p. 176
General Input Screen	p. 176
Weighted Average Cost of Capital Screen	p. 177
General Pro Forma Screen	p. 181
Custom Valuation Screens	p. 183
How to Find the ValuePro Program	p. 185
Web Site Addresses	p. 187
Stock Market Efficiency	p. 189
Investors' Required Return on Stocks	p. 203
Glossary	p. 215
List of Acronyms	p. 225
Index	p. 227
Table of Contents provided by Syndetics. All Rights Reserved.