Stock Valuation and Analysis

Most people think that the way to make money on the stock market is by buying shares at one price and selling them at a higher price. But prices are unpredictable and often influenced by the irrational activity of less disciplined investors. Trying to second-guess these people consistently is futile. Sometimes you win. Sometimes you lose.

Value investing is different. It is based on the idea that when you buy shares you are buying a piece of a business. The business performance creates the value and the price creates the opportunity. The aim of value investing is to buy assets for less than they are worth and let the performance of the business determine your return.

In the short term the market is a voting machine, but in the long term it is a weighing machine. So over time, price will follow the rising value of a business with superior performance. Once you have found such a business and accept this approach, you no longer compare yesterday's price with today's or try to anticipate tomorrow's.

Instead you simply want to know if the price you are paying for shares is good value in relation to the performance of the business and the income it generates. This business-based value investment approach is the reason for StockVal.

StockVal is unique. No other investment tool in the world uses the same rational mathematical formula to estimate the value of a company. The valuation estimate is based on balance sheet equity, the return the company can sustainably generate from that equity and the manner in which it reinvests and distributes its earnings.