Value Investing Software from Stock Research Pro
The Stock Research Pro Valuation software package provides the tools that value investors need to assess the financial strength of a company and arrive at the real or “intrinsic” value of a stock, based on industry-standard formulas. No other value investing software package offers all of the tools that SRP combines into a single environment, giving the value investor a comprehensive look at the stock before making an investment decision.
Value Investing and Stock Intrinsic Value
The SRP Valuation software benefits the value investor by providing multiple ways to calculate the intrinsic value of a stock, including:
Benjamin Graham Formula: In his book, the Intelligent Investor (published in 1949), Benjamin Graham (often referred to as “the father of value investing”) outlined a formula for investors use to arrive at the value of a stock. The formula considers company earnings and growth expectations while leveraging available bond yields to arrive at what could be considered a stock’s appropriate value.
Discounted Cash Flow (DCF): Under the discounted cash flow approach to stock valuation, the company’s free cash flow, debt, and growth expectations are factored to arrive at the stock’s intrinsic value. The DCF calculation assumes that in determining the real value of a stock, the investor needs to look at future cash flows and discount those appropriately (by applying a discount rate) to a value today. Company value is then the sum of those cash flows discounted appropriately.
Dividend Discount (Gordon Growth) Model: The Gordon Growth Model is the best known of the dividend discount valuation models. These models can be applied for valuing the stocks of larger, more mature companies as they (similar to the DCF model) discount future cash flows (dividends) by the required rate of return set by the investor.
Assessing the Financial Strength of the Company
The SRP Valuation software offers two additional modules to determine the financial strength of the company:
Net Current Asset Value per Share (NCAVPS): Another Benjamin Graham formula, the NCAVPS looks at current assets in relation to total liabilities to make its assessment.
Ratio Analysis: The Valuation software also streamlines the data collection and formulas for looking at liquidity, leverage, efficiency, and profitability ratios.
Each module includes a video tutorial to guide you through the process.
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The above information is educational and should not be interpreted as financial advice. For advice that is specific to your circumstances, you should consult a financial or tax advisor.
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