How much do you determine the value of shares? This question concerns many investors.
There are several ways to value a share. Some investors focus on the net asset value, while others attach a lot of value to the price development. In this article I show how I fundamentally value a company and which characteristics I consider important.
My stock valuation has several steps, which I will discuss separately:
- How sustainable is the business product?
- What are the advantages of the company over the competition?
- What kind of return does the company get from the invested capital?
- How does the company invest its available capital?
- How much do I pay for the share in relation to the assets?
- The value of growth
- What does the market think and do I have a different opinion?
- Conclusion: what is the share worth?
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