Intrinsic Value Calculator
The Intrinsic Value Calculator is based on Warren Buffett's "Ten Cap Price" otherwise known as "Owner Earnings" calculation. Buffett is calling Owner Earnings the most "relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses."
Per Warren Buffett's Value Investment Theory the buy decision should be based on several factors:
1. Company must have competitive advantage...
2. Company performed admirably in the past 10 years, recovered after market correction(s) and recession(s)...
3. Company must have long term prospects - be relevant in 10 years from now...
4. Company's market price should be 20-30% less than calculated intrinsic value - margin of safety price.
The logical question you would ask, is it possible for such a good company to have the market price 20-30% bellow intrinsic value? The answer is: YES! It is possible due to various reasons. Some of the reasons are: bad news about the company, company's industry is out of market favor, market is in correction or recession...
YES, Recession! You can read about our 2019 market analyses by clicking on DIY icon on the bottom of this window. All statistical data show that we are in the next Market Bubble similar to "DOT-COM Bubble" of 2001 and "Housing Bubble" of 2008. It is just a matter of time before current Market Bubble is popped presenting an opportunity for Value Investors to buy their favorite stocks for less than intrinsic value! But in order to buy your favorite stocks for less than intrinsic value you need to know what intrinsic value is. This is when our Intrinsic Value Calculator comes handy. You can calculate, store, reload and compare intrinsic value with market price anywhere and anytime, and all you need is your phone and our application.
You can read more about Value Investing online. We would really recommend - "The Intelligent Investor" by Benjamin Graham - Warren Baffett's favorite teacher and the founder of Value Investment Theory.
The goal of this application is to help investors not only to calculate intrinsic value but also to understand meaning of values and easy way of locating them. Most of the values required for calculation could be found on company's latest annual report. Annual reports can be found on company’s website in investor relations section. Values missing in annual report could be found on GOOGLE.
Each edit field has a corresponding help button to explain the meaning and location of the data on company's annual report.
"Example" button would display actual values for Apple Inc. company as of 2018 annual report. The market price of AAPL is $156.30 as closing of 1/25/2019. To see the result of updated comparison of market price to the intrinsic value you would need to update current market price.
"Save Data" button would save data to your phone storage at "IntrinsicValueData" folder as comma separated .CSV file.
"Load Saved Data" button would display list of files .CSV saved at "IntrinsicValueData" folder.
".CSV" files in "IntrinsicValueData" folder could be copied to PC and loaded to MSExcel for further analyses.
".CSV" files modified on MS Excel can be copied back to "IntrinsicValueData" folder. Try to keep the same format to avoid breaking Intrinsic Value Calculator.
To calculate Intrinsic Value based on Owner Earnings you have to add several numbers found on company's Annual Report: "
1. Net Income
2. Depreciation and Amortization
3. Net Change Accounts Receivable
4. Maintenance Capital Expenditures (should be negative number)
5. Income Tax
Multiply result by 10 and divide by number of shares.
This method doesn’t take growth into account.
This Application requires access to your local storage to save entered data as ".CSV" format and to read saved data.
This Application doesn't transmit any data from your phone and doesn't copy any data to your phone from external sources.
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This Application requires access to internet to redirect you to "Recession of 2019 and The Opportunity For Value Investors" article.
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This Application requires permission to READ_PHONE_STATE and CHECK_LICENSE in order to check for Google Play license.
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