Intrinsic value of a stock

[aim-high]

I have been doing some research on figuring out what company stock to buy now that the Dow is at 9K level. I generally start the process like this, Go to finance.yahoo.com or finance.google.com, search for the company stock I want to buy , look at their current price, how they have performed in the last few months, over a year etc, P/E, EPS, Dividend/yield etc . I then go through the company's balance sheet, Cash flow and income statement to make sure the company's health is doing fine. I then read through the message boards and see what ppl think about that stock. I also follow newspaper/tv business news and see if that company is being discussed and get information.

Having done all of this, I am still not sure if I am paying the correct price for the stock. I do see ppl talk about intrinsic value of stock. But from my google search , I have not been able to figure out a good intrinsic value calculator for the stock. Can anyone please recommend me one ?

[buildmybudget]

There are some pretty good tutorials on Morningstar's website that should help you with evaluating a stock price. They even get into calculating what the price should be. In addition, if you read the Intelligent Investor you'll be able to get some more insight on how to value using book value,etc. These are just a few places you can start...

[aim-high]

>> There are some pretty good tutorials on Morningstar's website that should help you with evaluating a stock price. They even get into calculating what the price should be.

That is exactly what i would like to see but I searched in the Morningstar and I could not find those. I am not a premium member and If you can point me to the web link that would be great.

[Broken Arrow]

For fun more than serious use, I like this calculator.

I also recommend getting the book, "The Intelligent Investor" by Benjamin Graham. As far as I know, he is the one that pioneered modern investing and the concept of intrinsic value.

For what it's worth, I never really know if I am paying what is considered as a "fair price" either. In fact, I never look at the price when I make a buy or sell. I am more interested in "how much obvious upside is there relative to its downside"?

Also, if we are talking about stock trading, please know that the market sentiment is quickly turning sour recently. A lot of people (including myself) are bracing for a potential Second Dip, where the Dow could take another substantial drop.

When stock trading, please don't focus on how much it costs, but more along the lines of how much you're willing to lose on the buy. I believe risk management should be every trader's central focus.

[jasonnoguchi]

Determining the "intrinsic value" of a stock is an extremely tricky matter. The only sure measure is the net book value of a company but to find stocks below a company's net book value is next to impossible.

[kenyantykoon]

i wanted to add my two cents in this discussion but the info i have got here has far overshadowed what i wanted to add. i have this book the intelligent investor but havent read it yet. i will start it immediately

[LuxLiving]

I use Value Line at the library.