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basant
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   Posted: 16/Apr/2008 at 3:04pm |
While those growth figures could appear conservative over the next 1-2 year period it is better to go with conservatuve growth when trying to evaluate companies for a PEG analysis.
Edited by basant - 16/Apr/2008 at 3:06pm
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joslinjose9
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Posted: 16/Apr/2008 at 9:04pm |
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can anyone tell me abt PEG analysis.how to do this analysis.
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fear of lord is the beginning of wisdom
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deveshkayal
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Posted: 16/Apr/2008 at 11:11pm |
Originally posted by Musketeer
Originally posted by Musketeer
Originally posted by deveshkayal
Banks are normally valued on a Price/Book Value basis. Book Value is calculated as Equity Share Capital + Additional money received on shares (if any) + Retained Earnings (which is Profit after Tax - Dividends). So do the calculation for HDFC Bank and find out yourself ! |
About calculations of book value, I normally subtract all the liabilities (loans taken + current liabilities) from the assets and divide the result by the number of shares outstanding for getting the book value per share.
Would that give a different figure than the one obtained as you mentined?
You've given some indicative figures to employ while evaluating AMCs.
What data would be required to evaluate an insurance business and how to interpret that data? |
Let me try to answer this myself, I think both the numbers would be the same. |
I missed your post. Book Value will be the same.
As for valuing insurance business, this link should be useful. Valuing life insurance is tricky bcoz new business margin which is new business profit/new business premium depends on a number of factors such as product mix, composition of regular vs. single premiums, product pricing, policy persistency, agency attrition rate....I consider what management says. Valuations of Insurance business are normally done as:
New Business Premium*New business margin*New business multiple (range from 18-20)/Total no. of shares
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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett
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vijayM
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Posted: 16/Apr/2008 at 11:19pm |
Originally posted by joslinjose9
can anyone tell me abt PEG analysis.how to do this analysis. |
PEG = Price earnings ratio based on trailing 12 months/ Earnings growth rate
= (P/E) / EPS growth rate in percentage
For ex: Consider BHEL
Price = 1781
TTM EPS = 57.5
P/E = 31
PROJECTED 2009 MARCH EPS = 82.61
EPS GROWTH RATE = 43.67%
PROJECTED 2010 MARCH EPS = 109.64
EPS GROWTH RATE = 32.7 %
AVG GROWTH RATE = (43.67 +32.7)/2 = 38.18
PEG=31/38.18= 0.81(UNDERVALUED: buy)
Interpretation of PEG:
< 0.5 : strong buy
0.5 to 1 : buy
1 to 1.25 hold
1.25 to 2: avoid
>2 : sell
PEG analysis is simple but cannot be applied to all sectors. You should explore information on PEG analysis and study.
regards
vijayM
Edited by vijayM - 16/Apr/2008 at 11:32pm
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If a business does well, the stock eventually follows:Warren Buffett
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kvsbv
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Posted: 16/Apr/2008 at 3:05am |
It will be good if the sensex EPS, P/E, long term average P/E, say 2yr, 3yr & 5yr and present PEG value, & future EPS are shown on the web site, so that investors will be cautious while investing and also it helps, when to sell.
Somebody can take initiative and put it on the web. Please for the sake of those people who don't know about much of the financial terminology
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learn to earn & earn to learn
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deveshkayal
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Posted: 16/Apr/2008 at 9:56am |
Vijay jee,
EPS growth of above 40% for a large cap company like BHEL is just impossible. If that was the case then Sensex would have been trading at 20k+ right now !
Edited by deveshkayal - 16/Apr/2008 at 10:35am
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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett
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vijayM
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Posted: 16/Apr/2008 at 10:14am |
Originally posted by kvsbv
It will be good if the sensex EPS, P/E, long term average P/E, say 2yr, 3yr & 5yr and present PEG value, & future EPS are shown on the web site, so that investors will be cautious while investing and also it helps, when to sell.
Somebody can take initiative and put it on the web. Please for the sake of those people who don't know about much of the financial terminology |
I appreciate your concern. Let me putforth the PEG analysis for SENSEX.
SENSEX = 16244
TTMEPS = 784
TTM PE = 20.7
FY09 EPS =1000
FY10EPS = 1150
EPS GR RATE = (27.5 % + 15%)/2 = 21.25 %
PEG = 20.7/21.25 = 0.97 (BUY)
AVG PE FOR SENSEX = 18 (RANGE: 12 TO 25)
IN CALENDER YEAR 2009, SENSEX SHOULD QUOTE ATLEAST 20 x 1150 = 23000 some time in rallies & euphoria may take it up to 28000.
My strategy is to hold quality stocks and start applying trailing stoploss (10%) after reaching 23000 to retain profits.
Regarding your suggestion of maintaining separate thread on PEg analysis of Sensex on dynamic basis, I request the administrator to decide.
Comments from seniors are welcome.
regards
vijayM
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If a business does well, the stock eventually follows:Warren Buffett
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vijayM
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Posted: 16/Apr/2008 at 10:21am |
Originally posted by deveshkayal
Vijay jee, i hope you are not drunk. EPS growth of above 40% for a large cap company like BHEL is just impossible. If that was the case then Sensex would have been trading at 20k+ right now ! |
Devesh ji
My projections of FY09 and Fy10 are not my imaginations. After the latest results of BHEL, these are the consensus estimates of large number of brokerages. this you can get on icicidirect.com/research and also on uk.reuaters.com/estimates.
Further, our TED Guruji (Basant ji) has called my estimates as conservative in this link itself.
And regarding your comment on sensex level, market is right now drunk in not identifying value. I believe it will surely cross 23000 in calender year 2009. As Benjamin Graham said, in the short term, market is a voting machine and all of us know, right now the market has not discounted only the death of my grandmother as PNVijay said recently.
Cooments are welcome.
vijayM
Edited by vijayM - 16/Apr/2008 at 10:31am
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If a business does well, the stock eventually follows:Warren Buffett
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