2013-08-25

By Valuentum:

By Brian Nelson, CFA

Intrinsic value represents the conclusion to any and all stock research: What is the company worth? DCF valuation captures the expectations of a firm's competitive advantages, growth prospects, strategic endeavors, and any other qualitative factor. No other process does this. Putting to numbers a plethora of advanced fundamental items in arriving at a fair value estimate is the cornerstone -- and the most critical component -- of any stock research analysis. Without an in-depth intrinsic-value assessment, research is but a story that has no ending.

-- Valuentum Securities, 2011 slide deck

Sometimes I have to remind myself that I was once a youngster, too. I remember pitching stocks to my portfolio manager and the chief investment officer. It was fun.

I remember the buyside firm I worked at back then had a methodology that didn't require calculating the intrinsic value of a firm. I remember a

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