What is the intrinsic value of a share?

What is the intrinsic value of a share?

The intrinsic value of a share is the actual and correct value of a stock, based on the fundamentals of its issuing company.

Besides the fundamentals of the firm, which are the numerical values written in its financial statements, the intrinsic value includes in its calculation also other aspects of the business, both tangible (for example, its assets and liabilities) and intangible (for instance, its brand or patents).

Value investing takes into account the intrinsic value in the valuation of the fair price of a stock: if it is above the current market price, the share is undervalued and should be bought by the investor; on the contrary, if it is below it, the stock is overvalued.

Moreover, the intrinsic value is usually used in the pricing of options.

Sources:

Advertisements

3 thoughts on “What is the intrinsic value of a share?

  1. Acavalar diversos arranjos de flores para conúbio, cada um com uma cor específica é uma
    forma de levar descontração, alegria e personalidade para a constituição da sarau.
    Se o mundo inteiro forem dispostos em uma mesa longa e retangular, é possível que-se decorar móvel com diversos
    arranjos, sendo todo um de tonalidade especial disposto no núcleo
    da parte, em uma fileira comprida e também completa.
    porque sei que Ela poderá ser realmente enriquecedora, tenha certeza. http://Tweezeit.com/jeep-compass-exclusive-review-ndtv-carandbike/

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s