Stock Valuation Model - 3 Simple Techniques to Value Stock

Stock valuation models are methods that have to value. Everyone knows the stock but only few understand how much it pays, and the other investors do not even care. If you are an intelligent investor, consider these valuation models in your next purchase.
Discounted cash flow (DCF)
This is probably the most common model that you ever heard when it comes to stock valuation. However, I found it a little hard to do. Quite simply, because theDiscounted cash flow model, revenue growth and escalating costs at the same time consider that can be difficult to estimate and forecast than one external investor.
However, this method can be used in the assessment by the projection of future cash flows of revenues and costs and discount back to present value Weighted Average Cost of Capital (WACC).
Dividend Discount Model (DD)
This model is best for income investors. The idea is to project futureBased on the average historical dividend payout ratio and discount it back to present value. Although this is the easiest of all, it works best for high dividend yield stocks.
However, the stocks must have very strong business development services, the dividend payments are guaranteed 10 years on the road. And usually, penny stocks can not be evaluated in this way.
Earnings Growth Model (EC)
This is my preferred method because it is very practicaland easy to do. Originally project I their future income with constant or variable growth rate. Is either constant or variable growth rate depends on the expectation of business development in this period. As often, I normally use the historical business development as a basis, provided that the fundamental value is preserved. Then, I discount the future earnings with the expected return on investment (ROI).
I have this model as a very valuable, since the stockPrice is slightly reflected by the gain, such as PER.
So before buying more shares in the future to put some effort value of the stock. You may risk losing too much money if you buy the stock at much lower price than their intrinsic value. Find out how to have value in http://www.Stock-Investment-Made-Easy.com/calculate-intrinsic-value.html