Therefore, I would like to share some thoughts that Ben Graham, the father of value investing, offered on the subject of
the intrinsic value of a common stock.
Not exact matches
Divide the company
value by the number
of shares
of common stock outstanding to find the
intrinsic value of a share
of stock.
Value investing is one
of the most
common approaches to investment, a strategy that involves picking
stocks based on their
intrinsic values.
While there is much that remains unknowable in financial markets, what we do know is that Graham's «big idea» — that a
common stock represents a fractional ownership interest in a business and that the essence
of investment is to attempt to exploit discrepancies between the
intrinsic value of a business and its price in publicly traded markets — has empirically and practically worked over the long term.
In order to understand what the
intrinsic value or fair
value of a
common stock is, you must think like a long - term business owner and not like a
stock trader.
Divide the company
value by the number
of shares
of common stock outstanding to find the
intrinsic value of a share
of stock.