Is there any simple strategy or formula to identify intrinsic value of a stock?
Yes there is.
- Multiply the earnings per share (EPS) by 15 and you will get one intrinsic value based on earnings.
- Multiply the book value per share by 1.5 and you will get another intrinsic value based on value of assets.
- The minimum of the two intrinsic values can safely be taken as the intrinsic value of the share of the company.