Hi, since you are interested in this subject, I would also recommend 3 other books that talk about Intrinsic Value (I use them all to value my investments):

1. The Warren Buffet Way by Robert Hagstrom: it gives worked examples on how Buffet calculates IV using DCF with growth

2. Value-able by Robert Montgomery: he also gives a simple look-up table to calculate IV based on a company's ROE and growth

3. The Intelligent Investor by Benjamin Graham: surprisingly, instead of taking about net-net approach, he suggests a more judgment based method to calculate IV based on the company's past track record

Obviously, I cannot elaborate any further as this thread is about Keong Hong, but I leave it for you to pursue if you are interested. Happy reading!

(13-01-2015, 11:29 AM)thor666 Wrote: (13-01-2015, 10:07 AM)sykn Wrote: Hi, intrinsic value can be calculated in many ways; I recommend for your reading, Value Investing from Graham to Buffett and Beyond by Professor Bruce Greenwald of Columbia Business School. His view is that we can calculate this value in 3 fundamental ways - the Asset Reproduction Value (ARV, explained in his book), the Earning Power Value (EPV) assuming no growth in future net profits, and EPV with assumed growth (used by Buffett and some others) which he does not advocate and gives very good arguments why so in his book. My estimate of ISOTeam's ARV is 30 cents and EPV is 86 cents based on its FY14 annual report. As for Keong Hong, I'm new to the counter and haven't gotten round to do this computation yet; I bought in because of its high ROE and recent low price, although I note that this ratio has been declining since FY12 albeit to a respectable 20's in FY14. Hope it helps.

Hi skyn, thank u for the resource! Though I am not vested, have been looking to analyze intrinsic values too.

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