NAV?

[Zip113]

hey guys need some guidance here.

what does NAV means and how do u all evaluate the performance of a company with the value? what is the ideal margin u guys looking at?

[iff]

..
Just like to share what I know,
NAV = Total Asset - Total Liability

and NAV = Shareholder's Equity
(not 100% sure abt this, anyone could confirm on this?)

The NAV is an indicator of intrinsic value of a share,
and it should grow over year as the company grows, thus there comes this ROE (return on equity),

The share price may not follow NAV anyway, but it serves as some valuation guidance especially for REITs type counters.

[Musicwhiz]

The NAV is an indicator of intrinsic value of a share,
and it should grow over year as the company grows, thus there comes this ROE (return on equity),

The share price may not follow NAV anyway, but it serves as some valuation guidance expecially for REITs type counters.

A correction here - NAV represents the BOOK value of a share, and not its intrinsic value according to value guidelines. Instrinsic value is a more amorphous concept which incorporates qualitative aspects and management quality as well, and a precise number is often elusive.

But yes NAV should grow in time if the company retains earnings.

Share price does not follow NAV closely, and some refer to this as price/book ratio (PB ratio). There have been many value traps associated with buying based on book value, so I won't go into those. What I am saying is that book value is just a rough guide, but should not be used in isolation when evaluating a company to invest in.

[iff]

Hi Musicwhiz,
Yes the word "book value" is more accurate, thanks for pointing this out

[redcorolla95]

The NAV is an indicator of intrinsic value of a share,
and it should grow over year as the company grows, thus there comes this ROE (return on equity),

The share price may not follow NAV anyway, but it serves as some valuation guidance expecially for REITs type counters.

A correction here - NAV represents the BOOK value of a share, and not its intrinsic value according to value guidelines. Instrinsic value is a more amorphous concept which incorporates qualitative aspects and management quality as well, and a precise number is often elusive.

But yes NAV should grow in time if the company retains earnings.

Share price does not follow NAV closely, and some refer to this as price/book ratio (PB ratio). There have been many value traps associated with buying based on book value, so I won't go into those. What I am saying is that book value is just a rough guide, but should not be used in isolation when evaluating a company to invest in.

Actually, even without having to make all the adjustments from Book Value to Intrinsic Value, one of the best simple strategies is to buy the cheapest decile and rebalance monthly/yearly. Beats the index far more reliably than most big time asset managers.

[DeepValueInvestor]

What is NAV? From an investing perspective, NAV is Net Asset Value. How to calculate Net Asset Value (NAV). Calculating Net Asset Value is theoretically as simple as: NAV = Total Assets – Total Liabilities. There are some differences in the... Net Asset Value

You may also want to check out Net Nets (this is the basis for one of Graham's most straightforward value investing strategies)