Daniel,
One way to value your target would be to find "comprables," say five or six that have similar characteristics. Dover would be one example, and maybe grainger and GPC, there are many. See what the market is telling you. Compare that to what your target is selling at. It may be in line but it also might not be. Then start asking yourself why. Perhaps there is a reason ( check the footnotes, etc.) Also, ask yourself, given the present level of interest rates, why the comprables are trading where they are, and does THAT seem correct. Getting the annual reports of comprables is also suggested. But I think this exercise will give you a feel for valuations. Paying attention to transactions, especially CASH, transactions, will help too. |
