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Strategies & Market Trends : Value Investing

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To: Kent J. Davis who wrote (3713)4/1/1998 1:27:00 PM
From: Alejandro  Read Replies (2) of 78519
 
" Earnings vary as a function of stock price rather stock
price varring as a function of earnings".

Yes, I use PE and EP in my formula. Also, PSR, profit/sales ratio, free cash flow, price/cashflow ratio.
There has been discussions on cash flow. Mine is as follows:
Cashflow = net income plus depreciation and amoritization
Free cashflow = cashflow less dividends and capitalization

Actually, I use the numbers right off Valueline. Well a picture is worth more than me trying to explain.
INPUT
PRICE 10.00
SALES PER SHARE 15.00
CASH FLOW 0.80
EA. PER SHARE 0.20
DIVIDEND 0.00
CAPITAL SPENDING 0.70
BOOK 1.95

PR/BOOK REF ONLY 5.13

That's what I input. The fomula does the ratios above etc.

For the heck of it, give me your thoughts on this one. Overvalued ? Under ? I don't get Valueline so I have to run to the library. I haven't learned how to get 'capital spending' and the cashflow I use from the Hoover etc yet.

ac
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