I briefly read through your analysis, and it appears as if you are basing your analysis on unreconciled earnings, which is analogous to building a structure on a weak foundation. MSFT earnings, for instance, are subject to significant deferrals, reserves, and mispriced contingent liabilities. Dell, happens to use the same methods. In order to use capitalized earnings to ascertain a credible present value for a company, you must first ascertain what those earnings actually are, the sustainability of those earnings, and any excess equity capital equivalents that have not been reported in the financial statements.
Keeping your intrinsic value idealogy in mind, I invite you to read the Case Against Earnings at rcmfinancial.com
Afterwards, I welcome you to debate the relative merits of the respective approaches to "realistic" valuation. |
