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Strategies & Market Trends : Fundamental Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: bruwin who wrote (2932)	4/19/2013 4:09:53 PM
From: E_K_S	Respond to of 4719

Yes many times the GN will not show a discount to the market price. I think F which was one of our choices had a pretty good GN but not a 10 year history of positive EPS. GLW was selling below it's GN but it is selling about where it was 8/17/2012. Still an interesting analysis. EKS

To: bruwin who wrote (2932)	5/19/2013 1:28:45 PM
From: E_K_S	Read Replies (2) \| Respond to of 4719

Hi Bruwin - Re: Archer Daniels Midland Company (ADM) -NYSE - new 52wk high: last $35.00/share Sorry I took so long to get back to you on ADM. I was calculating the EKS$ and think in the earlier post you may have used an incorrect BV (and/or TBV). I based my calculation on a BV of $28.76/share ( as reported by YAHOO Finance) not the $63.05/share you used in your calculation. I always like to error on the low side and you may have included a figure that may have been overstated w/ goodwill and/or other intangible asset(s). Therefore, using the 2013 Analysts estimates of $2.40/share (your estimate was $2.49/share), the EKS$ comes in at $39.40/share. In fact, the very conservative approach takes the recent full year of earnings. So, for the year ending June 2012, EPS was $1.86/share. The very conservative EKS$ value is: sqrt (22.5x$28.76x$1.86) = $34.39/share. So the fair value price range is between $34.39/share and $39.40/share. Friday May 17, 2012 closing price was $ 35.00/share. I now have this one as a possible sale if I can find another candidate stock that pays a higher dividend an is selling as a discount to it's $EKS and/or $GN. FWIW, It's nice to see some more interest in GLW as this one is selling at a significant discount to it's $GN. Although it is at times difficult to find stocks that sell at a discount to their GN fair value, I do find that eventually they play out and even exceed that fair value estimate if the investor is patient enough (sometimes it takes 18-24 months). I am finding a lot of candidate stocks now in the Natural Resource sectors which may go lower, but sometime they too will exceed their $GN valuation. EKS