The Use of Indicators in Modified Historical Model to Estimate the Intrinsic Value of a Stock
Journal Title: Journal of Competitiveness - Year 2012, Vol 4, Issue 2
Abstract
The article mentions several methods of a fundamental analysis used to value stocks. It primarily focuses on the historical model. This model enables undervalued, correctly valued and overvalued stocks to be identified. The model is further modified in the article, using selected accounting indicators. The modified model versions are applied to selected stocks in the SPAD segment, Prague Stock Exchange, within the 2005-2010 period. Empirical analysis is applied to a comparison of accuracy of the accounting indicator value estimates and accuracy of stock intrinsic value estimates, both separately for each stock and accounting indicator. The comparisons of accuracy of the accounting indicator value estimates and the accuracy of the stock intrinsic value estimates are also done based on the length of applied time period. With respect to the obvious fierce competition between stock issuers within the financial markets, the model enables potential investors, who are to select from an extensive offer of stocks, to make better informed investment decisions.
Authors and Affiliations
Radim Gottwald
Keywords
Related Articles
- EP ID EP150873
- DOI 10.7441/joc.2012.02.07
- Views 134
- Downloads 0
Strategic Planning and Business Performance of Micro, Small and Medium-Sized Enterprises
This paper deals with issues of strategic management, particularly strategic planning and its beneficial effect on the overall performance of businesses. It is based on empirical results of the original research study ca...
Positive Word of Mouth Marketing: Explaining the Roles of Value Congruity and Brand Love
Many companies have found that for their products to be successful in the market, they must first pay for word of mouth marketing and then utilize other types of ads. Previous studies have not paid enough attention to th...
Competitiveness and Economic Growth in Romanian Regions
Considering the fact that Romanian economy competitiveness is not based on innovation and investment in human capital, this study makes an empirical evaluation of the impact of occupation and unemployment in Romanian cou...
Material Deprivation in Selected EU Countries According to EU-SILC Income Statistics
The article deals with issues of households at risk of poverty in relative conception. Income poverty means a situation when the threshold of 0.6 of median income is not achieved. The analysis of a broader definition of...
The Hierarchical Clustering of Tax Burden in the EU27
The issue of taxation has become more important due to a significant share of the government revenue. There are several ways of expressing the tax burden of countries. This paper describes the traditional approach as a s...