Using a DCF Model to Value a Stock

Investors are inherently predicting the future. Whether with an individual stock or a basic index fund, deciding to park your savings in a financial asset means you are making a bet about the future value of that asset. Otherwise, why would you buy it? Suppose you treat stock analysis as no different than analyzing a […]

Reading the Numbers: How to Analyze a Stock as a Beginner

Gross margin. Marketable securities. Earnings per share. These are all words you will find on the financial statements of publicly traded companies. Otherwise known as stocks. If you’ve never taken an accounting course, you likely have no idea what these terms mean. Analyzing stocks can be daunting for first-timers. There is foreign-sounding language, confusing SEC […]

The Limitations of The P/E Ratio

If you have learned basic stock analysis, odds are you have learned the price-to-earnings ratio (P/E). A simple equation you can build for any company, the P/E tells you what multiple a stock is trading at compared to its current earnings power. It gives you a quick snapshot of how investors are valuing a business. […]

What Is a True Luxury Company?

The word “luxury” gets thrown around constantly these days. Marketers, social media influencers, and brand executives use the term because they want customers to believe their products are superior to the competition. And for good reason. Brand power can lead to outsized profit generation and huge returns for stockholders due to the ability of these […]

Free Cash Flow vs. Adjusted EBITDA

Executives of public companies like to paint their businesses in a positive light. When communicating with investors – a process known as investor relations – they will make various adjustments to their financial statements to try and convince Wall Street to buy stakes in their businesses. The most popular of these is adjusted EBITDA. You’ve […]

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