Building a DCF Using the Unlevered Free Cash Flow Formula (FCFF)
Updated 12/12/2023 “Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life.” –Warren Buffett Cash is the lifeblood of all companies, and determining the fair value or intrinsic value is a matter of calculating what the future cash flow […]
Why Do Companies Repurchase Shares? To Create Value.
Some of the greatest CEOs of all-time used lots of share buybacks to create outstanding returns. In many cases, these share repurchases can be fantastic for investors. They work as a savings vehicle, and they spurn growth in share value. But they don’t come without their risks. In this post, we will discuss the pros […]
What Buybacks King, Henry Singleton, Can Teach Us About Capital Allocation
Before Warren Buffett and his special conglomerate, the compounding machine Berkshire Hathaway, there was a CEO of Teledyne called Henry Singleton—who pioneered prudent capital allocation inside of a conglomerate with stock buybacks and issuance. Henry Singleton was profiled in the excellent book, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success. In […]
How an ROIC Tree Shows a Company’s Growth Drivers and Capital Efficiency
Corporate officers are in the business of allocating capital. The goal for each CEO is to return an attractive return on its capital. All companies create value for their company and shareholders when they earn a return above the opportunity for other capital allocations. One way to measure those returns is the metric, ROIC, and […]
How Do You Know When To Sell a Stock?
Updated: 6/16/2023 A question as old as time in the stock market. How do you know when to sell a stock? If you ask an investing great, they will likely say something to the effect of: “the best time to sell a stock is never.” In fact, I think Warren Buffett said that one already. […]
IFB194: Thoughts on Heavy Portfolio Concentration
Welcome to the Investing for Beginners podcast. In today’s show we discuss: Thoughts on Palantir and heavy portfolio concentrations How dollar-cost averaging can help you when prices rise What to do as you approach the 15 to 20 stocks in your portfolio, where to look for other ideas, or reinvesting in your portfolio. For more […]
Investor’s Guide to Incremental Invested Capital (ROIIC)
Updated 5/29/2023 Focusing on the returns on invested capital a company produces helps us better understand how well it sets itself up to grow. A company with strong returns on invested capital is the unicorn we all look for, especially when they efficiently use the capital to grow over time. A great way to measure […]
Business Breakdown: An In-Depth Netflix Stock Valuation
The Netflix product is easy to understand for most investors. Doing an in-depth stock valuation can be much harder. In this post, I will show an example of how to value Netflix so investors can do this now and in the future. Netflix has a unique business model. It absolutely disrupted the media industry and […]
IFB193: Consistent Investing, ESG, and ETFs
Welcome to the Investing for Beginners podcast. In today’s show we discuss: The advantages of investing consistently and using dollar-cost averaging to your benefit The pluses and minuses of ESG investing and the ESG score ETF investing, pluses and minuses For more insight like this into investing and stock selection for beginners, visit stockmarketpdf.com SUBSCRIBE TO […]
ROIC Analysis: Value Destruction From Growth and Other Pitfalls
Something that might shock the average investor is that growth can actually lead to value destruction for a company, depending on how a company is achieving that growth. Using ROIC analysis and comparing it to a company’s cost of capital, we can quickly determine when that is happening and steer clear from these types of […]
