Developing a new stock valuation tool

Valuation · Apr 7, 2018

I’m a long time stock picker currently working with a developer to try to make investment analysis faster and easier (for myself and for everyone).

We’ve prototyped a demo of a Discounted Cash Flow (DCF) modelling tool and I would be really interested to hear feedback from you all on it

http://34.253.103.63/companies

If you could assess any company with this tool (with accurate data):
- Would it be useful in your decision making process?
- What are the best features?
- What don't you like about the tool or was hard to use / understand?

Saltynuts · Apr 7, 2018

PV10 for the win!

Valuation · Apr 7, 2018

Would PV7 suffice? Just thinking PV10 might seem a lot to think about for some users.

If you could assess any company with this tool, would it be something you would use regularly?

Valuation · Apr 7, 2018

Note: you use the edit feature to insert your own assumptions and return your own valuation figure

newwurldmn · Apr 7, 2018

Valuation said:
Would PV7 suffice? Just thinking PV10 might seem a lot to think about for some users.

If you could assess any company with this tool, would it be something you would use regularly?

From what I can tell this is the simple part of a dcf calculation. The hard part is coming up with projected cash flows.

Personally I would find it more useful if you could tell me what the implied growth rates were based on the current stock price and I could tweak your assumptions from there. Then I could use a top down approach and see if the market is being irrational which is the precision you can get to if you don’t do a detailed Analysis.

If I have to build a bottoms up analysis to get my own growth rates then I might as well use a dcf model within that framework. that’s why so many analysts use excel. They build their own.

Valuation · Apr 7, 2018

newwurldmn said:
From what I can tell this is the simple part of a dcf calculation. The hard part is coming up with projected cash flows.

Personally I would find it more useful if you could tell me what the implied growth rates were based on the current stock price and I could tweak your assumptions from there. Then I could use a top down approach and see if the market is being irrational which is the precision you can get to if you don’t do a detailed Analysis.

If I have to build a bottoms up analysis to get my own growth rates then I might as well use a dcf model within that framework. that’s why so many analysts use excel. They build their own.

So it would be more valuable if when you arrived on each stock's DCF, you saw a reverse DCF illustrating what growth rates the company would need to achieve in order to warrant the current stock price? And then from there you would want to tweak those forward assumptions to see how that impacts the value?

If we could give you that for any stock would that be useful to your analysis?

newwurldmn · Apr 7, 2018

Valuation said:
So it would be more valuable if when you arrived on each stock's DCF, you saw a reverse DCF illustrating what growth rates the company would need to achieve in order to warrant the current stock price? And then from there you would want to tweak those forward assumptions to see how that impacts the value?

If we could give you that for any stock would that be useful to your analysis?

Yeah. The challenge is that there are many variables and only one equation.

Also I would focus on non fang stocks. Dcf is useful for stocks with cash flows and stable growth rates. For example: nwl or pfe.

Valuation · Apr 8, 2018

newwurldmn said:
Yeah. The challenge is that there are many variables and only one equation.

Also I would focus on non fang stocks. Dcf is useful for stocks with cash flows and stable growth rates. For example: nwl or pfe.

Yeah in future we would like to include all companies, so you just search the ticker symbol of the stock you want to assess and it is there.

Is there anything that would make the tool more useful? Or are there any other major problems you face when analysing stocks?

newwurldmn · Apr 8, 2018

Valuation said:
Yeah in future we would like to include all companies, so you just search the ticker symbol of the stock you want to assess and it is there.

Is there anything that would make the tool more useful? Or are there any other major problems you face when analysing stocks?

Determining what the market is implying is my biggest challenge.