• Moritz

Stock Analysis and Valuation

Hello and welcome to Stockreview.org

Within the last decade (after the Lehman shock and before the Coronavirus), global stock markets have seen one of their biggest bull-market rallies ever, reaching new highs year after year.

S&P500, Nasdaq, DJI and other main global stock indices development after the Lehman shock in 2008 & 2009
Global Stock Markets developmen since 2009

Fueled by low interest rates, governments, companies, but also individuals have been on an

investment spree in order to enable further growth, increase their returns or accumulate wealth. Further stimulated by the rise of trading apps on your smartphone and ever decreasing transaction fees, investing in the stock market is now easier and more accessible than ever before.

A person looking at a stock trading app on their Smartphone
Trading apps

Despite the obvious risk of decreasing market valuations during economic downturns (or fallouts like at the moment) another downside is that market participants come into the investment world utterly unprepared. Basing their buys on tweets or hints from online “experts” in hope of unrealistic gains or catching the next unicorn new investors increase their own risk by not doing at least some basic research.

Having some experience in the investment world (making the same mistake I highlighted above, among others..), a little bit of free time on the weekend and remembering some basic tools of stock analysis and valuation from my time at the university, I want to share my knowledge here on this blog.

As spotty as it may be in some places, my hope is that it helps at least one or the other person to make better investment decisions in today’s stock market.

My plan is to regularly post about valuation principles, explaining old and new methods of stock analysis with their pros and cons as well as putting out my own stock anlysis / valuations of specific stocks from time to time.

Starting with some of the main tools of fundamental analysis, I will go into (a little) depth on the basic principles that are commonly used. This also includes simple methods of valuation via multiples etc.. Following would be other models like SWOT, PEST, DCF valuation and such that require additional research in order for them to be effective.

To show the practical applicability of some of the methods, I have combined several indicators, a well-known fundamental analysis method and some additional factors into a scoring method. It evaluates a companies financial strength, industry-environment and several other factors, in order to provide an overall score which can give a guidance on a companies chances to succeed in the future.

I will conclude each review with my own company valuation, indicating what might be a fair value for the stock in question.

You are of course welcome to comment, complain or share my ideas as we go along.

Also, I am always open to ideas from the community as to what stock could be analyzed next and what could be done to further optimize the analysis itself!

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