My opinion, absolute PE method is even harder to use compare to DCF method. First of all, there are no accurate way of computing the financial risk as well as the business risk of a company. Two of these variables are somewhat intuitive input. Second of all, this is a good forward looking valuation tools however it doesn't really reflect the company true cash flow even though it has taken into account of dividend payout. Thirdly, the creator of this method actually prefer DCF method.
I used this to compute Huayang's fair value and got 4.62, dun know whether i m correct or not, anyway find this method quite useful and actually we can use all the method to give us a guide. Thanks Kcchongnz
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
wayneteo
34 posts
Posted by wayneteo > 2014-02-16 00:45 | Report Abuse
Very detail analysis, thank you so much for sharing with us so that I can learn from the way you analyze a company ..