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Intrinsic value

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Enough hype: What's Facebook's intrinsic value?
The Globe and Mail  May 25  Comment 
‘Intrinsic value’ - what the business is worth based on reasonable long-term growth projections - pegs it at less than $10
Fair Value and Intrinsic Value
MaxKapital  May 18  Comment 
I did a post on fair value during April and have received much email traffic expressing confusion between intrinsic and fair value. This post seeks to clarify the difference.  What is intrinsic value?  Intrinsic value is the value of a...
Gold Has No Intrinsic Value and Not a Store of Value
Gold Stocks Today  Mar 4  Comment 
Gold is a valuable thing to store. However, it is not a store of value. Gold has intrinsic properties that make it valuable. However, it does not have intrinsic value. I mention this, because, at some point, you will read about gold as a store of...
Offer price lower than intrinsic value
Business Standard  Oct 12  Comment 
Fuelled by its delisting plans, Nirma s stock touched a 52-week high of Rs 264.85 on Monday before ending the day with a net gain of 7.2 per cent at Rs 240.50. However, it shed some of these gains on Tuesday, closing 2.6 per cent lower at Rs...
1.6- Option Prices (Premium)
  Apr 26  Comment 
The price of an option, also known as the premium, is made up of two factors: Intrinsic Value (moneyness) The intrinsic value of an option contract is the part of the option price that is In-the-Money (ITM). Extrinsic Value...
Gold s intrinsic value outshines the dollar
Commodity Online  Dec 22  Comment 
Gold in the long term looks to touch $2000 with rising concerns over dollar dominance in the World trade. But that would take a long time to happen. Correction in gold prices can happen in the short run with the contraction of money supply.
Why gold and silver have intrinsic value?
Commodity Online  Dec 10  Comment 
Intrinsic value does not mean that the product may have value for some time or even for a long time. Instead intrinsic value denotes value forever and that value remains relatively unchanged and equal to the same amount today as it was thousands...
Intrinsic Value
Jonathan Goldberg on Value Investing  Jul 30  Comment 
The intrinsic value (IV) of a potential investment is arrived at by comparing the results of the Net Asset Value (NAV) and Earnings Power Value (EPV) analyses. If EPV is less than NAV then the intrinsic value for the company is derived from...
Running The Numbers - Comcast ($CMCSA) well below our intrinsic value estimate
Valuecruncher  Nov 3  Comment 
Comcast Corporation ($CMCSA) is a US cable company. At 31 December 2007 the company had approximately 24.1 million video subscribers, 13.2 million Internet subscribers and 4.6 million phone subscribers. The stock has dropped nearly 30% this...
Running The Numbers - Intrinsic Value Of Verizon ($VZ)
Valuecruncher  Oct 30  Comment 
Verizon ($VZ) announced positive third-quarter results this week.  Analysts have been generally impressed.  How does the current share price look from an intrinsic value perspective? Valuecruncher valuation model of $VZ with interactive...




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Jonathan Goldberg

Intrinsic Value (also known as fundamental value) refers to the actual value of a security based on an underlying perception of its true value due to both tangible and intangible factors. The value may defer from the current market value. As a result, value investors use an array of analytical techniques to estimate the value of the security in the hope finding investments where the true value of the investment exceeds its current market value. It can be calculated by summing the future income generated by the assets, and discounting it to the present value.

How do we use it

The intrinsic value of a potential investment is arrived at by comparing the results of the Net Asset Value and Earnings Power Value.

If Earnings Power Value is less than Net Asset Value then the intrinsic value for the company is derived from Earnings Power Value and adds value for the probability of a catalyst taking place within the company that would bring the value of the company to its competitive state ([Net Asset Value).

If Earnings Power Value is equal to Net Asset Value then it would seem that the company being studied has no competitive advantage. Therefore, Earnings Power Value and Net Asset Value would define the intrinsic value.

If Earnings Power Value is greater than Net Asset Value then the company has what is referred to as a "franchise value". To be willing to pay for this franchise value, the investor must deem it to be sustainable. In this case the intrinsic value is derived from Net Asset Value plus added value for the probability of the company maintaining its franchise.

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