Introduction to Equity ValuationLocked: included in All Access

Price versus value: intrinsic value and mispricing, book value, market capitalisation and enterprise value as indicators of value, and the main families of valuation models with their strengths and weaknesses.

1. 1. Intrinsic value, mispricing and the three model familiesValuation means estimating what a share is worth from its fundamentals and comparing that estimate with the market price, using one or more of three model families.Video · 6 minLocked: included in All Access11 min
2. 2. Perceived value, investor and issuer actions, and value rangesEvery investor holds a different perceived value for the same share; when perceived value and price diverge, investors trade and issuers repurchase or issue shares, and analysts express value as ranges and scenarios rather than one number.Locked: included in All Access13 min
3. 3. Book value, market value, ROE and the cost of equityBook value records what management has built; market value prices what investors expect it to build. ROE judges how well book equity is used, and the cost of equity is the return investors demand for supplying it.Video · 5 minLocked: included in All Access15 min
4. 4. Book value of equity: what it measures and how it misleadsBook value of equity records net assets at accounting values, so analysts adjust it, especially by removing intangibles such as goodwill, and read it with care when it has been hit by write-downs or turned negative by payouts.Locked: included in All Access12 min
5. 5. Market capitalisation, price-to-book and enterprise valueMarket capitalisation prices shareholders' claim on future cash flows and changes daily; comparing it with book value shows excess value or a shortfall, while enterprise value prices the whole firm net of cash and so compares companies with different leverage.Locked: included in All Access14 min
6. 6. Absolute valuation: present value and asset-based modelsAbsolute models estimate intrinsic value directly, either by discounting a chosen cash flow measure (dividends, FCFE, FCFF or residual income) at a matching rate, or by valuing what the firm owns minus what it owes.Locked: included in All Access15 min
7. 7. Relative valuation and reconciling several modelsRelative valuation compares price or EV multiples with comparable companies, simply but at the mercy of the peer group; analysts then combine several models' value ranges, weighting them by confidence and digging deeper when they disagree.Locked: included in All Access13 min