I am usually lazy and will check Morningstar to get their estimate of fair value but since I am stuck at home I decided to build a simple spreadsheet to calculate it on a stock. Of course it is only as reliable as the information I enter and right now projected growth rates, rates of return and guessing the multiple 10 years out is pure guesswork. But it is sort of interesting too see what a price of a stock could be at a growth rate and multiple if it holds up. Did one for Apple based on a growth rate at 10.5% and a PE of 20 and a minimum rate of return at 10% based on this if I bought the stock at $262.50 and the earnings growth continued for 10 years at 10.5% and it traded at a multiple of 20 in that tenth year, the stock price would be 618.96 and I would have a rate of return of 10%. I built in a dividend growth part into the spreadsheet also so based on their current dividend, if they grew it 10% every year then I would have a yield to cost of 5%. Now this is all speculation and subject to sever guesswork at this time but it’s pretty fun to adjust the numbers and see the different outcomes. Anyone build any spreadsheets they use to analyze a stock?
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Originally Posted by Bassmaster96
