Houston, TX (PRWEB) June 23, 2011
The Arbor Asset Allocation Model Portfolio (AAAMP) Blog, a value investing blog for self-directed investing, released a series of articles on stock valuation and how to value company shares. The Arbor Investment Planner and the AAAMP Blog provides asset allocation and investment management strategies for investors who choose self-directed investing.
The series of articles walks the investors through a logical process of understanding the simple calculations, why each statistic or ratio is important, and how they come together to be a valuable tool for the investor. The last article provides an example comparing Apple (AAPL) and Cisco Systems (CSCO).
Market Capitalization Calculation Stock Valuation Formula– Explains how purchasing a stock is actually buying a fractional share of the whole company. Market Capitalization is the valuation the market is giving the equity of the whole company.
Calculating Enterprise Value - Total Value of a Company– This article demonstrates how Enterprise Value represents the total value of the whole company because it factors in the company’s liabilities and cash along with market capitalization. It also explains why this valuation method is important, how to calculate enterprise value, why this valuation method is important, and provides an example for illustration.
What is Net Cash Flow? Sometimes referred to as simply cash flow, this post tells the reader why cash flow is one of the most important investment metrics. Net cash flow tells an investor how much cash a company is generating for future growth (inventory, equipment, buildings, etc.), to pay off debt, or return to shareholders.
Best Stock Valuation Calculation to Value Company Shares– pulls the previous information together to give the self-directed investor a valuable tool to compare company valuations. The Return on Enterprise Value (ROEV), expressed as a percentage, gives the analyst the rate of return on the market value of the business (EV). In other words it measures, as a percentage, the real amount of money being produced today (not accounting profits) based on what the business is valued at today (not book value).
Stock Valuation Method Compares Apple (AAPL) to Cisco Systems (CSCO) In the AAAMP Blogs’ last article of this series, the Return on Enterprise Value (ROEV) ratio is used in an example comparing Apple (AAPL) and Cisco Systems (CSCO). The value of this ratio is that it makes comparisons at market value, (the price an investor theoretically can buy and sell at today).
The AAAMP Blog is part of ArborInvestmentPlanner.com. The company provides free services including its’ blog to help investors who choose self-directed investing with asset allocation and investment management strategies.
The Arbor Investment Planner also provides a Premium Service which includes the Arbor Asset Allocation Model Portfolio (AAAMP), specific trade alerts, and concise market updates e-mailed to subscribers on an as needed basis. The AAAMP uses a risk adverse strategy that has greatly outperformed the S&P 500 with considerably less volatility (risk) than the index.