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Calculation of Market price/ EPS/Reserves/Dividant /Bonus

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Member
Registered: Aug 2013
Posts: 41
Sameer ji

please see my views on promoter share at the thread on
POINTS to PONDER: Is it necessary to differentiate Promoter Share and General Public Share in secondary Market?
« Last edit by AnYex on Sat Aug 17, 2013 11:42 pm. »
Member
Registered: Aug 2013
Posts: 840
There is no such formula driven in this whole world to generate actual market price of share.....it depends upon lot of variables and the most important is the emotional and sentimental outlook of the investor in the share market. the market is slow right now bez of the fear of the promoter share otherwise it would have reached 650 level till now and i am sure it will reach that level before dashai
Member
Registered: Aug 2013
Posts: 41
Player ji

There is no such method to calculate "Genuine Market Price" of a particular share. However there are lot of valuation convention which try to estimate the fair value of an stock. However some these convention also
needs historical data and growth prediction based on various market information.

Different investors use different convention and come up with different estimates. Some investors just follow market speculation speculated by experts, successful investors, and other participants met in forums such like this and investors clubs where the interact with other like minded members.

But at the end the investor come up with some value or projected value for future. and compare that with current market price. Those who thinks current market price is undervalued compared to his/her prediction wants to buy the share and those who thinks current market price is overvalued compared to his/her prediction wants to sell the share.

However the return he estimates be normally higher than what it might yield from investing on other lower risked sectors such as Bank deposits.

However there are some simpler tools such as Earning per Share(EPS), Price Earning(PE) Ratio,Net worth per Share(NPS) , Growth Rate, Price Earning to Growth(PEG) ratio, Return on Invested Capital (ROIC) etc to assist predicting future yield. There are lot more other tools which are more sophisticated.

Lot of people calculate EPS simply by "Net Income divided by number of shares" but overlooks the volatility.
People investing for more than a quarter(3 months) must not overlook the volatility of EPS. Further EPS must be watched for its consistency over the period of (say 2,3 years for each quarter) for positive growths.

Most analyst use adjusted EPS by removing effect of non regular income and expenses of the company, to predict the future price.

Most long term investors not only focuses on EPS, PE Ratio but also in growth rate and dividend payout history of the company

Growth rate can be estimated from their financial reports of several period. Here you have to watch for increase in their business volume and incomes and favorable conditions for their business growth. With these data you can predict an estimated growth rate.

Now you can use PEG ratio to compare the stock of different companies you want to invest on. The thumbs rule is that stock having value under 100% of PEG ratio is undervalued stocks and those over 100% are over valued stocks


Say Stocks A is Trading at PE of 18 with expected growth of 20%
and Stock B is trading at PE of 25 with expected growth of 30%

the PEG ratio for stock A is 18/20 or 90% and that of Stock B is 25/30 or 83%
Here Stock B is better purchase than stock A as it has lower PEG ratio
Member
Registered: Jun 2013
Posts: 46
Aba eps 2.5 chha vane commerz le tesko certain part retained earning ma saarnu par6 ta baaki part chai dividend baadh6.
Member
Registered: Jun 2013
Posts: 46
EPS calculation garne tarika chai yesto ho...

EPS=Net income after tax(NIAT)/No. of shares

For eg.
CTBNL ko NIAT = 5 crores
No. of shares = 2 crores [2 arba common equity divided by 100 (per share value) i.e. 2arba/100=2crores]
Then,
EPS of CTBNL = 5 crores/2 crores = Rs. 2.5 per share
Member
Registered: Aug 2013
Posts: 31
I feel most of this forum users are doing trading in share market based on
market rumers which are spread by big players and they flow according to the market tide only and ulitemcasino.atley it is their luck which gives them profit or loss ... and we still lame baburamji when he says share market as

I feel worldwide share market is based on fundamentals of the companies and market news / insider news/ rumers
influence the particuler script to some extant, but in nepal, it seems different ...... as no reply to this serious question indicates that may be most of our friends dont know the relations and maths between financial indicaters.

according to them EPS is the final indicator and eps alone decides the tentative bonus/ divident........
if this is true then how come most of companies net yield (EPS/market price of share )is less then the
bank intrest on invested amount and we people are still investing in share market.

Share market experts ..... experienced players..... please please answer my quarry. :P :P
Member
Registered: Aug 2013
Posts: 6
khoei ta expert kata haraye? moderator le dina mil6ki jankari! we'r waiting curisously.
Member
Registered: Jul 2013
Posts: 287
I am also waiting for the answers from expert :)
Member
Registered: Aug 2013
Posts: 31
Nobody to share the basics of share market????
Member
Registered: Aug 2013
Posts: 31
Hai friends
1. Please share your views for calculation of genuine market price of any particular share in relation with
its reserves, its earning per share, its provision of Bad debts ( No provisions for rumers)

2. Calculation of estimated returns ( Bonus /Dividents) in relation to EPS/Reserves /NRB Provisions

Hope this topic and answers will be mind storming for the forum readers

( Please dont share unjustified answers)

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