Answer for Company worth or Price Undervalued and Overvalued

Hi Kellie,
(a) How to measure/calculate  a company worth undervalue or undervalue?
If the Market Value is selling above the company’s Intrinsic Value, then it’s overvalued. 
If the Intrinsic Value is higher than Market Value, then it’s undervalued.

(b) How to measure/calculate a current price ;per share is undervalue or overvalue ? 
As above, but change Market Value to Stock Price, and Intrinsic Value of the company with Intrinsic Value per share by dividing by number of shares outstanding of the company.

(c) How to measure/calculate Price per share from financial report?
Price per share is the Share price. It’s not calculated. Its what the buyer / seller wants to buy or sell.

(d) One of the buy factor is company worth undervalue and current price is undervalue?
I cannot think of why anyone would want to buy a dollar item for 2 dollars. The only factor i would buy is when the company is undervalued.

(e) How to calculate  the margin of safety and intrinic value link to company worth and current price? 
Margin of Safety = How much lower is Market Price compared to the company’s Intrinsic Value per share, expressed in percentage.
Intrinsic Value = What the company is worth.
Current Price = Share price.

(f) Is it current price and company worth undervalue, mean it is a good buy?
A good buy is when you’ve found a good company (consistently high ROE with low debt, high growth rate if possible), run by management who acts in the interest of its shareholder (low director’s fees, high ownership from directors) at a price below the company’s intrinsic value.

About The Author

Peter Lim

Investor (Not Speculator).