21 Comments
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Making Numbers Matter's avatar

Thanks for sharing this. Interesting read!

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The Steady Investing's avatar

Thanks, appreciate it! I expanded each of the steps in detail, which I hope you enjoy as well. link below. Following a standardized process helped me to stay on track with what's important while analyzing a company.

https://thesteadyinvesting.substack.com/t/valuation

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ValueGwr's avatar

“I will go over in detail in a different post to explain Reverse DCF analysis"

--

Has the work finished?

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The Steady Investing's avatar

I am posting an article tomorrow, which goes over valuation in detail. hope you'll enjoy it

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ValueGwr's avatar

The Series is greak work, I enjoy it very much ,thanks!

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The Steady Investing's avatar

Thank you so much. Appreciate the kind words. I am glad you enjoyed it. Creating a structured process in analyzing a company has really helped me organize my thoughts.

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The Steady Investing's avatar

Not sure you saw my post but here is the Reverse DCF: https://thesteadyinvesting.substack.com/p/reverse-dcf-model-valuing-a-company

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Jhajj Gurbag Singh's avatar

Wonderfully designed and explained article. Thanks for sharing~~

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The Steady Investing's avatar

Thanks, Jhajj! Appreciate it!

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RHANDI's avatar

Great job here. I think I'll be using this to look at companies going forward. Thanks for the write-up.

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The Steady Investing's avatar

Thank you! I really appreciate it, I'm glad you enjoyed the post.

This framework helps me stay disciplined and follow a structured process, ensuring I’ve checked all the right boxes before hitting the "Buy" button. I've been tracking my portfolio for the past three years and have been fortunate to outperform the market, compounding at a 25% CAGR (32% vs. 7% for the S&P 500).

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RHANDI's avatar

I'm looking for the exactly this. Something that I can use repeatedly every time to check the Quality and then the valuation of the companies that I am looking at. This seems like that something I was looking for. Keep up the good work here.

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The Steady Investing's avatar

Thanks, Rhandi.

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DIY Investor's avatar

Sound process. Thanks!

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The Steady Investing's avatar

Thanks, mate. Appreciate it!

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Cody's avatar

This is a really solid take on this, thank for the contribution!

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The Steady Investing's avatar

Thank you!

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ATC (Absolute Total Compound)'s avatar

Expected return = Earnings growth + Shareholder Yield +/- PE Expansion

****

Revised:

Expected Compound CAGR

= (1 + Earnings CAGR Ratio) × (1 + Dividend Yield Ratio) × (Pexit÷Eexit)/(Pentry÷Eentry)

If all dividends are revinvested back to the stock by investors, and the dividend cagr equals earning cagr.

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Moat Mind's avatar

Checking compensation planning under "Schedule 14A" is a great tip.

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Mar 2
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The Steady Investing's avatar

I agree. That’s why evaluating a management team's historical performance is crucial. Have they consistently delivered on their promises? Do their future plans align with the company’s long-term goals, presenting a clear and coherent strategy rather than a scattered vision? Additionally, management commentary during quarterly results provides valuable insight into whether they are executing their plans effectively and achieving the results they set out to deliver.

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Mar 2
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The Steady Investing's avatar

Is GPA - Growth Profit from Assets? what formula is it:

(Profit from growth initiatives)/(total assets) ? If yes, where do you get the profit from growth initiatives?

Also, what is ROIIC?

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