What is a valuation, especially valuation for a listed company? Google definition for valuation is “an estimation of the worth of something, especially one carried out by a professional valuer”. Can the valuation be done by a commoner like anyone on the street? The answer is YES.
“The price is on increasing trend, should I buy now?”
Why is it dropping so much all of a sudden?”
The above are few of the common questions asked by investors. They can be answered, if the investors know the worth of the company. Thanks to Benjamin Graham, the Father of Value Investing, now we can acquire this knowledge from his bible, Security Analysis.
Valuation of a listed company takes into consideration of the industry condition, business model and management team. And good news is these factors can be observed and analysed by commoners, so long as you have the discipline to do so. For example, Padini. Padini runs clothing retail business. Any consumer who buys from Padini has the opportunity to check on their business performance, customer flow, quality of products, and even compare with their industry peers.
Therefore, next time, whenever you head for shopping, do pay extra attention to the products displayed, to their branding power and demand. You may spot potential companies just by that!!!
Come back to check for more updates! Have fun!