2024-04-24 03:43
In this article, I will demonstrate how to use the Beneish M-Score, a mathematical model developed by Professor Messod Beneish to detect potential earnings manipulation and fraud in financia… Read More
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Fundamental Investing Articles
2024-04-11 19:43
In this article, I will show you how to identify financially strong companies using the Piotroski F-Score. This nine-point scoring system, developed by accounting professor Joseph D. Piotros… Read More
2024-03-30 00:38
In this article, I will show you how to track and evaluate insider trading purchases. Insider trading can provide valuable insights into a company's prospects, particularly during times of s… Read More
2024-03-26 19:52
In this article, I will show you how to write an investment policy statement (IPS), specifically for the average do-it-yourself (DIY) retail investor. An IPS is a formal document that outlin… Read More
2024-03-21 22:45
In this article, I will explain how to effectively rebalance your investment portfolio. Portfolio rebalancing involves realigning the proportions of various assets in your portfolio to resto… Read More
2024-03-18 05:44
In this article, I will explain the pros and cons of dividend discount models (DDMs). The DDM is a fundamental valuation method that calculates the intrinsic value of a company based on the… Read More
2024-03-17 04:52
In this article, I will explain the pros and cons of the comparable company analysis (aka comps) valuation model. The comps model is a relative valuation method that determines the value of… Read More
2024-03-16 03:59
In this article, I will explain the pros and cons of the discounted cash flow (DCF) valuation model. The DCF model is a valuation method that estimates the value of an investment based on it… Read More
2024-03-14 20:14
In this article, I will explain the difference between enterprise value and equity value. Equity value shows how much a company's shares are worth on the market. Enterprise value goes a step… Read More
2024-03-11 20:30
In this article, I will show you how to forecast free cash flow to the firm (FCFF), also known as unlevered free cash flow (UFCF). FCFF is the cash a company generates for all its capital pr… Read More
2024-03-06 04:11
In this article, I will show you how to normalize free cash flow to the firm (FCFF), also known as unlevered free cash flow (UFCF). FCFF is the cash available to all capital providers in a c… Read More
2024-03-05 07:58
In this article, I will show you how to calculate and interpret free cash flow to equity (FCFE), also known as levered free cash flow (LFCF). Understanding FCFE is essential for investors as… Read More
2024-02-28 00:42
In this article, I will show you how to calculate and interpret free cash flow to the firm (FCFF), also known as unlevered free cash flow (UFCF). Understanding FCFF is essential for investor… Read More
2024-02-21 21:48
In this article, I will show you how to perform scenario and sensitivity analyses for effective stock valuation. Scenario analysis evaluates stock valuation under different future conditions… Read More
2024-02-17 02:35
In this article, I will show you how to calculate and interpret the cost of preferred stock for a company. Preferred stock serves as a hybrid financing option for companies, combining featur… Read More
2024-02-14 22:27
In this article, I will show you how to calculate and interpret the cost of debt for a company. The cost of debt is a fundamental concept in corporate finance, affecting a company's capital… Read More
2024-02-11 00:08
In this article, I will show you how to calendarize financial data in valuation models. Calendarization directly adjusts financial data from companies with differing fiscal year ends to matc… Read More
2023-12-24 07:31
In this article, I will demonstrate how to apply mid-year convention, also known as mid-year discounting, in discounted cash flow (DCF) valuation models. Typically, DCF models assume cash fl… Read More
2023-12-24 07:31
In this article, I will demonstrate how to apply the mid-year convention, also known as mid-year discounting, in discounted cash flow (DCF) valuation models. Typically, DCF models assume cas… Read More
2023-12-11 04:13
In this article, I will demonstrate how to use the Three-Stage Dividend Discount Model (DDM) to value dividend-paying stocks. As the most advanced among the dividend discount methodologies… Read More
2023-12-04 22:43
In this article, I will demonstrate how to use the Two-Stage Dividend Discount Model (DDM) to value dividend-paying stocks. This model is a refined version of the traditional dividend discou… Read More
2023-11-29 23:24
In this article, I will show you how to apply the H-Model for dividend discount valuation. The H-Model, introduced by Fuller and Hsia in 1984 through their seminal paper "A Simplified Common… Read More
2023-11-27 21:12
In this article, I will show you how to apply the Gordon Growth Model (GGM) for dividend discount valuation. Named after American economist Myron J. Gordon, who popularized the model in the… Read More
2023-11-27 05:43
In this article, I will show you how to estimate the perpetual dividend growth rate in dividend discount models. A key and sensitive input in these models, the perpetual dividend growth rate… Read More
2023-11-19 01:15
In this article, we'll discuss the importance of the margin of safety in stock valuations. At its core, the margin of safety involves the practice of purchasing stocks at a price lower than… Read More
2023-11-17 01:26
In this article, I will show you how to calculate and interpret stock and portfolio beta. Beta, as a measure of a stock or portfolio's volatility relative to the market, offers valuable insi… Read More
2023-11-14 04:52
In this article, I will guide you through estimating your required rate of return for stock valuations. Often referred to as the "discount rate," this figure represents the minimum return th… Read More
2023-11-09 00:05
In this article, I will show you how to calculate and interpret the Arbitrage Pricing Theory (APT). Developed by economist Stephen Ross in 1976, the APT presents a multifactorial approach to… Read More
2023-11-06 06:52
In this article, I will show you how to calculate and interpret the build-up method. This method is essential for determining the discount rate (aka required rate of return or capitalization… Read More
2023-10-28 03:49
In this article, we'll discuss the 5 key downsides of investing in dividend stocks for income. While dividends play an important role in a diversified stock portfolio, there are significant… Read More
2023-10-22 23:02
In this article, I will explain why dividends are irrelevant in explaining investment returns. There's a common misconception that investing in dividend stocks guarantees higher investment r… Read More
2023-10-16 23:41
In this article, we'll discuss why Earnings Per Share (EPS) is flawed in stock analysis, particularly when representing a company's profitability, financial health, or value. While EPS is a… Read More
2023-10-04 21:51
In this article, I'll explore why most investors underperform the market, specifically the S&P 500 Index. Many investors, from novices to seasoned professionals, aspire to outpace this b… Read More
2023-09-26 22:42
In this article, I will show you how to measure your portfolio's risk-adjusted performance. While many investors often focus on calculating the total return over a period of time, inclusive… Read More
2023-04-17 06:23
In this article, I will explain the mechanics of dividend dates and ex-dividend date trading strategies. Dividend dates are important to understand, because they help investors plan their in… Read More
2022-09-12 04:49
In this article, I will show you how to create a successful investment plan in 5 steps. All serious investors should develop an investment plan to meet their long-term investing goals prior… Read More
2022-09-04 23:54
In this article, I will show you how to calculate and interpret the Single Index Model (SIM). The SIM claims that the returns on a stock are driven largely by its sensitivity and responsiven… Read More
2022-08-15 07:29
In this article, I will show you how to calculate and interpret the Fama and French and Carhart multifactor models. In specific, this refers to the Fama and French Three Factor Model (FFTFM)… Read More
2022-07-25 06:10
In this article, I will show you how to calculate and interpret the capital asset pricing model (CAPM). The CAPM is often used to calculate the cost of equity (re), which is common practice… Read More
2022-05-19 07:52
In this article, I will show you how to calculate the intrinsic value of a company like Benjamin Graham. Graham is widely known as the "father of value investing" and wrote The Intelligent I… Read More
2022-02-28 07:10
In this article, I will explain how the three financial statements are linked. This will be accomplished by providing an overview of the three financial statements and then navigating throug… Read More
2022-01-24 09:00
In this article, I will show you how to effectively hedge your stock portfolio. Put simply, hedging is the insurance of investing. Therefore, the purpose of a hedge in a portfolio is to move… Read More
2021-12-18 22:58
In this article, I will show you how to value companies using the 10 cap stock valuation method. This is a method of stock valuation that originated within real estate, and was created by Ph… Read More
2021-11-08 05:31
In this article, I will show you how to evaluate and compare exchange traded funds (ETFs). With more than 2,204 ETFs in the U.S. alone, identifying the right ETFs in every area of the market… Read More
2021-09-18 22:30
In this article, I will show you how to estimate the expected return of a stock investment. "Expected return" is an estimation of the long-term returns a stock is likely to generate if purch… Read More
2021-09-05 21:08
In this article, I will discuss the value of investing in the Volatility Index as a hedge. The Volatility Index is officially called the Chicago Board of Exchange (CBOE) Volatility Index, or… Read More
2021-07-03 19:19
In this article, I will show you how to effectively read and analyze a cash flow statement. The cash flow statement tells investors and analysts how much cash is generated and used over a ce… Read More
2021-06-26 21:56
In this article, I will show you how to effectively read and analyze a balance sheet. This sheet is a snapshot of a company's financial position, and shows investors and analysts the worth o… Read More
2021-06-13 22:09
In this article, I will show you how to effectively read and analyze an income statement. This statement summarizes all revenues and expenses over a particular period, and is presented in qu… Read More
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