at what price do you buy in?, page-188

Given the speed at which algos work I said to my self i need to have a method to quickly estimate a stocks worth to determine if i want to jump on the bandwagon of a shooting star stock.  (Which usually lasts for 1 or 2 days)

I use a short cut discounted cash flow type method.

I know ALL EPS for 2018 was .99 cents, this was reported.  Goldman Sachs have estimated EPS for 2019 at 1.43 and EPS for 2020 at 1.65.

Thus I can see growth to 2020 averaging say 30%, but its a risk business so i would apply a conservative multiplier of 20. ( which gives a 5% return.)

Thus I simply multiply 1.43 x  20 = 28.60.   ( 1.43 / 28,60 = 5% return)

So i think at 30/9/2019 ALL is worth 28.60.  Its trading at 24.74 so there is good upside.

Goldman Sach has a price target of 33.00.  this suggests even bigger upside.

They could be using a multiplier of 23 which infers a return of 4% (1 divided by 23) 

If you dont want to do this calculation you could join FN Arena and they report a panel of broker estimates for each stock + commentary.  Its very good.

FN Arena give 1 month free trial. 

I used to work for an EPCM company and have good memories of engineers raiding our (accountants) parties and drinking our beer.  Then heading off to the next project.  They had a great life.

 Good hunting.