Valuing a company by the estimates discounted sum of its future cashflows may make sense if you're going to acquire the whole company.
But if you're just a shareholder, owning a small amount of the business, why on earth would you pay anywhere near thefair value? The only return you'll get (on top of share price gains/losses obviously) is the dividend payout, which is usually a small-ish proportion of the cashflow.
The only case in which you're likely to make a return greater than the DCF-derived fair value is if/when the company gets bid for at a juicy premium.
But if there's next to no likelihood of M&A activity happening with the company, all you'll get is the future dividends, which means the company should trade perhaps at a 40-50% discount to the DCF-derived fair val?
What alternatives to DCF do you think are more sensible measures of valuing a company? Bear in mind I'm talking for a shareholder who just has like 5% of the company along with if the whole thing were to get bought out.