As a follow-up to the post a few weeks ago about industry primers, I figured it might be good to compile a list of relevant valuation metrics by industry.
the problem is a lot of people will come up with their own metrics, multiples,measurements, etc.
The most important thing is that wtv metric you use, it cant be too volatile, and it must drive value.
YOo could say the metric needs to be comparable amongst companies, but in reality that is just saying the metric isn't volatile when you look at different companies.
couchythe problem is a lot of people will come up with their own metrics, multiples,measurements, etc.
Isn't that the whole point though? Coming up with 'creative' metrics that other analysts aren't looking at could give you insight into a company's fundamentals that others may have missed.
couchyThe most important thing is that wtv metric you use, it cant be too volatile, and it must drive value.
Agree, if the metric you're looking at is too volatile, it's likely not telling you anything too useful, because a company's fundamentals aren't likely to wildly fluctuate YoY, but they are likely to trend in a certain direction over time.
the problem is a lot of people will come up with their own metrics, multiples,measurements, etc.
The most important thing is that wtv metric you use, it cant be too volatile, and it must drive value.
YOo could say the metric needs to be comparable amongst companies, but in reality that is just saying the metric isn't volatile when you look at different companies.
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Sales/square feet = retail metric, obviously.
Same store sales - retail
Price/Book Value - Banks
EV/EBITDAX (O&G/Mining)
the problem is a lot of people will come up with their own metrics, multiples,measurements, etc.
The most important thing is that wtv metric you use, it cant be too volatile, and it must drive value.
YOo could say the metric needs to be comparable amongst companies, but in reality that is just saying the metric isn't volatile when you look at different companies.
Isn't that the whole point though? Coming up with 'creative' metrics that other analysts aren't looking at could give you insight into a company's fundamentals that others may have missed.
Agree, if the metric you're looking at is too volatile, it's likely not telling you anything too useful, because a company's fundamentals aren't likely to wildly fluctuate YoY, but they are likely to trend in a certain direction over time.
the problem is a lot of people will come up with their own metrics, multiples,measurements, etc.
The most important thing is that wtv metric you use, it cant be too volatile, and it must drive value.
YOo could say the metric needs to be comparable amongst companies, but in reality that is just saying the metric isn't volatile when you look at different companies.
Remind me one more time what the problem is, couchy?
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