What is Roger Montgomery’s Value.able intrinsic valuation formula?
You’ve read Value.able, Roger Montgomery’s step-by-step guide to valuing the best stocks and buying them for less than they’re worth, now watch Roger Montgomery value a business live! Using an extraordinary business, Woolworths, Roger Montgomery reveals, step-by-step, how he values listed businesses and invests in the Australian stock market. Following Roger’s simple steps doesn’t require a great deal of maths, just a little arithmetic and some thinking about what an extraordinary business is. Follow Roger’s Value.able method of valuing businesses and soon you too will be valuing the best stocks and buying them for less than they’re worth. Watch the interview.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Lydia Szymanski
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Hi there Roger,
I have recently read your book twice. I understand that my valuations will be different to yours for a number of reasons, so am less concerned about getting them to match, but do become concerned when they are markedly different.
To check my workings I’ve gone back to previous articles of yours. Adam mentioned that you did not end up posting an exercise directing readers to extract the numbers from the annual reports after the Easter holiday exercise.
I therefore tried going to the 2009 Woolworths annual report to work alongside your 2009 valuation. However, I did not even get your equity per share figure of $5.98 (I would usually take total equity / weighted ave # of shares used to calculate diluted EPS), nor your ROE figure of 27.5%.
Are your workings included in your 2009 presentation notes? If so, would you be happy to send that on?
How you explain the IV calc in your book makes perfect sense, but it’s when going into the annual reports that I find it gets more confusing e.g. in Woolworths where they have shareholders equity vs. total equity (incl minority).
Thanks in advance
Lydia