Fri, Jan 30, 2015, 2:32 PM EST - U.S. Markets close in 1 hr 28 mins


% | $
Quotes you view appear here for quick access. Inc. Message Board

you are viewing a single comment's thread.

view the rest of the posts
  • jagad5 jagad5 Sep 21, 2011 12:45 PM Flag

    My analysis of ACOM

    What precisely is contrary to Graham? I rely on fundamental analysis of revenue and profits to estimate future revenues and EPS.

    My original source for Ben's formula is:

    "The Smart Crash of October 19th" by Arbel,
    Harvard Business Review, May/June 1988, Vol. 66 Issue 3, p124-136

    The authors studied the behavior of stock prices on 10/19/87 and used a formula of Ben's to estimate how much stocks were worth. That formula is
    Value = EPS * (8.5 + 2 growth rate) 4.4/Yaaa

    You can find an entire entry on this formula on Wikipedia which cites the 1962 edition of his Security Analysis.

    Assuming growth rate is 10% and Yaaa (AAA bond yields) about 3.7% (based on the median of all AAA bonds in the Yahoo search engine) implies a fair PE of 34.

    Ancestry's current price reflects a future growth rate of 7.7%. Compare this against it's historical revenue growth rate of 30% and you might understand my optimism. This 30% is the CAGR over the last 36 months, which is higher than the 24% CAGR if I extend that to 48 months. In other words, company growth appears to be accelerating. I suspect this is due to a slow down when the economy tanked, making for better comparisons from summer '08 to summer '11.



Trending Tickers

Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.