2006-07-17 04:04:30 · 4 answers · asked by Anonymous in Business & Finance ➔ Investing
By understanding valuation of a stock. The most theoretically sound stock valuation method is called income valuation or the discounted cash flow (DCF) method, involves discounting the profits (dividends, earnings, or cash flows) the stock will bring to the stockholder in the foreseeable future, and a final value on disposition. The discount rate normally has to include a risk premium which is commonly based on the capital asset pricing model.
2006-07-17 04:11:14 · answer #1 · answered by StraightDrive 6 · 0⤊ 1⤋
You have to know the total amount of shares for sale, the more shares there are the slower the price will go up, and the quicker the price will come down. Basically buy cheaper shares below $1.00
2006-07-17 11:30:38 · answer #2 · answered by chp 2 · 0⤊ 0⤋
Undervalued relative to what?
2006-07-17 11:28:44 · answer #3 · answered by NC 7 · 0⤊ 0⤋
Pick up a copy of Benjamin Graham's classic book "The Intelligent Investor", and study.
2006-07-17 11:17:08 · answer #4 · answered by Anonymous · 0⤊ 0⤋