Calculating the intrinsic value of stocks is key to being a successful value investor. The Value Investing Headquarters Mobile App has added features that enable the tracking of stocks after your initial research. You can read our blog post on how to calculate the intrinsic value of a stock to learn about the discounted cash flow model we will be using. You can perform the same calculations described in that article on the mobile App by taking the following steps:
- Open the Value Investor Mobile App and click on the Intrinsic Value Calculator icon.
- On the calculator type in the ticker symbol of the stock that you want to research and tap the Search button or the Go button on the keyboard. In our example we will search for the Western Digital Corporation (WDC) stock.
- After the details of the WDC stock have been retrieved add the FCF, use the slider to select a FCF Growth Rate, and Select a level of Risk and Market Conditions. We will enter $1.7 Billion for FCF, set a 3% FCF Growth Rate, select an Average level of risk, and set the market conditions for a Bull Market. Click the Calculate button to get results.
- The results will show the last price that the stock traded at, the calculated intrinsic value, and the Margin of Safety.
In addition to that you will see Value Investing Insight providing guidance on whether it’s a good stocK pick, and all of the values that were used for the calculations. In our example, the current stock price is $80.02 and the Intrinsic Value is $98.36 with a Margin of Safety of 33.42%. The guidance provided indicates that the stock is currently trading below its intrinsic value and it may be a good pick.
In addition to calculating the Intrinsic Value of the stock, you can add WDC to a Watchlist.
The Watchlist will show you the ticker symbol, the share price that the stock was trading at, the calculated intrinsic value and a thumbs up / thumbs down icon giving you an easy way to tell if it was trading below or above its intrinsic value.
Taping on the WDC stock on the Watchlist screen will pull out the right panel displaying all of the information that was used to calculate the intrinsic value at the time you saved the stock to the Watchlist.
If the assumptions have changed and you want to make updates, you can click on the Edit button which will pre-populate the Intrinsic Value Calculator and allow you to make modifications and update the Watchlist. See the Value Investing App in action now.