I’m new-ish to investing and I’m building a dividend-growth portfolio which has a few tech companies (for more growth) in there as well, and I want to buy more of the same stocks I already own that are below or close to “fair value”. The most common analysis I came across to find a stock’s intrinsic value is either through Financial Metrics (such as the PE Ratio), or Discounted Cash Flow analysis.
After running my companies through these tests using a spreadsheet I created which compares my results to the current price, I see vastly different results than I expected, and they seem to suggest that there is TONS more downside pressure coming, if my results are accurate:
For example, I’m getting $68-171 fair value for MSFT when the current price is $241. Oreven $120-305 for COST. There’s no way that’s possible!
So, am I doing something wrong? Am I not understanding how to use these metrics because from what I can see, only SalesForce (CRM) looks like clean buy right now, which is going against every macro-economic bone in my body.
What is going on here? Any help is appreciated!
