You can use all the above 3 methods, being very much aware that what you are actually doing can be very much wrong. .Sometimes it may give near approx or rough idea…but nothing above that…Also by spending more time in market and following that company for long time, during both bull as well as bear market, you may start getting a gut feeling when its over-valued or under-valued…but this is again subjective and only depends on how “sensitive” you become wit respect to that particular company in terms of its business and its all financials.

Thanks for the reply. Then How should one analyze price of a stock whether certain stock is relatively cheap or overvalued?

calculating Intrinsic value or using DCF value is not helpful. Most of these calculations consider so many assumptions that two people with different assumption values can reach to exactly opposite conclusions.
Even comparing past average PE is not helpful as there might be drastic change in the business model as well as product portfolio of the company and hence current PE can be very different, and rightly so , compared to PE 5 years ago.
Even in case of Peers , its very challenging to compare. No two companies are same. Their moats can be very different. Their managment style can be very different and their geographical market can be very different. For example, in Paints industry, Asian Paints can be valued differently than Nerolac etc.

Some additional feedback – for less specific questions, I think more work needs to be done. For instance, when I asked the following How have exports grown for “Aarti Industries” for the last 3 years?, the results were quite poor. Seems to be picking up answers/insights from transcripts of other irrelevant companies.

Also, it’s not clear how many quarters of earnings call transcripts are being reviewed to generate the insights and answers. Would be good to get a sense of how the answers/insights may have changed through the quarters.

PPFAS mutual fund runs a discussion group called the PPFAS Financial Opportunities Forum – FOF.

At this monthly event, fund managers and analysts from the mutual fund make presentations.

In the most recent event (September 2023), they made a extremely insightful presentation on smallcaps.

I recommend you all watch it…and share your key takeaways.

My key takeaway was that the number of stocks on average in a smallcap mutual fund has increased implying that to deploy the flood of money coming into smallcap funds, the fund managers maybe going down the quality curve. This is scary since low quality mutual funds are the easiest way to destroy wealth.

The other ofcourse was that since smallcap funds are unlikely to return money, investors need to ensure their smallcap allocations are in line with their planned asset allocation.

Happy watching. Here’s the link –

Navigating the Smallcap Landscape: Opportunity and Challenges

Do share your takeaways!