Buying Stock???

Question

1) How do you calculate wether a stock is undervalued ?What are the factors ?

2) If a stock costs $10 and there is 100 shares does that mean the company is worth $1000? ( not taking into acount supply and demand affecting stock price )

3) If the companies "worth" is $1000 what exactly is that? assets, market control, revenue etc...?

4) Can you simplifly a breakdown of how you determine a business' "worth"... -"that bussines is worth a million dollar"

I know this is a long question, If you answer only one of the questions I would still greatly appreciat it.

Answer 1

1. The actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value. Value investors use a variety of analytical techniques in order to estimate the intrinsic value of securities in hopes of finding investments where the true value of the investment exceeds its current market value.

2. This would be its market value

3 and 4. The amount by which assets exceed liabilities. This is known as shareholders' (or owners') equity and is determined by subtracting liabilities on the balance sheet from assets. For example, if a company has $45 million worth of liabilities and $65 million in assets, the company's net worth (shareholders' equity) is $20 million ($65 million - $45 million).

People spend their entire careers trying to answer such questions. Try Investopedia for a great resource. This is just one source of literally thousands of sites that discuss the ins and outs of stock investing.

Answer 2

http://www.investopedia.com/articles/bas...

hope it's useful....