Fair Value of the Dow 30 Stocks - Where is Value Hiding Today | Summary and Q&A

TL;DR

This video analyzes all 30 stocks in the Dow Jones Industrial Average to determine potential overvalued and undervalued companies for long-term investment opportunities.

Key Insights

• 🥶 Financial companies were excluded from the analysis due to the limitations of discounted free cash flow for this sector.
• 💐 Some companies, like Intel and IBM, appear undervalued based on the analysis, while others like Boeing may be overvalued due to lower free cash flow.
• 🧚 Microsoft, for example, has a fair value of $180 per share, assuming the projections are correct, and a margin of safety should be applied.

Transcript

hi i'm jimmy in this video we're going to look quickly at all of the stocks in the dow jones industrial average our goal with this video is to try to see if we can look at which companies could be overvalued right now and which ones could be undervalued as many of you may know i've been looking for another stock to add to my personal investment por... Read More

Questions & Answers

Q: What is the purpose of the analysis in this video?

The purpose is to find companies in the Dow Jones Industrial Average that may be overvalued or undervalued for potential long-term investment opportunities.

Q: Why were financial companies excluded from the analysis?

Discounted free cash flow calculations tend to be less accurate for financial companies, so they were omitted from the analysis.

Q: How are the companies evaluated in the analysis?

The analysis uses analyst estimates for free cash flow and discounted cash flow calculations to determine the potential fair value of each company. The current stock prices are then compared to this fair value.

Q: What is the significance of the net debt adjustment in the valuation?

The net debt adjustment takes into account the total debt and cash or cash equivalents of each company to determine the final fair value. It can either increase or decrease the overall value of the stock.

Summary & Key Takeaways

• The goal of the video is to identify overvalued and undervalued stocks in the Dow Jones Industrial Average for potential long-term buy-and-hold investments.

• The analysis is based on discounted free cash flow calculations and comparing them to the current stock prices.

• Financial companies were excluded from the analysis due to the limitations of discounted free cash flow for this sector.