Investment Valuation in India

A stock-screening method outlined in Forbes magazine in 1988 addresses this issue by adding two numbers to the traditional PE analysis. The PEND method, uses simple arithmetic to discover shares likely to outperform the market. The PEND method is powerful, yet straightforward. It needs just four numbers to analyze a stock. The numbers are available in the financial sections of newspapers or from stock-market websites. They are; Share Price, Earnings, Net Tangible Assets (NTA) and Dividend. Net Tangible Assets per share is also called Book Value by some. NTA is the total value of a company's assets, excluding intangibles such as goodwill and trademarks. Its inclusion is crucial to PEND because it provides us with a way of assessing how well a company is using its assets - something a simple PE ratio cannot do. From the four numbers above, PEND calculates three figures that instantly tell us whether a stock is attractive compared with run-of-the-mill stocks. The first number we call ...