Why does intrinsic value and market price differ for stocks?
Why does intrinsic value and market price differ for stocks?
In the world of investment, investors are constantly looking at companies that are undervalued or overvalued compared to their intrinsic value so that we could harvest the difference between market value and intrinsic value. That may sound easy, but it's often hard to achieve in real life, considering Intrinsic value is an estimate of the true value of a company.
在投资界,投资者一直在关注那些相对于内在价值被低估或高估的公司,这样我们就可以收获市场价值和内在价值之间的差异。这听起来可能很容易,但在现实生活中往往很难实现,因为内在价值是对一家公司真实价值的估计。
Market Value, on the other hand, often refers to market capitalization which is simply the multiple of outstanding shares and the share price. Most of the time market value is significantly different from the intrinsic value which drives the market to be moving constantly.
另一方面,市值通常是指市值,简单地说就是流通股和股价的倍数。大多数时候,市场价值与驱使市场不断变动的内在价值是显著不同的。
Intrinsic Value
内在价值
Intrinsic value is a core metric used by value investors to determine if a company is worthy to invest in. A value investor would either invest in stocks that have a market value that is lower than its intrinsic value, or short stocks that has a market value that is higher than its intrinsic value.
内在价值是价值投资者用来确定一家公司是否值得投资的核心指标。价值型投资者要么投资市值低于内在价值的股票,要么做空市值高于内在价值的股票。
Intrinsic value is difficult to determine since it's a complex of a company's both tangible and intangible assets, which includes financial performance, market sentiment, economic moat, and business strategy, etc. It's extremely difficult to define a certain price of these factors for both individual investors and professionals. It's very common for different investment firm provides different price expectations for a company.
内在价值很难确定,因为它是公司有形资产和无形资产的综合体,包括财务业绩、市场情绪、经济护城河和经营战略等。对于个人投资者和专业人士来说,很难为这些因素确定一定的价格。不同的投资公司为一家公司提供不同的价格预期是很常见的。
There are multiple ways to define intrinsic value. One of the most common is estimating by Discounted Cash Flow model. The intrinsic value of a company is the present value of the future free cash flows of the company in DCF calculation. However, this method only measures financial performance and is limited by model risk.
定义内在价值有多种方式。其中最常用的一种是用贴现现金流模型进行估计。在折现现金流计算中,公司的内在价值是公司未来自由现金流的现值。然而,这种方法只衡量财务业绩,并受到模型风险的限制。
Market Value
市场价值
Market value is the company's value calculated by multiplying its current share price and outstanding shares amount. It rarely reflects the actual value of the company. Since the market value of a company is highly correlated to the market sentiment about a company. The share price of a company could be pushed by a market frenzy to any price. The perfect example is the meme stocks that are favored by WSB investors in 2021.
市值是公司的价值乘以其当前股价和流通股数量计算出来的。它很少能反映出公司的实际价值。因为一家公司的市值与市场对一家公司的情绪高度相关。一家公司的股价可能会被市场狂热推高至任何价格。最好的例子是2021年备受WSB投资者青睐的表情包股票。
The market value is normally higher than the intrinsic value of the company if there is strong investment demand, which could cause a possible overvaluation. The opposite is true if there is weak investment demand, which can lead to the undervaluation of the company.
如果有强劲的投资需求,市值通常会高于公司的内在价值,这可能会导致估值过高。如果投资需求疲软,则情况正好相反,这可能导致公司估值被低估。
Source: Investopedia
来源:Investopedia
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