An Alternative Approach to Fundamental Analysis: The Asset Side of the Equation
Journal of Portfolio Management, 17(1991) pp. 6-16; https://jpm.pm-research.com/content/17/2/6
Posted: 6 Nov 2020
Date Written: August 1, 1990
Abstract
A standard approach for determining the fundamental value of financial claims is to compute the discounted value of the expected dividend stream. This paper discusses an alternative approach that estimates fundamental value as the discounted value of the cash flows expected from underlying real assets. Illustrative empirical estimates indicate that the ratio of market to fundamental value varies over time and across industries.
Downloadable document available at: https://jpm.pm-research.com/content/17/2/6
Keywords: fundamental value, intrinsic value, effects of tax policy, value investing, overvalue ratio
JEL Classification: G00, G11, H21
Suggested Citation: Suggested Citation
