Has any one reviewed Morningstar.in ? Is it the subsidy of the same Morningstar (US) ?
They have a feature which shows thr Fair Value of every stock, how good/close it is ?
Go to screener and use intrinsic value
Much better and cheap
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Its free on Morningstar.in, look more practical than the one on screener.
Any suggested number is a good starting point if one maintains his skepticism and judgment, considering the nature and approaches of valuations.
To improve your thinking on this aspect, you may read my views on a similar topic that I published on https://myequitysherpa.in/. Complete text reproduced here:
Thinking Valuation and Prices
Everyone would like to know and buy at a price that will remain the lowest price among all the future quotations. But knowing such a price is a mirage. Hence, a better question worth contemplating is: How not to pay too much? Such a mental state makes it imperative to focus on the process, which is very specific to every individual and needs continuous refinement. Here is my thinking that precedes the process I follow:
- Firstly, no silver bullet exists.
- Secondly, the price trend is a good indicator of prevailing psychological factors (supply-demand, narratives, recent performance compared to prior expectations, and adjusted earnings expectations) in the near term. However, the price CAGR results from long-term earnings performance.
- Thirdly, analyzing fundamentals is a must exercise to develop conviction. Look for mispriced opportunity, basis fundamental triggers [earnings growth, optionalities, nature of the business (terminal value, B2B Vs. B2C, type of product , opportunity size, Cyclical Vs. structural demand, reliability of the cash flows), capital allocation, etc.] that are yet to reflect in the price.
- Fourthly, value is a fact and growth is an opinion. As it is impossible to forecast the market’s mood, work patiently to find mispriced bets that are unrelated.
- Ultimately, future outcomes are uncertain (amount and the timing of the cash flows, financial shenanigans, unexpected economic shocks such as COVID, Red Sea fiasco, etc.). Valuation is not only subjective (Investment horizon, Expected Returns) but also relative [current market state (bullish/bearish), sectoral tailwinds, liquidity in the system, intangibles (competitive advantages, financial strength, management) of the business that are very important even though they cannot be measured and processed by mathematical models].
Hence, valuing with precision is impossible as too many variables influence valuation, making it imprecise and subjective. In turn, self-doubts magnify as and when the price starts to correct. The only place to direct our efforts is in the process of thinking about the prices. Start with a price chart to sense the current trend. This step makes it easier to process many names quickly compared to the approach of fundamental analysis, & highlights the names that are in demand in the current market environment.
Price trend will fall in one of the below three categories:
- Up: Analyze fundamentals. The story seems interesting. However, the price has already run up too much. Track and wait for price pullback (continuation patterns). Take a position as and when the opportunity arises.
- Down: Analyze fundamentals. The story seems interesting. However, market participants are not interested in this name. Track and wait for the completion and confirmation of the price correction (base formation patterns). On pattern confirmation, take position only if fundamental factors are still promising.
- Rangebound: Analyze fundamentals. The story seems interesting. The ongoing price trend implies that market participants are yet to make up their minds. Track and wait for the completion and confirmation of the price correction (base formation patterns). On pattern confirmation, take position only if fundamental factors are still promising.
Overall, analyzing fundamentals is a must. Always start with technical factors to decide the name to be analyzed deeper. Analyzing fundamentals provides the conviction to size positions and calmness during moments of volatility. Basing the decision on such a hybrid approach reduces the uncertainty range and helps to ride the uptrend with confidence. However, even this approach will not be able to find only winning bets. Ultimately, one attains the best path to follow by continuously refining their process.
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