Generate Value

How we can claculate the share value of a company ?

I am trying to understand the share value available in market, is at correct price? over sold? or underselling?

Public Comments

1. you calculate price by mutliplying the EPS and the P/E multiple and to see if is is over or under sold you need to go to the chart and look at the RSI
2. The market price is the only value of the stock. Lots of academic folks try to calculate "true values" or some such from fundamental information, but in the end it is the market that sets the price. And the price is the value. Overbought or oversold have to do with the ratio of buyers and sellers at any instant. A stock is oversold when all the sellers have sold. Only folks left in the game are buyers and the sellers have gone away. So, any purchase is against a thin supply and the price will react strongly upward. There are many technical indicators that show (maybe) the swing from overbought to oversold. RSI is one, MACD (in histogram format) is another. Have a look at a technical techniques text to find out more about this.
3. you can calculate EPS,P/E ratio,gearing ratio(as to know level of risk if comapny financing by debt),value shares(net asset/Number of shares),Economic value added(EVA)