According to my research, the intrinsic value of F&N is RM17.85 per share. To achieve a safety of margin for the investment, I use to buy a company's share when its market price is 20% in discount to its intrinsic value, so the target price of F&N is RM14.28.
The excel modelling for F&N is a little bit complicated than the previous excel file for Nestle, as this time I calculated the 5-year Beta of F&N based on its fluctuation for past 5-year daily prices against the daily fluctuation for the KLCI index.
F&N
Monday, September 26, 2011
DCF Valuation (1): Nestle (Malaysia) Berhad
I have recently completed the valuation for few companies for my own investment research. I used the discounted cash flow method ("DCF") to derive the valuation of the companies. So far all the companies I valued are blue chip companies which generate stable free cash flow and thus they are suitable to be valued by the DCF method.
The 1st company I did the research was Nestle (Malaysia) Berhad. I completed this valuation few weeks ago and share that in a chinese investment forum. Since I have not long updated my blog for quite some time, I uploaded my research to update my blog.
According to my research, the intrinsic value of Nestle is RM48.37 per share. As I am a value investor, so I would only buy a company's share which market price is 20% in discount to its intrinsic value, so the target price of Nestle is RM38.70.
Nestle.rar
(Finally I find a way to upload my excel file, so I am here providing a guide how to download the excel file. Please look at the picture I posted for the procedure to download the excel file:
1st step - click at the Nestle.rar link
2nd step - the link will then direct you to the google docs page as shown in the picture
3rd step - click the "file" selection as shown in the picture will drop down a list, so select "Download original" to save the excel file into your PC...^_^)
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