How Can I Value a Company on My Own?

Ever wonder how to find the fair value of a company for yourself, without relying on Wall Street's numbers?

In this video from Thursday's edition of Where the Money Is, Motley Fool financial analysts Matt Koppenheffer and David Hanson take a question from a Fool reader who asks, "I would like to know exactly how to calculate the true value of a stock, both dividend paying and non-dividend paying. What are the necessary formulas/calculations? Would you be able to give me an example? Are there issues that can not be calculated such as management forces?"

The guys discuss why this is such an enormous question to tackle, what the basic theory behind valuing a company is and what the steps involved are, and where investors can go to find tools that will help them along the way.

Looking for something easier? Here are three great stocks to buy and forget.
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal "The Motley Fool's 3 Stocks to Own Forever." These picks are free today! Just click here now to uncover the three companies we love.

The article How Can I Value a Company on My Own? originally appeared on Fool.com.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.