Margin Of Safety Analysis Of Stocks With Formula In Excel (With Marketxls)

Let us find out if there is a fast and easy way to screen stocks that are underpriced by the market using margin of safety analysis of stocks.

Margin of safety analysis of stocks

Key Concepts

Before we get down to the analysis, let us understand the key concepts we will use to perform this margin of safety analysis.

  1. Book value per share: If you assume that a company liquidates as on today, then what will be the value of one share. That means if you are a shareholder of the company and you own one share how much money you will get if the company shuts down today. So as the name suggests, this is the value of your share as per the books of the company.
  2. Margin of safety: Let us assume that the book value per share of a company is $10, but the market price of one share is $20. The difference between the market price and the book value is the margin of safety. Remember that the market price of a share may not always represent the value of that share. So in this scenario, even though we know for a fact that the value of one share of this company is $10 but still the market price of one share of the company’s $20. So, we may conclude that the market price is higher than the value of that share. Which means that the stock is possibly overvalued by the market.

Screen undervalued stocks

What we want to do with our analysis is find out, if there are some stocks where book value is higher than the market price. And also look to establish a relationship between the book value and the market price by looking into the historical data of some stocks. This analysis will make us more confident when we actually make our decision to recommend or buy an undervalued stock with this approach.

Using MarketXLS Formulas

MarketXLS has inbuilt functions to get the historical book value per share and also to get the historical close prices of the stocks. Below is the syntax that we will use to get these values.

This function will get the book value per share of any symbol in the history.

This function will get the historical close price of any symbol in the history on a specific date.

And this function will get the last price of the stock. The last price in the current price at which this stock is trading.

Analyze one stock

So before we do this analysis for the whole of the S&P 500, let’s value one stock. As you can see below I have collected the book value and the price of Microsoft in 2016. Now you may wonder what price point we will take as a representative of the whole year of close prices. For this analysis, we have taken the close price at the last trading day of a year.

book value per share

So the value $9.08 the is the book value of Microsoft and the period ending 2016 and the price $62.14 is the close price on the last day of trading in 2016.

The difference between the market price and the book value per share is the margin of safety. The higher this difference the higher the market perceives its value to be. However, as we understood earlier markets may not represent the real value of the stocks at all the time.

So, what if the market price of the stock is exactly same as its book value? In that case, we may say that the stock price is fairly valued by the market.

Now let’s look at what is the situation today as on July 7, 2017. We can simply use the formula like shown below. Instead of looking at each number we can calculate the ratio of the book value to the last price. This ratio shows us, that book value is x percent of the stock price.

When this ratio is 100% it means that the stock is fairly priced by the market and the sentiments do not play a big role in the price. In other words, the price is based on facts and not the opinion of the traders and speculators. When this value is 0% it means, that in reality there is no value in this company but still the market is assigning a value to it.

Screen the whole market for margin of safety analysis of stocks

So now we will do this margin of safety analysis of stocks for the whole of S&P 500 and find out the ratio of the book value to the stock price. So, we calculate the ratio and then sort the table in descending order of the ratio.

margin of safety

After doing this analysis we find a few stocks in S&P 500 which seems to be undervalued by the market. This analysis definitely provides us with some good candidates for further exploration.

Validations with historical data of multiple stocks

In an ideal world, the more the book value the more should be the share price. And if the book value per share of the stock is growing over the years its price should also increase. That means the book value per share will normally have or should have a direct relationship with the price of the share.

I have charted below the relationship between the book value and the price of various stocks to validate this.

AAPL-BV-Price.png” alt=”aapl margin of safety” width=”672″ height=”272″ /> MSFT-BV-Price.png” alt=”” width=”669″ height=”276″ /> XOM-BV-Price.png” alt=”” width=”677″ height=”275″ />

 

When looking at the book value and the price with the time perspective,  we can now some very interesting observations. For example, in the case of Blackberry, market initially started to be very optimistic about the company. But as the years passed the price settled near the Book Value.

In all these charts you would notice that the orange line is above the blue line. So, the price is mostly above the book value per share. But in the interesting case of GNW (Genworth Financial, Inc. (NYSE)) the book value is higher than the current trading price. So, we should look at this for our further analysis in our conquest of finding undervalued stocks.

GNW-BV-Price.png” alt=”” width=”674″ height=”276″ />

 

Perform margin of safety analysis of stocks with MarketXLS with more than 300 inbuilt stock market formulas.

[thrive_leads id=’5213′]

Verelq News |
24.04.2024

alexistogel macau

alexistogel

link alexistogel

situs alexistogel

alexistogel rtp

situs alexistogel

link alternatif alexistogel

alexistogel gacor

bandar alexistogel

alexistogel

alexistogel

alexistogel terpercaya

alexistogel gacor

alexistogel

alexistogel 4d

alexistogel

alexistogel

alexistogel gacor

alexistogel terpercaya

agen togel online

link alexistogel

alexistogel toto

alexistogel

alexistogel rtp

situs alexistogel

bandar alexistogel

alexistogel

link alexistogel

alexistogel

alexistogel togel slot

alexistogel

alexistogel online

alexistogel

alexistogel gampang menang

alexistogel 4d

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

slot gacor alexistogel

alexistogel

شرط بندی پرسپولیس شرط بندی استقلال شرط بندی روی تراکتورسازی تبریز شرط بندی روی سپاهان شرط بندی رئال مادرید بارسلونا شرط بندی شرط بندی psg سایت شرط بندی جام جهانی شرط بندی جام جهانی 2026 سایت شرط بندی جام جهانی 2026 بازی انفجار رایگان سایت انفجار ضریب بالا بهترین سایت شرط بندی فارسی شرط بندی بدون فیلتر شرط بندی بازی رولت شرط بندی پوکر شرط بندی مونتی شرط بندی سنگ کاغذ قیچی شرط بندی بلک جک کرش رویال بت پاسور شرط شرط بندی تخته نرد آنلاین انفجار 2 بت شرط بندی بازی اسلات شرط بندی بازی پوپ سایت سامان بت ریور پوکر 2024 سایت 4030bet ورود به بازی انفجار دنس بت شرط بندی انفجار دنس آموزش بازی پوکر سایت شرط بندی 123 بهترین شرط بندی بهترین سایت شرط بندی انفجار اپلیکیشن بازی انفجار دانلود بازی انفجار انفجار بازی ربات بازی انفجار کازینو آنلاین ایرانی انفجار پولساز ورود به بازی انفجار بازی انفجار با شارژ 10 تومن سایت bet betyek وان ایکس برو آدرس سایت بت یک سایت دوست دختر اونلی فنز فارسی پیدا کردن دوست دختر ورود به ریور پوکر پدرام مختاری پویان مختاری نازنین همدانی مونتیگو داوود هزینه بیوگرافی آیسان اسلامی بیوگرافی دنیا جهانبخت سایت رسمی حسین تهی بیوگرافی کوروش وانتونز سایت آرتا وانتونز رها وانتونز بیوگرافی ربکا قادری سحر قریشی بیوگرافی تتلو بیوگرافی مهدی طارمی الناز شاکردوست سایت عادل فردوسی پور بیوگرافی نیلی افشار بیوگرافی محمدرضا گلزار سایت armin2afm بیوگرافی شادمهر عقیلی بیوگرافی سردارآزمون بیوگرافی علیرضا بیرانوند بیوگرافی رامین رضاییان وریا غفوری بیوگرافی علی دایی بیوگرافی پوریا پوتک مدگل سایت حصین بیوگرافی صدف طاهریان فرشاد سایلنت بیوگرافی آریا کئوکسر بیوگرافی sogang بیوگرافی میا پلیز بیوگرافی مهراد هیدن سایت رسمی سهراب ام جی بیوگرافی علیرضا جی جی بیوگرافی بهزاد لیتو اشکان فدایی بیوگرافی رضا پیشرو بیوگرافی گلشیفته بیوگرافی هیپ هاپولوژیست بیوگرافی سارن بیوگرافی آدام مرادی بیوگرافی محمد هلاکویی بیوگرافی علی حسنی سایت رسمی علی حسنی بیوگرافی ساسی خواننده بیوگرافی ابی باربد معصومی حسینی فایننس بیوگرافی امیرحسین نام آور بیوگرافی امین فردین بیوگرافی فرزاد وجیهی سایت سیب بت سایت jetbet آدرس جدید بت فوروارد وان ایکس بت سایت abt90 بازی انفجار سایت شرط بندی فاز بت بهترین سایت شرط بندی انفجار ورود به آلپاری آلپاری فارکس آدرس بروکر آلپاری بدون فیلتر ثبت نام در بروکر آلپاری فارسی صرافی کوکوین ربات فارکس بهترین سایت تتر

alexistogel toto online

bandar alexistogel

alexistogel bandar gacor

alexistogel link

alexistogel online

alexistogel bandar togel

link alternatif alexistogel

alexistogel

alexistogel

alexistogel

alexistogel daftar

alexistogel toto macau

alexistogel bandar macau

alexistogel slot

alexistogel agen slot

alexistogel

situs alexistogel

alexistogel

alexistogel slot

alexistogel

alexistogel

alexistogel

alexistogel bandar slot

alexistogel

Alexistogel Toto Macau

alexistogel

bandar alexistogel

alexistogel slot

alexistogel link alternatif

alexistogel macau

alexistogel

alexistogel toto macau

slot alexistogel

alexistogel bandar togel

alexistogel

alexistogel rtp

alexistogel

alexistogel slot

alexistogel

alexistogel

alexistogel

alexistogel terpercaya

daftar alexistogel

alexistogel online

rtp alexistogel

alexistogel slot

alexistogel gacor

link alternatif alexistogel

alexistogel login

alexistogel

alexistogel slot dana

agen togel online

bandar togel online

alexistogel rtp

alexistogel slot

alexistogel daftar

alexistogel daftar

slot online dana

bandar togel slot

togel online terpercaya

slot pragmatic gacor

link situs slot resmi

situs slot online

link daftar togel slot

bandar slot gacor hari ini

bocoran pola slot

situs slot online

bandar slot online

bandar togel online

slot online terpercaya

togel slot online

slot deposit qris

agen slot online gacor

rtp live slot online

bandar slot online

bandar slot online gacor

agen slot online

daftar bandar togel slot

bandar togel online

togel slot hari ini

link alternatif togel slot

rtp slot online gacor

slot online gacor

situs slot gacor

rtp slot gacor

slot online gacor

tips slot maxwin

togel slot gacor

prediksi togel

game slot gacor

trik slot online

prediksi togel jitu

game slot online

togel online terpercaya

daftar togel slot online

bandar togel terpercaya

slot online gacor

trik slot bonus

prediksi togel online

rtp slot online

panduan togel online

RTP LIVE

Bandar Toto Macau

Situs Slot Gacor

bandarbola855 resmi

bandarbola855 gacor

bandarbola855 slot

link bandarbola855

bandarbola855 bola slot

bandarbola855 rtp

bandarbola855 slot online

bandarbola855 link

bandarbola855 bandar

bandarbola855 slot terpercaya

bandarbola855

bandarbola855 slot

bandarbola855 terpercaya

bandarbola855 online

slot bandarbola855

bandarbola855 slot

bandarbola855 daftar

bandarbola855 link

bandarbola855

bandarbola855

bandarbola855

bandarbola855 slot

bandarbola855

bandarbola855 rtp

bandarbola855

bandarbola855

bandarbola855

iosbet

iosbet

link iosbet

slot online iosbet

iosbet link login

slot iosbet

iosbet gacor

iosbet slot

iosbet

slot iosbet

agen iosbet

bandar iosbet

iosbet

iosbet link

bandar iosbet gacor

iosbet

iosbet

iosbet

iosbet

liatogel

bandar liatogel

login liatogel

live draw hk liatogel

liatogel slot online gacor

liatogel totomacau

liatogel link

slot gacor

daftar slot online

bandar slot dana

slot ovo

slot gopay