When it comes to stocks, share price isn’t everything. In fact, it isn’t much at all. The real question is, “What is the share price compared to what that tiny piece of the company is actually worth — or will be worth?” Unfortunately for the average retail investor, there are a raft of different formulas to measure that, and different yardsticks for each.
In this segment from the Motley Fool Money podcast, host Chris Hill and Fool senior analysts Aaron Bush, Ron Gross, and Jason Moser address the question of a listener who wants to know their favorite ways to value companies — and at least one method will likely be unfamiliar to you.