StockDelver is a digital download that educates investors and helps them find great companies to invest in. It is suitable for anyone that wants to incorporate individual stocks within their mix of assets.
- A PDF book that explains exactly how I find outperforming stocks.
- A streamlined Excel spreadsheet that helps you determine fair value.
- A PDF set of instructions for how to use the spreadsheet.
Individual stock ownership isn’t for everyone, but it can be a very rewarding practice. I’ve been buying individual stocks for 15 years now with great results, and this guide explains in detail exactly how I find good companies to invest in.
StockDelver is meant for long-term investors with an eye towards valuation. Although the book’s emphasis is on dividend growth stocks, this guide covers high-quality stocks regardless of whether they pay dividends or not. Value stocks and growth stocks are both covered, except for speculative early-stage businesses.
Digital PDF Book
The main feature of this download is a 136 page PDF book that you can read on any device. It describes my stock analysis strategy in detail, all in one place.
I kept the book as short and actionable as possible, so that it can be read within a few sittings and isn’t a big investment of time. However, some chapters have considerable detail with specific examples, so it can be re-read multiple times for investors that want to immerse themselves more deeply and fully understand all of the details. Basically, it’s both concise and thorough, so you can choose your own level of immersion.
Some sections are suitable for beginners, but there are chapters that even advanced investors can learn from. Chapters towards the end provide unique strategies backed by research for improving portfolio returns that aren’t widely known or practiced.
Fair Value Calculator
Accompanying the digital book is an Excel spreadsheet that helps users apply various valuation methods to stocks they are interested in. That way, you can avoid overpaying for stocks.
It’s fast to use, and has four different tools:
#1) Detailed One-Stage Model
This is elegant in its simplicity, yet powerful and flexible in its approach.
The hardest part about applying discounted cash flow analysis, or using any stock valuation method, is figuring out what growth rates to use. An output is only as good as your inputs are accurate, so if your forecast is off and you put bad numbers in, you’ll get bad numbers out.
This framework makes it easy to segment the growth estimate into individual parts, so that you can approach them individually and come up with an accurate estimate.
Here’s an example of what it looks like:
You start with top line growth, and work your way down from there, variable by variable, using recent company history, investor presentations regarding management plans and goals, or any other data you have available, to determine how the performance might play out over the coming years.
The output area automatically calculates a result for you, based on your inputs.
I like to use this tool for sensitivity analysis as well. Once you have a valuation estimate, you can see how negative impacts to pricing or growth or anything else can affect how your investment will turn out.
This helps you identify risks ahead of time.
It works on just about any type of publicly-traded company, whether they pay a dividend or not.
#2) Simple Two-Stage Model
The simple two-stage model cuts right to the chase and lets you calculate the fair value of a stock based on changing growth rates:
This is great for fast-growing companies that will necessarily be slowing down in a few years.
#3) Dividend Discount Model
The spreadsheet has a dividend discount model sheet for high-yield companies:
I cut the output picture short because it’s a long image.
This model is great for REITs, MLPs, or any high-yielding dividend stock. You don’t need to use a 10-year sale multiple like the others; it calculates the sum of perpetual discounted dividends for you.
#4) Graham and Lynch Formulas
Lastly, the calculator includes a page for modified Graham and Lynch formulas:
It calculates the original Benjamin Graham formula as well as his modified version for various interest rate environments. In addition, it calculates a dividend-adjusted P/E/G ratio, which is a modified version of Peter Lynch’s popular valuation approach.
The instructions walk you through each of these methods step by step and explains how they work.
Platform-Independent and 100% Unlocked
Although this is an Excel (.xlsx) file, it can be opened and used on most spreadsheet programs, including free ones like Open Office.
You can even upload it to Google Drive and use it on the cloud like a web application.
I chose not to lock or hide any of the cells. You can see all the formulas if you want, and you can customize the spreadsheet file to suit your needs.
StockDelver is available as a digital download for $15.95.
(If you own one of the older versions of StockDelver, you can enter the product code from the last page of the instruction guide into the payment form below to get $10 off, and thus only pay for the new material.)
This 136 page PDF book covers my specific approach for finding great companies to invest in and how to determine a fair value range for them. It also delves into portfolio weighting approaches and other tactics to boost your returns in ways that most investors are not familiar with.
The download also includes the Excel calculator (.xlsx) that has the various fair value calculators and a 20-page detailed PDF tutorial on how to use it.
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Download StockDelver below: