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It appears that the FFO and AFFO are very good methods for valuing real estate. We prefer the AFFO over the FFO, because the AFFO adjust for income statement items that produce a more accurate representation of the companies cash flow.

WikiWealth uses a DCF valuation approach to value REITs, because like all investments, REIT are valued based on their ability to produce cash flow. Our DCF analysis allows comparisons between REITs and other companies, which is a major advantage of our research reports: apples to apples comparisons.

We hope this helps,

WikiWealth

http://profile.ak.fbcdn.net/hprofile-ak-snc4/hs355.snc4/41700_1268578065_2385_n.jpg

One of the stocks, Ciber CBR, is an interesting prospect. CBR in October of 2005. They were trading at $6.46 and making $800 mil in rev. Now they're pulling in over a billion $ in rev and trading at $2.84. Revenue is up just about 30% in 5 years (6% yr avg). Yet the stock is down 55% since and over what? Nothing of any real signifance.

Then there's Wikiwealth right there :)
[http://www.wikiwealth.com/research:cbr]

I am still trying to figure it out but thanks for the website!

Good luck!

YS

Thanks for visiting WikiWealth. Apple's WACC is 10% and it's located here: http://www.wikiwealth.com/research:aapl. Go to the tab (across the top) that says "WACC". Find the "Experiment…" link and you'll be able to change Apple's WACC calculation how you see if. All the information updates in real time, so enjoy.

There is one difference in our WACC calculation. We use an industry WACC that calculates the debt to capital ratio based on the industry average. This type of calculation results in more accurate and steady WACC calculation. If you would like a Apple specific WACC calculation, then just change the ratio to what you feel is most appropriate.

Write back if you have any other questions,

WikiWealth

but still, how should we get wacc of apple, which is actually cost of equity of apple(apple has no debt if i m not wrong), thank you so much!

ys

Specifically i am looking for revenue and cost drivers for industry. Few of the drivers might be - revenue per case/bottle, average price/case, acerage under grapes etc. What other key drivers could be there? And is there any sample valuation available for wine firm on wiki ?

Thanks

If you are looking for unique industry specific ratios, you can look for volumes of wine sold. This assumes that a company produces 100,000 liters of wine is worth the same as another company that produces the same volume of wine. The more similar the companies, the better your comparison will be.

We hope this help. Post any other questions you may have.

WikiWealth

You'll learn the most about trading and investing by actually purchasing small amounts of a wide variety of stocks. When you do this, you'll understand how market news affects your companies and see why stocks go up or down.

If you have any other questions, feel free to reply. Good luck, WikiWealth.com

WikiWealth.com

Scroll down the page to find the column on the right side. We only have the top 30 companies so far, but we will upgrade this over the next few months.

WikiWealth

Thanks

You have some very good question. Let me answer them one at a time:

1. Reliability and Accuracy: We rely on our in-house talent to establish a base level of quality. To enhance our quality standards, so rely on users to edit, change, and improve textual information. Users notify us of improvements we can make to our quantitative information.

2. Quality Check & Manipulation: Our team reviews every change to the site. This assures quality and filters spam. We do additional research if we suspect manipulation.

3. Insider Information & Leaks: We, unfortunately, can't disclose our procedures for dealing with this type of information. We follow all legal precedence.

4. Background of Team: Our team originates from Duff & Phelp's (http://www.duffandphelps.com/Pages/default.aspx), the leading valuation firm in the world. Our intellectual leaders hail from Harvard and NYU Stern.

5. Contributions: Since we review every contribution, we appreciate any person who would like to share their unique knowledge to improve the quality of the research on WikiWealth. Use WikiWealth to record your notes on your favorite companies. Users will help improve on your initial thoughts and we will all benefit from better investment research.

6. Skeptical: Absolutely all of our information is transparent, so if you suspect anything is wrong, you have our full analysis to investigate the quality of our work. Additionally, you can experiment with our valuation models to create your own unique conclusions. We simply provide a forum to share information and some advance models to help with your investment picking.

We hope this helps. Send any additional investment questions as they arise.

Dave

I have a similar question: how in general do you establish reliability and accuracy of information?
In addition what is your review procedure, and which quality checks do you establish.

It would be helpful if you could outline your practices in more detail and provide more background on the people behind the project, as well as how you prevent insider information being leaked and attempts on market manipulation and qualifications of people participating in the project.

I like the concept and actually though about a similar site a few months back. However, the quality assurance issues have deterred me for the moment. If would learn more about how you manage quality, I could imagine becoming a contributor and user. So far I remain skeptical of the information being provided.

Best Regards,
AT

You have a great question. WikiWealth's team of analyst make the projections, but we make very conservative projections. Market research shows that the investment analyst tend to overestimate projections; therefore, we prefer a very conservative opinion. Additionally, it's better to be conservative, because we dislike losing money. All of our projections are done the same way, so you can compare BDX to Apple and know that we used the same tough standards for both. This makes it easier to compare.

We encourage visitors to use our experimental mode, which allows you or anyone else the ability to change those projections and arrive at a better conclusion of value. This mode will not change the results for anyone else, so you can use this tool all you want without worry.

Also, we are in the middle of a major update to all our analysis reports. Our new BDX estimates will show much higher growth rates in 2010 and beyond. Use our experimental mode to plug in you own estimates. Maybe BDX is a diamond in the rough.

WikiWealth

The health reform care bill will expand the health care industry. There are few cost controls while the number of people with insurance will dramatically increase. Previously uninsured people will require new products and services that medial supply companies will provide. These trends will also increase the demand for doctors and nurses over the near term. Two companies that benefit from this trend are:

1. Cross Country Healthcare: http://www.wikiwealth.com/research:ccrn
2. AMN Healthcare Services: http://www.wikiwealth.com/research:ahs

What you must look out for are future cost controls in separate bills. These cost control measures are vital to fixing the deficit, so expect them to eventually come. These controls will likely affect the demand for medical equipment and services. The current US model rewards the latest technology, whereas, a future model will reward cost efficiency, which will squeeze the profits for all high priced equipment.

WikiWealth.com

I have been looking every where to try to find information about this new health care reform bill and how it is going to affect the medical supply industry and Zimmer. It seems that these companies are in fact being affected by this new bill, but how, and to what extent are they being affected? If anyone knows of any honest information it would be very helpful.

Thanks,

There are lots of ways to calculate the WACC. Don't forget, it's simple the weight average cost of capital. So find the cost of debt and the cost of equity and weigh the two per your capital structure. You can use our company-specific WACC calculations to help guide you, but those calculations are very involved and are sometimes very complicated. You can make a few assumptions that help:

1. The cost of debt is simply how much a bank is willing to lend a company. Find the company's interest payments and divide that number by their total interest bearing debt. You can average it over a period of time and / or take an average of their peers to smooth out any issues. You can also look up the companies debt rating (e.g. BBB, AAA, CCC+) and find the cost of debt on a yield curve. Make sure you find the cost for corporate debt versus treasury debt, which is of high quality and lower interest payments.

2. Long term debt is found on the balance sheet under liabilities. Sometimes it's not clear, so you will have to read the notes per line item to understand the information better. For the WACC calculation you will need total debt, which is LT plus ST debt capital.

I hope this helps,

Dave

1. In a narrow sense, you can assume the 6.5% yield is the cost of debt for that subject company. You need to know the cost of all the other debt that your company owns in order to understand the average cost of debt for that company. In the next update to the site, we will introduce an implied cost of debt, which is the net interest expenses / total interest bearing debt.

WikiWealth differs in their approach to the cost of debt, because we take an industry average cost of debt and assume that each company will gravitate towards that optimal cost of debt over the long term. We make assumptions for 20 yr time periods. Individual measurements of cost can change over the short time, so we don't rely on them.

2. If we understand correctly, net borrowing is just the difference between what you borrowed and what you lent. We may need more information to understand your question.

Good luck. WikiWealth

1. If they already have interest-bearing debt outstanding, then you take their current interest rate and divide it by their total interest-bearing debt amount. You must check the financial statement notes to make sure the interest rate will not dramatically change at some date in the future. This is a pretty easy and standard method.

2. You can check their S&P, Moody's,… etc bond ratings, then check the corporate bond yield to match the rating with the expect interest rate in the market. See this page under the academic resources —> cost of debt section: http://www.bondsonline.com/Todays_Market/Composite_Bond_Yields_table.php

3. You can use a comparable approach. Use the technique from the first approach, but figure out the number for each of their competitors. Then average the numbers together.

These solutions will certainly solve your problem, but I imagine you could also call the company and get some type of answer.

I hope this helps,

1. The Risk Free Rate of interest is found here: http://www.treas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml. We use the 20 year rate for all companies, because we expect to invest in those companies for the next 20 years.

2. The Market Risk Rate, which I assume is the Market Risk Premium or Equity Risk Premium (definition) is 5% for all companies that we follow. This is the premium over the risk free rate that investors need in order to purchase equity investments. Academic research supports the 5% premium.

Write back any questions. Thank you

We reach the target stock price using a weighted average of the three very sophisticated valuation approaches listed below:

1. Cash Flow
2. Comparative Multiples
3. Warren Buffett Approach

You can see and experiment with our analysis on any of the company analysis pages.

Dave

Prices depend on other people's actions, so it could be years before stock prices go to the target. They always move towards the targets at some point.

I hope this helps, Dave

EPS is the most manipulated number in investing, so we do not use it. Besides that, Yahoo information is notoriously inaccurate and outdated, so those might explain the odd numbers on their part. Firms can make EPS it do and say whatever they want because accounting standards are so flexible. The best way to guard against this type of manipulation is to do a cash flow valuation approach, which we show in the "Cash Flow (DCF)" and "Buffett Calc." analysis. In fact, the cash flow approach is the same way Warren Buffett does his analysis.

If you want to use the EPS comparative method, then a normal EPS is 12. If you take $4.44 times 12, then you get a price of 53.28 dollars per share. If you take $2.44 times 12, you get a price of 29.28, which is much closer to our number.

Stocks are nearly certain (9 out of 10) to hit the suggested stock price, because stock prices swing up and down all the time. The timing of of these swings is big issue, because it could take days or years. Let's take TEVA Pharma for example. The current price is roughly $60 dollars per share. Our suggested price using three very sophisticated valuation approaches is $23 dollars. The potential of this company is negative 60%, so over time, the stock price will likely fall back to the suggested price. If the company does much better than expected, the suggest price will increase over time, but I would rather sell an overvalued company like TEVA and buy an undervalued company like Astrazeneca. This is how you invest: "buy low, sell high." ;-)

If you would like to experiment with our analysis, just find the "Experiment" link on top of the page for each analysis. We want our visitors to trust the analysis, so we allow them to experiment with our work and understand the level of quality we put in to each analysis.

Write back if you have any other questions.

WikiWealth