If you want to know how much a stock is worth, don't ask a City analyst

Market analysts frequently get it wrong. So, if you want to know if a share is good value, you're best off doing it yourself. Phil Oakley explains how.

One of the most basic questions an investor can ask is how much is this investment worth? If you buy an asset, it's usually because you believe it's cheap that it is worth more than the market is currently charging for it. But how do you calculate an investment's value?

It's quite easy for something like a bond. You usually know the coupon' a bond will pay each year, and also when it will mature (ie, when you'll get your money back). So you can work out the amount of money it will produce over its lifespan, then decide whether that's a good deal or not.

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Phil spent 13 years as an investment analyst for both stockbroking and fund management companies.

 

After graduating with a MSc in International Banking, Economics & Finance from Liverpool Business School in 1996, Phil went to work for BWD Rensburg, a Liverpool based investment manager. In 2001, he joined ABN AMRO as a transport analyst. After a brief spell as a food retail analyst, he spent five years with ABN's very successful UK Smaller Companies team where he covered engineering, transport and support services stocks.

 

In 2007, Phil joined Halbis Capital Management as a European equities analyst. He began writing for MoneyWeek in 2010.