Stock Valuation Models - Professional Investment Analysis Tool

📊 Overview

Stock Valuation Models is a comprehensive financial analysis indicator that combines multiple valuation methodologies to calculate intrinsic stock value. This professional-grade tool implements 7 different valuation methods, risk assessment framework, and financial health metrics to provide data-driven investment decisions.


🎯 Key Features

📈 Multiple Valuation Methods

• Graham's Valuation - Conservative asset-based approach by Benjamin Graham
  
• Multiples Valuation - Market-based P/E and P/B ratios from sector peers
  
• Discounted Cash Flow (DCF) - Future cash flow projections with present value calculation
  
• Dividend Discount Model - Gordon Growth Model for dividend-paying stocks
  
• FCFF Model - Enterprise-level Free Cash Flow to Firm analysis
  
• EVA Model - Economic Value Added measurement above cost of capital
  
• Advanced Multiples - Enterprise Value ratios (EV/EBITDA, EV/Sales)
  

🏥 Financial Health Metrics

• Altman Z-Score - Bankruptcy prediction and financial distress assessment
  
• Piotroski F-Score - 9-point fundamental strength evaluation
  
• Beneish M-Score - Earnings manipulation detection system
  
• Magic Formula - Joel Greenblatt's combined quality and value scoring
  

⚖️ Risk Assessment Framework

• Multi-Factor Risk Scoring - Fundamental, market, quality, and data quality risks
  
• Risk-Adjusted Margin of Safety - Dynamic safety thresholds based on risk level
  
• Position Sizing Guidance - Risk-appropriate investment allocation recommendations
  

🔍 Data Quality System

• Real-Time Quality Tracking - Visual warnings for insufficient data
  
• Fallback Methodology - Alternative calculations when primary data unavailable
  
• Confidence Scoring - Method agreement and data quality assessment
  

⚙️ Settings & Parameters

Main Settings

• Margin of Safety (%) - Minimum discount required before buying (Default: 15%)
  
• Table Font Size - Choose between "Small" and "Normal" text size
  

Valuation Methods

• Graham's Valuation - Best for mature, stable companies with strong fundamentals
  
• Multiples Valuation - Compares to industry peers using dynamic sector ratios
  
• Discounted Cash Flow - Ideal for growth companies with predictable cash flows
  
• Dividend Discount Model - For consistent dividend-paying stocks (disabled by default)
  
• FCFF Model - Enterprise approach for leveraged companies and M&A analysis
  
• EVA Model - Measures value creation above cost of capital
  
• Advanced Multiples - Wall Street standard EV ratios for professional analysis
  

Additional Metrics

• Magic Formula - Combined quality and value scoring system
  
• Altman Z-Score - Bankruptcy risk assessment (Safe >2.99, Distress <1.81)
  
• Piotroski F-Score - Fundamental quality score (Excellent ≥8, Poor <4)
  
• Beneish M-Score - Manipulation detector (High Risk >-2.22, Low Risk ≤-2.22)
  

🔧 How It Works

Dynamic Calculations

1. Sector-Based Ratios - Automatically detects company sector and applies appropriate valuation multiples
   
2. Economic Integration - Uses real-time risk-free rates, VIX volatility, and GDP growth data
   
3. Quality Weighting - Adjusts method weights based on company type (growth/mature/distressed) and market conditions
   
4. Negative Value Handling - Shows actual calculated values but excludes negative results from weighted average
   

Risk-Adjusted Analysis

• VIX Integration - Higher market volatility increases required margin of safety
  
• Sector Risk Premiums - Energy and Financial sectors get higher risk multipliers
  
• Quality Adjustments - High Piotroski F-Score companies get lower risk ratings
  
• Data Quality Impact - Insufficient data increases risk score and safety requirements
  

Visual Display

• Horizontal Table Layout - Organized by method groups (Valuation → Results → Risk → Health)
  
• Color-Coded Results - Green/Yellow/Red indicators for risk levels and recommendations
  
• Warning Symbols - ⚠️ for data quality issues, ❌ for excluded negative values
  
• Dollar Amounts - Both percentage and dollar-based margin of safety calculations
  

📈 Interpretation Guide

💎 Intrinsic Value Results

• Weighted Average - Combines all enabled methods based on intelligent weighting
  
• Confidence Level - High/Medium/Low based on method agreement and data quality
  
• Method Count - Number of successful valuation calculations
  

🎯 Margin of Safety

• Percentage - Current discount/premium to calculated intrinsic value
  
• Dollar Amount - Absolute dollar difference per share
  
• Buy Price - Risk-adjusted target purchase price
  

⚖️ Risk Assessment

• Low Risk (Green) - Normal position sizing (3-5%)
  
• Medium Risk (Yellow) - Reduced position sizing (1-3%)
  
• High Risk (Red) - Minimal position sizing (<1%)
  

📊 Recommendations

• STRONG BUY - Low risk + adequate margin + high confidence
  
• BUY - Meets risk-adjusted margin requirements
  
• HOLD - Positive margin but higher risk
  
• SELL - Insufficient margin for risk level
  

🎓 Educational Tooltips

Every parameter includes detailed explanations accessible by hovering over the setting. Learn about:

• When to use each valuation method
  
• How different metrics are calculated
  
• Interpretation thresholds and ratings
  
• Risk factors and quality indicators
  

💡 Best Practices

🚀 For Growth Stocks

• Enable DCF and Advanced Multiples
  
• Focus on Piotroski F-Score for quality assessment
  
• Use higher margin of safety due to volatility
  

💰 For Value Stocks

• Enable Graham's and Multiples Valuation
  
• Check Altman Z-Score for financial stability
  
• Consider Magic Formula rating
  

📈 For Dividend Stocks

• Enable Dividend Discount Model
  
• Focus on sustainable dividend coverage
  
• Check for consistent dividend history
  

⚠️ For Distressed Situations

• Prioritize Graham's asset-based approach
  
• Monitor Altman Z-Score closely
  
• Use higher risk-adjusted margins
  

⚠️ Important Notes & Data Limitations

📅 Data Timing Considerations

Fundamental Data Lag - Company financial data (earnings, cash flows, balance sheet items) may be 1-3 months behind current market conditions

Quarterly Reporting Delays - Most recent available data reflects the company's situation as of the last filed quarterly/annual report

Market vs. Fundamentals Gap - Stock prices react instantly to news, while fundamental data updates occur periodically

Accuracy Impact - Recent business changes, market events, or company developments may not be reflected in current calculations

🔧 Technical Limitations

• Data Dependencies - Requires fundamental data availability from TradingView
  
• Quality Warnings - Pay attention to ⚠️ symbols indicating insufficient data
  
• Risk Context - Always consider risk score in investment decisions
  
• Market Conditions - Tool automatically adjusts for market volatility (VIX)
  
• Sector Specificity - Ratios automatically adjust based on company's sector
  

💡 Best Practice Recommendations

• Supplement with Current Analysis - Always combine with recent news, earnings calls, and management guidance
  
• Monitor Data Quality - Check when the underlying financial data was last updated
  
• Consider Market Context - Factor in recent market events that may affect company performance
  
• Use as Starting Point - Treat calculations as baseline analysis requiring additional research
  

🔗 Methodology

Based on established academic research and professional practices:

• Benjamin Graham - Security Analysis principles
  
• Joel Greenblatt - Magic Formula methodology
  
• Edward Altman - Z-Score bankruptcy prediction
  
• Joseph Piotroski - Fundamental analysis scoring
  
• Messod Beneish - Earnings manipulation detection
  
• Modern Portfolio Theory - Risk-adjusted decision making
  

This indicator is designed for educational and analytical purposes. Always conduct additional research and consider consulting with financial professionals before making investment decisions.