Fair Value (Episode 2) of ABC, ABMD, ABT, ACN and ADBE

In this blog, which will be the second blog in this series, I am going to calculate the fair value of the following companies:

  • AmerisourceBergen Corporation Known as ABC Symbol.
  • ABIOMED, Inc, Known as ABMD Symbol.
  • Abbott Laboratories, Known as ABT Symbol.
  • Accenture plc, Known as ACN Symbol.
  • Adobe Inc, Known as ADBE Symbol.

The fair value of the above companies will be calculated based on their market capitalization, total debt, and the cash the company has in hand, based on the financial statements released by the company in the last quarter.

Company Name (Symbol)Stock Price as Of June 15, 2022Fair Value of Stock
AmerisourceBergen Corporation, ABC142.31 $158.27 $
ABIOMED, Inc, ABMD232.35 $334.02 $
Abbott Laboratories, ABT104.80 $120.08 $
Accenture plc, ACN281.19 $322.31 $
Adobe Inc, ADBE376.92 $454.52 $
Companies’ stock prices and fair value

Note:

The fair value of stocks can be used as an indicator to show if the stock is overvalued or undervalued or traded at its fair value.

Fair Value (Episode 1) of A, AAL, AAP, APPL and ABBV

In this blog, which will be the first blog in this series, I am going to calculate the fair value of the following companies:

  • AGILENT TECHNOLOGIES, INC, Known as A Symbole.
  • AMERICAN AIRLINES GROUP, INC, Known as AAL Symbole.
  • ADVANCE AUTO PARTS INC, Known as AAP Symbole.
  • APPLE INC, Known as APPL Symbole.
  • ABBVIE INC, Known as ABBV Symbole.

The fair value of the above companies will be calculated based on their market capitalization, total debt, and the cash the company has in hand, based on the financial statements released by the company in the last quarter.

Company Name (Symbole)Stock Price as Of June 14, 2022Fair Value of Stock
AGILENT TECHNOLOGIES, INC, A 116.01 $119.62 $
AMERICAN AIRLINES GROUP, INC, AAL12.95 $18.24 $
ADVANCE AUTO PARTS INC, AAP171.48 $222.32 $
APPLE INC, APPL132.76 $177.05 $
ABBVIE INC, ABBV137.62 $163.13 $
Companiess’ stock prices and fair value

Note:

The fair value of stocks can be used as an indicator to show if the stock is overvalued or undervalued or traded at its fair value.

Best Investment choices: General Dynamics (GD)

Today I am going to continue in m series about the best investment choice individuals can make during this time where the uncertainty of stock market is high and the risk that can be taken is quite unknown.

General Dynamics (GD) is a global aerospace and defense company. From Gulfstream business jets and combat vehicles to nuclear-powered submarines and communications systems, people around the world depend on its products and services for their safety and security.

By analyzing the financial statement of GD I found that the company considered one of the best choice that individual can made based in the two main criteria that market is really appreciated about each stock which are Return On Invested Capital (ROIC), and ability to create value for investors by generating high free cash flow.

Based to GD’s ROIC as shown below, the company was able to jump from negative territory to a positive one in 2018 and was able to maintain high ROIC even when it was decreasing but still above the market average as well as the industry average.

Also, based in the company free cash flow, the company was able to do the same as its ROIC, the free cash flow (as shown below) has jumped from (-24) billion Droller to (5.249) billion droller in year 2018 and the company keep maintain this value for the followed year.

Based on the two criteria showed above (GD) one of the best companies that investors can buy its stock and holed it for at lest three ears.

Best Investment choices:AbCellera

In this series I will continue discussing companies that is considered the best choice for investment during this period of time where no one knows where is the market heading next.

AbCellera is a technology company that searches, decodes, and analyzes natural immune systems to find antibodies that its partners can develop into drugs to prevent and treat disease. From July 2020 until now its share prices dropped from 58$ until it reached to 9$. When analyzing the company financial statement , it appears that the company made high Return On Invested Capital (ROIC) greater than its peers as well as the industry in general, which made it create more value for the investors based in the free cash flow it generate that is the amount of money that left after paying all expenses and left for all the lenders and equity holders as shown below:

The ABCL created only negative ROIC in 2019, but immediately after one year the company increases its ROIC from -3% to 25%. The high ROIC which ABCL made, allow it to increase its value which lead to generate high free cash flow during the 2020 and 2021 as shown below:

The company was able to increase its Free cash flow by more than 997.5% in 2020, and in 2021 the company was still able to increase its free cash flow to 80% from 2020 and 1795% from 2019.

Based on the two major criteria that investors are looking for which is Return on Invested capital and Free cash flow, I believe ABCL considered the best choice for those who want to invest in stock market for at less 3 ears.

Best Investment choices: Microsoft

In this blog, I am going to show the second choice regarding stocks that people can Invest in especially with the unknown sentiments of the market. This choice is based solely on financial analysis of company financial statements and based on how much Return on Invested capital and free cash flow can be generated.

Microsoft is one of the most powerful companies that generate higher ROIC and Free Cash flow as shown in the below graphs:

As you can See in the above graph Microsoft from 2018 until 2021 doubled its ROIC from 16% until it made it 38%, which is one of the highest ROIC that company can make.

Also, Microsft generated high Free cash flow which was a result of its High ROIC as shown below:

Since Microsoft was able to double its ROIC, From 2018 until 2021, that lead to double its Free cash flow from 35.7 Billion in 2018 until it become 83.5 Billion in 2021 which help Microsoft Acquire Activision Blizzard in cash last year.

These two measurements make Microsoft one of the high candidates that people can invest in its stock, especially with the uncertainty that covers the stock market these days and no one can be sure where is the market heading next.