FED+ Single Stock
The FED+ (Future Earnings Discounted Plus Equity) Model is based on a back-tested and strategy-proven academic model. It simply states that the fair value of a stock is equal to the present value of future earnings plus equity. One also need to discount the future earnings using the appropriate discount rate. I use 11% discount rate for large-cap U.S.-based stocks because that was the average annualized return in the last century. However, depending on the sector risk, you might need to increase this rate. For small caps, you need to increase the discount rate as well. FED Fair value does not include equity. Thus, it is the lower boundary for the fair-value estimation. FED+ Model counts for net equity as well. Therefore, it is the upper boundary for the fair-value estimation. Here, you can find updated links to my FED+ Single Stock articles on SeekingAlpha.com Investment Community Website:
Green Mountain Coffee Sell-Off Adds Up To A Bargain Buy
FED Fair Value = $67
FED+ Fair Value = $79
Caterpillar Has At Least 18% Upside Potential
FED Fair Value = $109
FED+ Fair Value = $129
Abbott: A Dividend Pick For the Next 5 Years
FED Fair Value = $57
FED+ Fair Value = $75
Intel Has At Least 47% Upside Potential
FED Fair Value = $35
FED+ Fair Value = $44
Apple Has At Least 45% Upside Potential
FED Fair Value = $570
FED+ Fair Value = $646
GE Has Significant Upside Potential
FED Fair Value = $22
FED+ Fair Value = $34
Google Has Up To 46% Upside Potential
FED Fair Value = $705
FED+ Fair Value = $866
Duke Energy Is Undervalued Compared To Its Peers
FED Fair Value = $17
FED+ Fair Value = $34
Southern Company: Slightly Overpriced But A Great Long-Term PickShare
FED Fair Value = $31
FED+ Fair Value = $52
Netflix: The Recent Sell-Off Created Rare Opportunity To Buy Below Fair Value
FED Fair Value = $171
FED+ Fair Value = $178
eBay: A High-Growth Company Priced Within The Fair-Value Range
FED Fair Value = $28
FED+ Fair Value = $41
Accenture Is Fairly Valued With A Strong Balance Sheet
FED Fair Value = $52
FED+ Fair Value = $58
Target Has Significant Upside Potential
FED Fair Value = $68
FED+ Fair Value = $91
Visa's Upside Potential Is Vast
FED Fair Value = $100
FED+ Fair Value = $133
Home Depot's 60% Upside Potential
FED Fair Value = $40
FED+ Fair Value = $52
Walt Disney Has Significant Upside Potential
FED Fair Value = $43
FED+ Fair Value = $64
Union Pacific Has Almost 100% Upside Potential
FED Fair Value = $133
FED+ Fair Value = $171
News Corporation Trading 20% Below Its Fair Value Range
FED Fair Value = $20
FED+ Fair Value = $31
CVS Caremark: Fairly Valued Company
CVS Caremark: FED Fair Value = $45
CVS Caremark: FED+ Fair Value = $73
Royal Caribbean Offers Unprecedented Buying Opportunity September 2, 2011
Royal Caribbean: FED Fair Value = $51.59
Royal Caribbean: FED+ Fair Value = $89.99
ACE Insurance: A Substantial Dividend And At Least 100% Upside Potential September 2, 2011
ACE Insurance: FED Fair Value = $116.13
ACE Insurance: FED+ Fair Value = $187.88
Boeing Has Almost 30% Upside Potential September 1, 2011
Boeing: FED Fair Value = $78.39
Boeing: FED+ Fair Value = $84.78
Cognizant Technology A High-Growth Stock Priced Below Its Fair Value August 31, 2011
Cognizant: FED Fair Value = $64.87
Cognizant: FED+ Fair Value = $77.88
Baidu: Limited Upside, Unlimited Downside August 31, 2011
Baidu: FED Fair Value = $139.70
Baidu: FED+ Fair Value = $144.71
Comcast: Trading Way Below Its Fair Value Range August 29, 2011
Comcast: FED Fair Value = $25.87
Comcast: FED+ Fair Value = $42.83
Las Vegas Sands: A Roller-Coaster Stock But Fairly Valued Under $47 August 25, 2011
Las Vegas Sands: FED Fair Value = $36.42
Las Vegas Sands: FED+ Fair Value = $47.30
La-Z-Boy Offers More Than 100% Upside Potential August 24, 2011
La-Z-Boy: FED Fair Value = $13.75
La-Z-Boy: FED+ Fair Value = $20.71
Sirius XM: A Rare Opportunity To Buy Below Fair-Value August 23, 2011
SiriusXM: FED Fair Value = $1.76
SiriusXM: FED+ Fair Value = $1.88
Amazon: Trading 100% Above Its Fair Value August 23, 2011
Amazon.com: FED Fair Value = $73.94
Amazon.com: FED+ Fair Value = $91.04
Wal-Mart: A Dividend Pick for the Next 5 Years August 4, 2011
Wal-Mart: FED Fair Value = $69.87
Wal-Mart: FED+ Fair Value = $88.55
McDonald's is Slightly Over-Priced but a Must Have for the Ultimate Retirement Portfolio (July 24, 2011)
McDonald's: FED Fair Value = $69
McDonald's: FED+ Fair Value = $83
Google Has 45% Upside Potential for the Long-Term Investors (July 8, 2011)
Google: FED Fair Value = $646
Google: FED+ Fair Value = $796
AT&T Stocks Offer 80% Upside Potential for the Long-Term Investors (June 30, 2011)
AT&T: FED Fair Value = $37
AT&T: FED+ Fair Value = $55
Microsoft Stocks Offer 80% Upside Potential for the Long-Term Investors (June 29, 2011)
Microsoft: FED Fair Value = $40
Microsoft: FED+ Fair Value = $46
IBM Stocks Offer 20% Upside Potential for the Long-Term Investors (June 14, 2011)
IBM: FED Fair Value = $180
IBM: FED+ Fair Value = $198
Cisco Stocks Offer 50% Upside Potential for the Long-Term Investors (June 13, 2011)
Cisco: FED Fair Value = $15
Cisco: FED+ Fair Value = $23
Apple Stocks Offer 30% Upside Potential for the Long-Term Investors (June 12, 2011)
Apple: FED Fair Value = $363
Apple: FED+ Fair Value = $430
Intel Stocks Offer 60% Upside Potential for the Long-Term Investors (June 10, 2011)
Intel: FED Fair Value = $26
Intel: FED+ Fair Value = $34