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Price-Earnings-Ratio (PER) is a simple and familiar method of valuing a stock among investors. However, there are many other ways to value a stock that can be quite complicated and require a technical expertise. It’s impossible to say that any one method is better than others. Therefore, it’s common for analysts to use several valuation methods and come up with different fair values.

Recently, the Economic Valued Added method has gained attention worldwide. This method is intuitively appealing and measures profitability in the way shareholders define it.

Economic Value Added calculates the actual dollar amount of a business’s wealth created or destroyed in each reporting period. It takes into account the opportunity cost (the minimum acceptable compensation for investing in a risky asset as opposed to a less risky market instrument like government bonds) of the company’s capital investment and measures the excess returns over this charge.

A positive Economic Value Added indicates that value is being created; so adding to the intrinsic value of the company by that amount. A negative Economic Value Added, on the other hand, indicates that value is eroded and the company is now worth less than the initial capital employed.

There are eight steps involve in applying Economic Value Added to value a company:

Step 1: Determining a period of financial projection. To calculate returns on capital employed, we first need to estimate the company’s earnings; for instance, in the next five years to 2011. The earnings projection is based on a set of assumptions for future volume sales growth, finished product prices, government duties and inflation.

Step 2: Net operating profit after tax (Nopat) Net operating profit after tax is equivalent to the after tax earnings generated by the company (excluding interest expense). The financing of asset (interest expense) is assumed to be independent of operating results and is instead reflected in the company’s cost of capital.

Step 3: Initial capital employed The total capital employed at the beginning of each year is the assets base from which earnings for the year are generated.

Capital employed = Net fixed assets + Working capital

Step 4: Return on capital employed (ROCE) The yearly returns on capital employed are determined by dividing Nopat by capital employed at the beginning of each year.

ROCE = Nopat ÷ Capital employed

Step 5: Weighted average cost of capital (WACC) After calculating the Returns On Investment (ROI), match them to the cost of capital. The most commonly used cost of capital is the WACC, which is based on the company’s debt equity capital structure.

WACC = Weighted cost of equity + Weighted after tax cost of debt

After tax cost of debt = [Interest payment x (1-tax rate)] ÷ Total borrowings

How big a risk premium required for investing in a company is dependent on how risky the stock is relative to the broad market; which known as correlation beta. A high beta implies the stock price is more volatile than the broad market. Therefore, an investor should require a higher than market average return to compensate for the additional risks.

Conversely, a low beta implies that the stock returns will lag a market rally but will be more resilient during a sell down.

Step 6: Excess returns over cost of capital

Excess returns (ER) = ROCE – WACC

Step 7: Economic Value Added and Market Value Added (MVA)

Economic Value Added = ER x Capital employed

Beyond the projected period of 2011, you impute a terminal value (perpetuity); on the basis that the company is an ongoing business concern (for the stream of future Economic Value Added, assuming a constant yearly growth of 1%).

The stream of Economic Value Added is then discounted back to present day values using the WACC calculated previously, the sum of which is the positive value created by the company’s business operations.

MVA = Sum of present value of Economic Value Added stream.

Step 8: Intrinsic value and shareholder value The intrinsic value for the company is its initial capital employed enhanced by the positive value created.

Intrinsic market value = Initial capital employed + MVA

And finally,

Shareholder value = Intrinsic market value – Net debt

Fair value per share = Shareholders’ value ÷ Number of shares

The company’s primary objective would be to maximize Economic Value Added; which is not necessarily the same as maximizing profits. If the return on an investment is below its cost of capital, then the company prefers not to make the investment at all (even if the absolute magnitude of profit is increased).

Michael Russell
Your Independent guide to Investing

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Valencia, Spain’s third largest city, is an ideal place for a holiday apartment rental in Spain. Valencia is both a coastal city and a province and is a wonderful mixture of ancient history and the ultra-modern. Recently it has become one of the popular places in Europe to book a stylish, long-weekend holiday letting in Spain. Shorter breaks are increasingly popular in fashionable cities like Valencia, but there is still a market for holiday villas in Spain rental as some people like to take advantage of the delights of the city as well as spending some time on the beach.

Valencia City is an ancient seaport and the city has been recently modernized and now has some stunning modern architecture. Many people book a holiday apartment rental in Spain here to enjoy the typically Mediterranean climate with hot summers and mild winters. Others book their holiday letting in Spain here because it is a vibrant city with a wide range of cultural experiences on offer. There are theatres, cinemas, museums and entertainment venues. The nightlife is very lively and often carries on until the early hours of the morning.

How do you get about in Valencia if you have booked your holiday apartment rental Spain here? An easy way to travel around the city is on the tram which covers the city and also takes you out to the nearby beaches. An increasingly popular way of getting around the city is by bicycle. ‘Cyclotourism’ is a different way to explore the city and as Valencia is totally flat and there are cycle paths on most roads, it is a fairly easy way to get around. If you want to do a bit of sightseeing a bus tour will cover all the major attractions and costs as little as 12EUR. You can hop on and off the open-topped buses to explore the sites in your own time.

For those tourists visiting Valencia and staying in holiday villas in Spain or a holiday apartment rental in Spain the cheapest way to travel is using a Valencia Tourist Card. This is a combined card offering free Public Transport (zone A) and discounts in museums, shops and restaurants and for some leisure activities. You can buy cards which are valid 1, 2 or 3 days. When you board a bus all you have to do is slot the card into a machine next to the driver. The card is then automatically validated for your first journey. Tickets can be purchased from kiosks and tobacconists or at Valencia metro station for a combined metro/city bus pass.

So if you have booked your holiday apartment rental Spain in Valencia what is there to see in the city? The old quarter contains many riches from the city’s historic past including one of Spain’s largest and oldest Cathedrals and a magnificent bullring. Other places worth visiting are the City of Arts and Science complex, the Botanical Gardens and the Lladro Porcelain factory where you can visit the ceramic museum and the factory shop. For those who want a bit of retail therapy before they return to their holiday letting in Spain, there are plenty of fashionable shops in the centre.

Another good reason why people book a holiday apartment rental Spain or luxury holiday villas in Spain in Valencia is to take advantage of the nearby beaches. Las Arenas and La Malvarrosa beaches blend into each other and form the city beach of Valencia. Both can be reached from the centre of town by bus in under half an hour or by tram from Pont de Fusta in about 10 minutes. In the height of the summer holiday season the city beaches are very crowded and you should head for beaches to the south of the city such as Pinedo and El Saler.

If you want a stylish weekend getaway choose a holiday letting in Spain in Valencia City. Valencia is a fantastic place to book holiday villas in Spain for a short break. You can book a holiday apartment rental in Spain direct, with the private owners. Clive Long, the author, is a Director of the Holiday-Villa-Select website which offers cost effective holiday rentals in Spain booked direct with owners who advertise their holiday villa or apartment on this website no commission charged.

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Buying a house in the Sarasota area is similar to purchasing a home anywhere else in the country. You have to go through the same process of checking out a variety of residential properties and eventually settling on your best choice. Apart from that, you have to take care of a number of things first before embarking on an active home search in the Sarasota real estate market.

Determine Your Credit Worthiness And Get Pre-approved

Before you could start looking into different prospective houses in the Sarasota real estate market, you need to see to it that you have enough financial backing to fund the acquisition of a residential property. Make an effort to pore over your credit report prior to approaching a lender. It is common to come across a number of hitches with credit statements, especially if your last name is common.

After you’ve gone over your credit report and as soon as you’ve settled any problems, you may then get pre-approved. You may accomplish this by taking the necessary steps to get hold of a letter from your lender testifying that you are indeed “pre-approved” for a mortgage within a certain price range.

It is imperative that you obtain the letter prior to making a contract offer for the purchase a Sarasota real estate property. Once you’ve been pre-approved, you’d therefore know the specific price range of houses you ought to be taking a look at.

Establish The Features You Need Or Want In A House

Talk to your real estate agent and put together a “needs and wants” list. Armed with an idea of your specific price range, he or she may competently ascertain in which neighborhoods to start looking for your ideal Sarasota real estate property. This way, your home search will only be limited to properties you can actually afford to buy. There’s really no sense in squandering your time in areas that are beyond your price range.

Take A Look At The Houses

Equipped with a list of Sarasota real estate properties you can afford to purchase, schedule at least a day to do a drive-by so as to check out the houses and their adjacent neighborhoods. After that, meet up with your real estate agent to inspect the interior of the ones that have caught your attention.

As soon as you have narrowed down your choices to only a few houses, it is vital that you try to visit them at different periods of the day. You may pop in during the morning or afternoon rush hour. This way, you will be able to find out whether the road in front of the house is utilized as a thoroughfare or as a short cut.

To check out the neighborhood at nighttime, you may return after dark and stroll around the block for a while. Try to observe if the headlights from approaching cars flash into the house, or if sounds from a nearby park or pub are perceptible.

After viewing several homes, you may want to look over some for a second time. This is the point wherein you need to obtain measurements, ask a lot of pertinent questions, and basically take a closer look at the Sarasota real estate properties. Keep in mind that these are necessary steps prior to the actual purchase of your dream home.

http://siestakeyrealestate.com — Sarasota Real Estate

Vanessa A. Doctor from Jump2Top – SEO Company

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You see commercials out there that ask you what you would do if this happened to you. You see someone leaving their car door open in traffic, then another car comes racing by and runs right through that door. Or the one where a guy tries to hide a ring in pile of dishes, it falls into the garbage disposal and his fiancé turns the garbage disposal on. We all chuckle and laugh because that kind of stuff actually happens to people in real life. So when you are looking for a room to place your belongings, you should consider what you do if something happened to your belongings while storing them. For reasons beyond our control, most rental facilities have some type of self storage insurance.

Most times, almost everything that you possess, you have some type of coverage on. Whether it is your car or your house, you ensure that you have your possessions covered in those just in case moments. How unfortunate is it to get a phone call one day and you are told that all of your belongings were stolen or burned in a fire and you realize you do not have coverage on those items? It is sure that you would not be the happiest person in the world at the time. No one wants to be caught off guard and have to pay a lot of money out of their own pockets to pay to recover the costs of their lost items. As you can see, having your belongings covered is important to your sanity and your everyday peace of mind.

So when you are out looking for a place to store your belongings, self storage insurance should be something to ask about. Sometimes people put things from the garage or other items in their store room that they do not particularly care about. That is why we put them into a rental unit because we do not want it cluttering our house. On the other side of that, sometimes we need to store things such as our whole house when we are transitioning from home to home. This is good reason why self storage insurance is a great idea to make sure that if anything does happen while your belongings are being stored, they will be covered.

When you are looking for or being offered self storage insurance, it is very important what type of coverage you have. Sometimes your regular rental coverage that some people have when they are renting their apartments can take care of anything that can happens while storing. So make sure that you ask questions to have that piece of mind that you know if the worst happens, you are covered. Self storage insurance can cover all types of situations like burglary, fire, wind damage, earthquake, etc. There are many situations where you need some type of coverage on your belongings. Make sure you make the right decision concerning what you are storing.

The moral of this story is that you need to take the necessary thoughts to see if how you would like to have peace of mind. Sometimes you might have some kind of deductible or some deposit. You can find coverage out there in many different forms and from different companies. Take some time to do some research and see what coverage and company will do the best for your lifestyle and needs.

Self Storage

Self Storage Owners Blog

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Forget about the guys and gals in skimpy bathing suits on the beaches, go on an outdoor adventure vacation and feel alive. Here are 5 suggestions for adventure vacations

1 Camping and canoeing in Algonquin Park Interior. Summer and winter adventures.

Algonquin is within a few hours driving distance from Toronto. Leave on a Friday afternoon and drive north, take the canoe and camp on a site of one of the lakes closer to the highway. You’ll be able to make camp before darkness. Spend all weekend canoeing on the lakes or hiking through the woods, and go back home on Sunday afternoon. If you have more time, go deeper into the interior by taking one of the more northerly routes across the bigger lakes. Spend a week or two away from people, enjoy the peace and tranquility. When you come back out of the interior you will notice that nothing changed while you were away, except you.

2 Snow shoeing and snowmobiling, winter adventure

Go Snow shoeing or take a snowmobile on one of the 30 thousand miles of trail throughout Ontario. Get a group of friends together and travel from lodge to lodge. Spend your evenings with good food and drinks, and in the good company of the locals.

3 Dog sledding and skijoring, winter adventure

Go on a dog sledding vacation and learn how to be a musher. If you don’t have access to all the dogs and equipment, go skijoring. All you need is a couple of dogs and minimal equipment. Competitions are organized with races ranging from 3 to 50 miles. This is one of the fastest growing sports and you can do it anywhere. Ontario has thousands of snow mobile trails, perfect for skijoring. Check to make sure dogs are allowed on the trails you intend to travel.

4 White water rafting, summer adventure

Experience Ontario’s waters as a canoeist, a kayaker, or a rafter. Make sure you bring your scuba diving equipment along to check out the underwater scenery. Early spring when the snow melts, the water will rush down small, normally quiet streams and give you a chance to do some white water kayaking or canoeing in areas where you normally have to portage during summer. For the more daring you can enjoy the high tempo ride of rapids and whitewater thrills on the Ottawa River.

5 Mountain biking, summer adventure

Visit the Haliburton Wilflife and Nature Reserve and bike through the 60 thousand acres of private forest. If having both wheels on the ground does not excite you, travel to Calabogie. Challenge the heart-pumping downhill mountain biking trails for pure excitement. Take the chair lift to the top of the Dicksons Mountain. Then thrill with a descent of 760 feet on your mountain bike.

You can find more information on vacationing in Ontario at www.the-happy-immigrant.com

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Renting to tenants is no longer “where the money is” for real estate investing. I became a multi-millionaire landlord in the 1980s by buying $10 million in rental houses. Yet, I consider this real estate investing approach the biggest mistake in my real estate investing career. I call it my “$10 Million Mistake.”

Back then, real estate investing in rentals was buying a house, renting it to tenants for a rental fee that covered the mortgage, and waiting for an increase in value. Interest rates were as high as 25%. Inflation was rampant. You could buy a house, and it would almost double in value in 10 or so years.

Boy, have things changed in real estate investing! Interest rates have recently been the lowest in 46 years. Inflation is flat. The same rental house in some areas is appraising for less today than it appraised three years ago. The major profit to real estate investing in rentals is the pay-down of the mortgage by the tenant. Otherwise, profit comes from the difference between the rental fee and the mortgage payment.

One month vacancy per year, which is not uncommon, might convert into an annual investment loss, even if (1) tenants don’t leave owing rent, (2) the property is not damaged, or (3) repair cost is negligible. All of these possibilities are very unlikely.

One month vacancy per year can eliminate usage profit for the year. Spend your time on fix up repairs, even part time, and you go more in the hole. How much you lose depends on how much your time is worth.

Real estate investing is intended to be profitable. Vacancies, repairs, and time expenditure might mean you are only making a donation to the great cause of improving the nation’s housing.

The scenario changes if the mortgage is negligible and note payments are significantly less than rents. But the beginning investor does not often create this situation.

Fixing up properties for resale is a better venue for real estate investing today. Go a step beyond the norm, and learn how to help a renter get financing for your fixed up house. Go another step by converting a junker into a “Dream House,” and you will attract prospects to your property like bees to honey. Turning a “Plain Jane” into a “Doll House” demands extra work, but attracts better quality buyers. Real estate investing is extremely profitable, but your choice of real estate investing venue is critical to optimal profitability.

Phil Speer, Ph.D., started his real estate investing career 25 years ago. Without the availability of credit and using only a $10 bill, he purchased $1 million in properties in his first year, and had accumulated $10 million in properties by his fourth year. He was featured in a Wall St.Journal editorial as most successful investor in the Nothing Down Real Estate Movement, and was honored with a Caribbean cruise as top investor of the year. In his hometown of Nashville, Tennessee, he has been a businessman and Human Resources Consultant for 30 years. He is an author, speaker and seminar director. To learn how to profit in real estate investing, even without cash or credit, read his report at http://www.CashinHouses.com/. Subscription is free to his Fix-up Ezine. He and other contributing authors provide free articles and resources on real estate investing at his online “Academy of Advanced Real Estate Investing Techniques” – http://www.AAREIT.com/.

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Discount! Flat Fee! Sounds like a good deal, right? Well, maybe not when it comes to selling your home. Yes, a discount real estate agent can save you money, but will he sell your house? There are many reasons why you may want to avoid going to the discount route.

First of all, the selling tactics of a discount representative can be well… somewhat lacking. Not always, but you will often have to do your own marketing and advertising. A flat fee broker will charge you an up-front fee. For this, you may get your home listed on an MLS site, which may be viewed only by a limited audience, because of listing regulations. That may be the extent of the marketing. Some companies purposely omit MLS sites from the marketing, because if another agent gets involved, the commission has to be shared. This eliminates a lot of prospective buyers for your home. Other companies may put up a sign in the yard, advertise in the paper and magazines, and work with contract negotiations. Because the companies vary so widely on the services they offer, you really have to do your homework to make sure you get what you need. Some discounters offer a price list of services they offer.

Now, if you hire a traditional real estate agent, you pay nothing up front. Yes, you will sign a contract with him, but he makes no money until he sells your home or, if for some reason, you default on the contract (which does have an expiration date). And, this is good motivation to get your house sold. Traditional agents and firms offer a variety of marketing tools for the seller. They will get the home into the local trade magazines, hold open houses, print MLS sheets, place the home on the Internet at local and national sites and some areas even have local television programs. Many will even come in, and stage your home for you or at least give you a list of things to do, to help get the house sold. You get all this and you haven’t paid a penny for it.

Hmmm. sounds like a lot of work right? Do you really want to do that yourself? Yes, a traditional representative makes about 6% commission which he usually splits with the buying agent. That is a lot of money, especially, in making the houses more expensive. But, what if you have a hard time selling the home yourself or through a discount firm? Every month it doesn’t sell, costs you money anyway. Traditional agents will often set a time frame within which they must sell your house. If they do not, you are free to seek a different broker and you are not out any money for the attempt.

Now, there are ways to save money and still use the traditional method of selling. There are many ways to negotiate down the commission fee. For example, if your agent happens to bring you a buyer, he will usually knock a percent or two off the commission. Or, if you agree to sell and buy with him, he will reduce the rates for the repeat business. Talk with him and see what he is willing to do for you.

This is not to say that all discounters are the same and that you will not get a great service from them, just a caution of what to expect. If you still decide to opt for the discount route, be sure to get everything in writing- fees, services, etc. However, your best bet is to hire someone who really wants to get your house sold. Discounters are concerned with the quantity of clients to off-set the discounts. Traditional real estate agents focus on quality and getting a sold sign in your yard. Do not sacrifice quality work for savings. The old adage is true: Sometimes you do get what you pay for. And that’s not necessarily a good thing!

Discount real estate agent may not give the deal that you wanted. You may have to sacrifice services for money. Contact professional and traditional Asheville NC real estate agents for best negotiation. Visit Preferred Real Estate Center http://www.preferredrealestatecenter.com for details.

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Maverick Investors specialise in seeking out non-standard, little-known investment routes. They don’t believe that investment is necessarily ‘difficult’, or that it should be left entirely in the hands of ‘experts’. Experts have their place, of course, but the investment industry wants you to believe that they are vital, and your only route to smart investment strategies.

That simply isn’t true.

Let’s take a look at a couple of examples of what a Maverick Investor might be doing, even as you read this article.

Example 1 - Covered Call Options. It would take too long to explain this in depth, but it’s a bit like renting out the stock you own for a monthly income. Is it safe? Well, it’s allowed within your 401k, so the US government certainly think it is! Does it require huge expertise? No! You need to know how to do it, of course, but you can learn that in a day. From then on, it’ll take you two or three hours a month to implement. Is it worth it? Well, that depends on your criteria. However, you can safely expect to make a return of between 3% and 6% a month if done correctly – and that’s way more than any bank or brokerage house will offer you!

Example 2 – Online Businesses. If you’ve ever tried (or are trying right now) to find a way to make money online, you’ll probably know it to be a frustrating, time-consuming, and ultimately fruitless task. And yet, and yet….there are some people out there who are making consistent fortunes on the Internet, day in, day out, without working that hard for it. In fact, I know a guy who is consistently making $100,000 a month in what he would class as a largely passive income, i.e. he does very little, if anything, to ‘earn’ it. So, what’s the difference between him and you (apart from that income figure!)? The difference is, he has a largely automated system, and a way of thinking strategically, that puts him streets ahead. That’s the bad news. The good news is, he’ll teach you all he knows, and he won’t charge you a fortune for it!

Example 3 – Volatility Trading. The biggest stock market myth is the idea that some people can consistently predict the direction of a given market or stock with a high degree of accuracy over an extended period of time – years, say. It’s not true. Nobody has that ability. However, what if you had a technique where you could a) predict which stocks are due for a large move, b) predict, with some accuracy (a matter of days), when this large move is likely to take place and c) position yourself in the market so you would make money on that move regardless of which direction the move took. Wouldn’t that transform your investment performance in the stock market? Well, there is such a technique, and it’s there for the taking.

Example 4 – Below Market Value Real Estate. In the realm of real estate investing, what sort of a difference would it make if you could consistently buy property without using any of your own money, and instantly turn those properties into money-generating cash cows? How many would you need in order to give up your job and be a full-time Maverick Investor? Not many, let me tell you! And yet there are no real estate brokers out there who will show you how to buy houses and apartments 10%, 20%, 30% and more below their retail value. I wonder why?

Now, there’s way too much hype around on the Internet for me to want to add to it in any way at all. So let’s just back off a little way and put some of the above examples together in a very conservative ‘what if’ scenario.

What if you already have a $50,000 stock portfolio – by implementing a covered call strategy, you could be making 3% a month on that, giving you an income of $1,500 a month for a couple of hours work, and leave your portfolio largely untouched. And what if you were able to plug into an online business system that is generating one man $100,000 a month, and what if it ‘only’ made you 1% of that – that’s still another $1,000 a month in largely passive income.

Using just two of the four examples above, and taking super-conservative estimates, you’re already up to $2,500 a month for very little extra effort.

This is the power of the Maverick Investor! Find out more about these and other Maverick Investor strategies at www.maverick-investor.com [http://www.maverick-investor.com]

Rob Best is a writer, researcher and Maverick Investor who is one of the people behind…

[http://www.maverick-investor.com] – Helping You to Choose Financial FREEDOM!

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In order to keep vehicles in top operating conditions the vehicle owners prefer to purchase the automotive warranty services. This is because the warranty facilities help in providing repair facility to vehicle owners thereby greatly helping them. Automotive warranty services are provided by a number of companies. These providers not only provide warranty from the regional services but also on worldwide basis. The best thing about these service providers is that they provide warranties along with a number of offers at an affordable cost.

In this present world there is no dearth of automotive warranty services but it is extremely important to choose the right type of warranty program which would suit both your vehicle and financial needs. Only after taking adequate information on these warranty services you should go ahead as the terms and conditions of these warranties greatly differ from each other. There are some useful tips following which people should choose an automotive warranty.

The first thing is to check whether the automotive warranty service provider is well experienced or not. They should have a long experience in the auto industry and whether the products provided by them are fully insured or not. The warranty provider should also be registered with the local government which would prove their authenticity.

If you zero on any service provider seems you should also get the quotes and details of the contract provided by them which should be compared with the quotes of other companies to be able to choose the best warranty. Your aim should be to get the best service provider for the profitable offers provided by these companies can greatly help you. Once you start profiting from their offers you can even think of renewing the contract. There are many online service providers who offer services at an affordable cost.

Shelby is an auto warranty expert who tries to connect vehicle owners with the best & most reliable extended auto warranty services on the internet. You can read more about how to find the best extended auto warranties here http://www.myautowarranty.info/choose-the-best-automotive-warranty-services

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