Phil Town's Sticker Price

[physics]

My first post here, excellent resource!

I am getting a large difference in my calculation of the sticker price compared to the spreadsheet here and have noticed it is due to the Rule #1 Growth Rate.

I used the minimum of the median analyst's estimated 5 year EPS growth rate and the historical 5 year BVPS growth rate, while the spreadsheet uses the minimum of analyst's expectations and ANY of the historical equity growth rates, whether it be 9 year, 5 year, 3 year, or the TTM equity growth rate.

I know that the spreadsheet one is the most conservative, but does anyone know which would give me the most accurate value, my one or the spreadsheet? I realize that many others use a Graham or Buffett formula, but I do not have time time right now to really delve into more complex thinking, I am just looking for the more accurate formula of either of these or even a Graham/Buffett one. Thanks!

[tombrown1]

Phil says to use the lower between the analysts' 5-year average EPS growth rate and the 10-year equity growth rate. It is more art than science though. If the growth rate seems to be declining in recent years then you need to account for that. You're trying to predict what the company will be doing in 10 years - so use all criteria at your disposal to try and guess that number.

As for the spreadsheet - I don't think I've ever used one of the MOS numbers that it spits out - you almost always have to tweak the numbers to make more sense.

[golfz]

Since Phil provides his calculators for free and you can quickly do the approximate math in your noggin why bother with the MOS spreadsheet witch has proven less than reliable for so many and same in my hands as well? Just wonder if I am missing out on something.

[Gunnski]

Amen!!!!

[tombrown1]

I love the spreadsheet because it can give you a good overview of a company. If things look favorable then it's on to the manual spreadsheet to get all the numbers.