METHODOLOGY FOR ASSESSING THE INTRINSIC VALUE OF OF INTERNATIONAL PUBLIC COMPANIES

Abstract

Introduction. The stock market is an integral part of any country's financial market which gives a market assessment of the value of public companies, allows to draw conclusions about the underestimation or overestimation of the value of companies, helps to understand the ups and downs of the market itself and the country's economy overall. It also can help for an investor who makes a successful analysis to profit from fluctuations in the stock prices of specific companies. In order to obtain profit from long-term capital investments, the investor must understand and be able to apply in practice the methods of assessing the intrinsic value of the company's shares. Purpose. The purpose of writing this article is to systematize and compare the methods of assessing the intrinsic value of a public company, as well as to analyze the possibilities and results of applying these methods based on the financial reports of semiconductor manufacturing companies shares of which are listed on the US Stock Exchange. Methods. During the study, both absolute and relative indicators of assessing the intrinsic value of companies were analyzed, the advantages and disadvantages of each group of indicators were given, and it was also determined whether the specified methods of assessing the intrinsic value of companies give similar results. Results. According to the results of the research, among 63 companies of the semiconductor industry, 20 were identified as the most undervalued compared to others. Thus, one can consider them as an attractive investment. A conclusion was made regarding the similarity of research results using different methods only for individual companies. Conclusion. Considering the difference in research results based on different methods of analysis, we concluded that a deeper study of each individual company is necessary which in turn will give us the opportunity to understand the reason for the discrepancies in the results. It is also crucial to find explanation whenever the particular result of given models strongly differs from the market value of a company. When making investment decision one must fully understand the potential risks as poor decisions can lead to losses.