| Value investing is an investment philosophy and method which stems from thestock market investment practices of the Western countries, and investment value liesthe intrinsic value,on which investment theory is built.This is the only criterion tojudge the value of investment. With the gradual development and maturity of thesecurities market in China, the concept of value investing gradually enter the field ofvision of our investors, but the time of this concept enter our country is short, and italso has a lot of challenge and controversy. Therefore, the development of the valueof the investment philosophy in our country in the twists and turns ahead. Manydoubts and controversies sound investment entity of China’s securities market,namely small and medium investors, can not understanding the contents of theconcept of value investing clearly and comprehensively, what’s more,they do notknow how to estimate the stock in our stock market by using value investmentphilosophy intrinsic value.Due to the special nature of China’s securities market, many valuation modelswhich have long-term use in foreign countries can not be applied in China. Such asthe dividend discount model. There are less listed companies pay dividends, which isvery little, every year in China.Thus it is not suitable to use the dividend discountmodel to estimate the intrinsic value of the stock. Furthermore, the use of a series ofclassic model is very complex,so it needs more solid financial knowledge.Therefore,general-ly speaking, China’s small and medium-sized investors can not use some theoreticalmodels to estimate the intrinsic value of the stock well.Based on this analysis,this paper screens shares with investment value in China’s Ashare market during2003-2011according to the value investing philosophy, and thestock selection criteria, and test screening seven financial indicators which havehigher correlation with stock prices by Pearson.Then establishing a multipleregression model, and conducting multiple linear regression for seven financialindicators and the company’s year-end closing stock price of sample companies withSPSS stepwise regression method,and drawing the regressing results in every year. At last,establishing an estimation model of the intrinsic value of the stock value,which isin line with China’s securities market and also can provide reference for small andmedium investors, by merger the samples in each year and using the same regressionmethod, draw: the intrinsic of stock=0.387+0.968*net asset per share+3.844*earnings per share+0.577*Retained earnings per share. Through empirical analysis,this paper draws the following conclusions: the company’s fundamental factorsexplain stock price more strong, China’s stock market is developing and becomingspecification generally, the value of the shares of stock is also influenced by otherfactors in addition to the fundamental factors,China’s stock market has yet to befurther specification, development and improvement.This paper introduces the the article research background, significance andresearch status in domestic and foreign countries firstly;then conducting theoreticalexplanations and comparative analysis to several classic valuation methods,on thebasis of reviewing the theory and methods at home and abroad about estimating theintrinsic value of the company, including dividend discount model,discounted cashflow model,economic value added model,and market rate model,book valuemodel,sales ratio model in relative valuation method;then conducting empiricalanalysis to the2003-2011Shanghai A-share sample; in the following,establishingvaluation model of the intrinsic value of the listed company;finally, drawing theconclusion and limitations in this paper. |
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