Book Value

Book value is a loosely used generic term referring to the accounting value of a business or operation. It is generally referred to as the net balance sheet value on a given date. This means assets less liabilities and less intangibles. Other variations of book value include carrying value, basis, and tangible book value.

Railroad Stocks – Analysis 02/15/2020

In addition, the price to book ratios are also higher than last quarter.  The key question for me and this fund is figuring out if there is value in any of the stocks.  To do this, I must fill out a table of various preferred ratios and then explain them in a write-up.  This way the reader will understand my reasoning as I write about it further

Railroad Stock Investments – The Standard of Measurement to Buy and Sell Railway Stock

The transportation sector of the United States economy is comprised of nine industrial groups. One particular group moves more volume of tonnage based on ton miles than any other form of transportation – Railroads. In accordance with the Federal Department of Transportation, railroads move 39.5% of all freight in the US (based on ton miles which is the length freight travels). It’s a $60 Billion industry with over 140,000 miles of track. It is dominated by seven major carriers (referred to as Class I Railways).

Value Investing

Value Investing

Value investing is a concept of buying and selling stocks based on business fundamentals and not as a reaction to news or market trends. It is a well accepted principle that often the market overreacts to news causing stocks to plummet in price or escalate in value. Value investors ignore this and use sound business fundamentals to trade stock. Much of historical wealth accumulation is based in value investments. There are no short-cuts or sudden actions taken by value investors. All decisions are derived by business analytics and trend lines.

EBITDA – Drawbacks

EBITDA

There are several business financial attributes required for EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) to work well as a basis for the multiple of earnings method (the method used with the Market Comparable Valuation Approach); see Fair Market Value for a better understanding of the three primary business valuation approaches.

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