What is Intrinsic Value?

June 29th, 2007

The value of a security, justified by factors such as assets, dividends, earnings, and management quality. Intrinsic value is at the core of fundamental analysis since it is used in an attempt to calculate the value of an ongoing business, and thus its proper stock price. Intrinsic value can vary widely among different analysts. Warren Buffett uses a method that involves discounting the future cash earnings of a business to current value (discounted cash flow).

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