How Do You Determine The Value Of Alternative Energy Stocks?
Investing Daily defines value investing as distinguishing between a stock’s price and the underlying value; the price may fluctuate day-to-day, but the underlying value remains steady. Because the stock price doesn’t always reflect value, value investors look for stocks that are selling for less than a share in the company should really be worth. The challenge for the investor is determining the underlying value. That can be particularly difficult in a field such as alternative energy, where the companies and the technology aren’t as firmly established as, say, Standard Oil or Microsoft. Obtain the company’s annual report and check if the company had a net loss for the most recent year of operation. John Petersen, a corporate-finance attorney, says if a company’s net loss equals or exceeds its total revenue or its net worth, it’s a speculative investment, though that doesn’t mean the company isn’t a good value. Eliminate all goodwill and intangible assets to calculate the remaining “ne
