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<p>[QUOTE=&quot;risk_reward, post: 1989803, member: 12702&quot;]No, value investors choose companies where they disagree with the market value and believe that the market will eventually move more toward their perceived valuation.&nbsp; They do this in a variety of ways, none of these involve intrinsic value because value is never intrinsic. </p><p>&nbsp;</p><p>Some ways this is done:</p><p>Liquidation value - they attempt to estimate how much a company is worth if liquidated.&nbsp; This is just a sum of market values of pieces of the company, minus estimated losses incurred by breakup costs and value destroyed by the breakup process.&nbsp; So, this is a market value of the sum of parts. </p><p>&nbsp;</p><p>Cash flow or earnings analysis - the investor estimates future cash flows or earnings and then discounts them to present values.&nbsp; Of course, the value of cash flows is not intrinsic, it is an opinion based on the discount rate chosen. </p><p>&nbsp;</p><p>Comparative value analysis - They compare the company they are analyzing to similar companies and substitute their market value.[/QUOTE]</p><p><br /></p>

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