How Much Should You Pay for a Great Company?

So you found a great company. How much is it worth? Here’s some basic principles and tools that can help you find out

Jocelyn Jovene 21 October, 2021 | 9:53AM
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Last week, we talked about what makes a ‘great company’. Great companies are those that you want to hold for the long run. But when investing in equities, fundamentals are not the only parameters to consider. It is critical to pay attention to valuation in order to reach investment success.

Figuring out how much is enough or too much when buying a security mostly relies on two factors – 1) The intrinsic value you estimate, and 2) The price the market offers.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Jocelyn Jovene

Jocelyn Jovene  is Senior Financial Analyst and Senior Editor for Morningstar France.