Inconsistent Intrinsic Value for the same company across multiple listings

Many companies have multiple listings and/or secondary listings to other countries. 

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Example of Apple's multiple exchange listings (primary listing is NASDAQ)

 

Occasionally our analysis of a company will differ across different exchanges. The most common confusion arises from the Intrinsic Value calculation.

Generally, even if the the stocks belongs to the same company, the issuance are distinctive. This basically means they are different shares. Logically if they aren't they should have exactly the same price and both stocks move whenever there's a trading activity on one market.

Here are three main data inputs that causes the variation of output:

  1. Risk Free Rate. This varies on each country and we base it on the 10-year government bond rate. Example, the risk free rate for a US listed shares is different from that of a UK listed shares or on any other markets. 
  2. Beta. It is a measure of volatility, or risk, in comparison to the market as a whole thus this may also vary on each country since the movement of each market may differ.

The two above affect the calculation of the Discount Rate that is applied to the future cash flow of a company. Learn more about our Discounted Cash Flow Model.

  1. Outstanding Shares. Since the listings are distinctive, each listings have their corresponding outstanding shares thus they only correspond to a portion of the calculated total value of a company.

When viewing a company report you can actually see the details of the calculations by simply clicking on the View Data available just below each of the visuals in the report.

 

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Sample screenshot showing link to View Data

 

 

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