InsiderFlow › Glossary › What is intrinsic value?
Intrinsic value is what a company is truly worth based on the cash flows it will generate: the number fundamental analysis tries to estimate.
The reference method is the DCF (discounted cash flow): you estimate future cash flows and discount them to today. The result is inevitably imprecise — it depends on assumptions — but it disciplines your thinking: it forces you to ask what must happen for today's price to be justified.
Buffett sums it up: "price is what you pay, value is what you get". When the market price sits far below estimated intrinsic value, you have a margin of safety.
On InsiderFlow these concepts come alive on real data: what big funds and insiders are buying, explained every day.
No: two analysts with different assumptions get different values. It's a reasoned estimate, not an exact measure.
Emotions, fads and short-term flows: those very divergences are where opportunities come from.