In Volume 1 of our new “Investing 101” podcast series, 7investing lead advisors Matt Cochrane and Austin Lieberman discuss some common investing terminology and the things they think about when valuing stocks.

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During this episode we discuss:

• Why we don’t value stocks by the price of the stock
• Why we don’t look for stocks that are down a high percentage from their highs
• How to find and asses Price to Earnings (PE) Ratio (GAAP, Non-GAAP, Forward PE), When/Why you should use GAAP or Non-GAAP numbers
• Example of finding Walmart’s PE ratio
• Price to Sales Ratio (PS) definition and example finding Walmart’s PS ratio.
• Price to Book Ratio (PB)
• Discounted Cash Flow (DCF) and why Matt and I don’t use them much in our investing process.

Definitions and examples provided in this episode:

• Market Cap
• Price to Earnings Ratio (PE) (GAAP, Non-GAAP, Forward PE), When/Why you should use GAAP or Non-GAAP numbers
• Price to Sales Ratio (PS)
• Price to Book Ratio (PB)
• Discounted Cash Flow (DCF)
• Gross Margin
• Operating Margin
• Dollar-Based Net Expansion Rate (DBNER)

This episode was originally recorded on April 13, 2020 and was first published on April 16, 2020.

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