Comparable analysis is an effective tool to value stocks and investments. This is a relative valuation method that compares current or projected financials and ratios against historical figures or those of peers in similar businesses. Essentially, this valuation method aims to determine where a company stands relative to peers, specifically whether its financials are more attractive than those of its peers. Or, whether it is trading cheaply based on historical financials.
This will be the first part of the series on comparable analysis, covering various scenarios and investing strategies investors can use to pick out undervalued stocks. The examples will be drawn from Singapore-listed companies to benefit domestic investors.
