The DCF is the whole job.
A price is a number. A valuation is a story with cash flows attached. The point of this site is to build the second one and only publish where it disagrees loudly with the first.
01 Why DCF
Multiples are shortcuts to other people's DCFs. They embed growth, margin, reinvestment, and risk assumptions you never see. A discounted cash flow forces every assumption out into the open — and lets you argue with each one individually. That's the whole point. If you can't write down the cash story, you don't have a view, you have a feeling.
02 The frame
Ten years of explicit growth, fading toward the risk-free rate in a terminal year. Operating margin converges from current to a competitive long-run anchor. Reinvestment is governed by a sales-to-capital ratio, not a free lunch. Cost of capital comes from a bottom-up unlevered beta plus country-mix equity-risk premiums and a market debt cost. Equity bridge subtracts net debt, minority interests, lease obligations, and option overhang at fair value. Every number is auditable. Every number can be argued.
03 Why small caps
The next informed opinion has to move the price. Megacaps have thirty analysts and a Bloomberg consensus tight to a dollar. Small and mid caps have zero to two — and the gaps live there. The screener is deliberately coarse: trailing P/E under thirty, PEG under one, positive earnings, reasonable leverage. Coarse on purpose. The work is the DCF, not the filter.
04 What I don't do
No short-term trading. Time horizon is three to five
years.
No technicals. Charts describe history, not value.
No options or leverage. If a thesis needs gearing to work,
the thesis is wrong.
No sell-side targets. Other people's price targets are a bias
to be aware of, not an input.
05 What you actually get
Each published valuation includes the verdict, price target, margin of safety, ten-year forecast, sensitivity grid, Monte Carlo distribution, and the full bull/bear case. Worked example: