Fundamental Analysis & Valuation
2 terms
Margin of Safety
Fundamental Analysis & Valuation
%
The discount between the price paid for a security and the analyst's estimate of its intrinsic value.
Margin of Safety = (Estimated Intrinsic Value - Market Price) / Estimated Intrinsic Value x 100
Moat
Fundamental Analysis & Valuation
qualitative
A durable structural advantage that lets a company earn returns above its cost of capital for many years without being competed away.
Test: returns on capital stay above the cost of capital across a full cycle, and the reason can be named as a specific barrier