a particular method which helps value a company.
That's quite a difficult issue and probably very difficult to put a value on a company.
Just take CLL before the crisis started the market puts a value around 5 with oil at a decent level by then and production almost at full speed.
But some events and thereafter some decissions ,i.e. financing deal etc. all of the sudden turned the value much lower then first thought.
Other examples of value .
Enron and up here one of our greatest banks Fortis just collapsed due to fraud ,high risk investments etc.No one probably could ever imagine they should dispappear.
For CLL it's a difficult thing because besides their oil sands activity they also have MRC and Luke and a little conventional .
Those who followed CLL and sold in 2008 could pick up same amount of shares at a five times lower price and have the rest of the money in the pocket as pure profits.
I've been in hundreds of stocks during my more then 20 years of shares investments and though I traded manytimes my mistakes I made was holding on in companies which everybody was assure they should go higher.Lucky for me I also sold but those who stayed have lost money because of bankrupty or facing much lower price then when they bought in the early stage of the stock.
Putting a value on a small cap stock is very difficult and depends from which angle you look at it.Probably in your calculation of value /fb the wti price is the most important trigger.When you see how oil can fluctuate a value compared at wti 40 or at 80 a few months later can give a much brighter picture in just a few months.
Trough my stock carreer I knew one thing.No matter how you calculate stocks they can swing up and down or change in value due to some factors .Compared to big companies small ones have no track record of earnings etc.and can swing heavily up and down because of their risk profile.
So IMO besides trying to calculate the vaue etc.. the most important is to look at the chart .So buying when a stock is on it's way to reach his previous top .So my advise is if you would buy a stock then first take a look to his chart and then make a decission.
Same with funds.Many people go to their banks and they asked for some funds to invest but they don't look at he chart or even ask what the risk are etc.In 2008 I sold all my pension stock related funds and switched to bonds.Now I have still a huge profit on these products while some of my workmates who didn't follow up face more then 20 % loss.All products related to stock markets need a decent follow up and if thing become looking badly then sell and take profits.That's the only way to make money.
