The speaker, Pranjal, introduces a new series called "Curfew Classes," where he will teach fundamental analysis of stocks through practical screen recordings. He uses Hindustan Unilever Limited as an example for the first class.
He explains the concept of Market Capitalization (Market Cap), which is the total value of a company's outstanding shares of stock. He calculates the Market Cap for Hindustan Unilever by multiplying the share price by the number of shares.
Next, he introduces the concept of Price to Earning (PE) ratio. He explains how to calculate the PE ratio by dividing the share price by the earnings per share (EPS). He uses Hindustan Unilever's EPS and share price to calculate its PE ratio.
Pranjal then discusses the company's profit growth over the past 1, 3, and 5 years. He compares the company's current PE ratio with its historical PE ratios to determine whether the company is overvalued or undervalued.
He uses Colgate as an example to illustrate how to compare a company's current PE ratio with its historical PE ratios and profit growth. He notes that even though Colgate has a lower PE ratio than its historical average, its profit growth is not as high as its historical average, which raises concerns about the company's valuation.
Pranjal concludes by emphasizing that understanding market cap and PE ratio can help investors make informed decisions about where to invest their money. He encourages viewers to join his Academy of Value Investing for more in-depth learning and offers a model portfolio service called Idea Back for those interested in tracking his stock recommendations.
1. The video is a part of "Curfew Classes" hosted by Pranjal.
2. The purpose of these classes is to teach fundamental analysis of stocks.
3. The video introduces a new tool called "ticker" from finology.in for stock analysis.
4. The instructor will release a new video every 20 days, starting with simple concepts and gradually progressing to more complex ideas.
5. The first company being analyzed is Hindustan Unilever Limited, India's largest FMCG company.
6. The market cap of Hindustan Unilever is around Rs-4.5 lakh crore.
7. The market cap is calculated by multiplying the share price by the number of shares.
8. The video introduces the concept of PE (Price to Earning) ratio.
9. To understand the PE ratio, the video first explains the concept of Earning Per Share (EPS).
10. In Hindustan Unilever's case, the EPS is around Rs-28.
11. The PE ratio for Hindustan Unilever is 70.
12. The video compares the current PE ratio of Hindustan Unilever with its historical PE ratio.
13. The video introduces the concept of comparing PE ratio with the company's profit growth history.
14. The video also introduces Colgate as an example company for comparison.
15. The video emphasizes that just looking at the PE ratio is not enough for investment decisions.
16. The video also introduces the concept of comparing market cap across industries for investment decisions.
17. The video ends with a call to join the Academy of Value Investing for more detailed lessons.