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Worked valuations

Theory matters profoundly, but application matters more. This chapter presents twenty real companies valued end to end using all the frameworks from earlier chapters. You will see how to weave together industry analysis, business model assessment, profitability metrics, balance sheet quality, and management evaluation into a coherent valuation thesis. Each case study shows not just the final calculated answer, but the reasoning behind it, the tradeoffs between different assumptions, and the key drivers that move value. You will see where reasonable analysts might disagree, how to handle inherent uncertainty, and how to make a call when information is incomplete and complexity is irreducible.

The companies span multiple sectors and business types: diversified industrials (3M), technology titans (Apple, Microsoft), consumer staples (Costco), financials (JPMorgan), consumer discretionary (Nike, Disney), healthcare (CVS), energy (Exxon), and capital-intensive infrastructure (Union Pacific). Each industry and company type poses different analytical challenges. Technology companies require you to forecast competitive advantage, moat durability, and existential disruption risk—the historical numbers are almost secondary because the future is so different. Financials require you to model capital efficiency, credit losses, and regulatory constraints. Mature companies require you to distinguish between true intrinsic value and value that sophisticated institutional investors have already priced in correctly. Growth companies require you to trade the comfort of precise forecasting for optionality—betting that the business will compound faster than your conservative base case.

These case studies are not prescriptive or "the right answer" for each company on the day this book was published. Markets change, new information arrives, and valuations shift. Rather, they show a process: how to gather evidence systematically, how to question your own assumptions rigorously, how to synthesize diverse and sometimes contradictory data into a single valuation, and crucially, how to communicate your reasoning clearly so others can stress-test your logic and assumptions. After reviewing these end-to-end analyses, you will understand how fundamental analysis works in practice: not as a mechanical formula, but as a disciplined process of reasoning about business economics under conditions of uncertainty.

From financial statements to conviction​

Each case study begins with the financial statements and moves through industry analysis, business model assessment, and competitive positioning. You will see how to move from data to insight, and from insight to a defensible valuation. The goal is not to memorize the valuations, but to see the process in action and develop the pattern recognition that allows you to analyze companies independently.

Recognizing your edge and its limits​

These case studies show that some valuations are clearer than others. A mature utility with predictable cash flows can be valued with confidence. A young technology company with uncertain futures is harder to value. Part of good investing is recognizing which situations you can analyze with confidence and which exceed the boundaries of your competence. This chapter teaches you to develop circle-of-competence thinking and to avoid analyzing companies in domains you do not understand.

Articles in this chapter​