No. of Recommendations: 10
Does anyone know where I can get a more reliable source that provides both short-term and long-term 3-5 year price estimates? While I know their algorithms aren't that good at actually estimating these out-year prices, it is a field I commonly use, and have not found another source that provides this sort of information.
You can get some interesting data from Ned Davis Research. One of the things they do (or at least did for many years, and probably still do) is check every firm with longevity to see which metric gives the best yardstick for mean reversion: cash flow per share, earnings per share, dividends, book, whatever. The ratio of current price to this "value line" (see the resemblance) gives a rational price expectation from valuation mean reversion. This is essentially what's behind the VL forecast method, including an extrapolation of the history of the value proxy. Alas, their service is prohibitively expensive. Still, I recommend signing up for a free trial, can't hurt. They also published a book, sadly now dated, which included as an appendix (IIRC) about a hundred pages of these charts, showing the best metric and average multiple of that metric for a lot of different firms.
They do a lot of the same sort of mean reversion analysis on sectors and other investments.
Personally I think Bank Credit Analyst is better for analysis and general insight, but if you like the mean revert and extrapolate styles, NDR is worth a look.
Jim
