Category: Money tips Release Date: 2006-07-28
In 1965, the Nobel laureate economist James Tobin (Tobin) made the famous Tobin's Q index, that stock market prices of its replacement cost of capital ratio. Tobin's Q value is commonly used in the calculation formula: Tobin Q = (MVE + PS + DEBT) / TA, where: MVE is the market value of the company's circulation, PS for the value of preferred stock, DEBT is the company's net debt, TA is the company's book value of total assets. In the Mainland of China listed companies PS is manifested in the value of non-tradable shares in the calculation process that part of the net assets of the company, said the major. From the above analysis that the company's replacement value and market value ratios tend to a normal form of the market, but from a practical point of view, different times, different companies often have different values of Tobin's Q, Tobin Q value is greater than one caused mainly by the following factors: First, speculative hype, the market optimism, as well as the funds are often driven by irrational rise. Second, the company's intangible assets has also led to the company's market value is relatively high compared with the replacement value. Monopoly power, reputation, trademarks, patents and good managers, and so the existence of intangible assets will enhance the company's market value, Tobin Q value will be increased accordingly. On listed companies, its unparalleled advertising effects should also be assessed in a company's value can not be ignored important content. In addition, the replacement value of some assets to improve the value of assets such as real estate revaluation will also affect the company's market value. Finally, the different periods of time due to differences in profitability and the market rate of return on equity requirements of different areas, will also affect the company's value judgments.
The U.S. stock market data from more than 100 years studies have shown that the past century the U.S. stock market volatility of the overall value of Tobin's Q value of 1 in most years below the long term, companies will revert to the market value of its assets, replacement cost of similar the level of Tobin's Q ratio to the average return to the market the more general rule.
Practice in Shanghai and Shenzhen stock markets from the point of view, since the decline since 2001, Tobin's Q value is decreased, in particular, Tobin's Q values are too high value of the company rate of return more often. PE, PB and other valuation methods are still important value is the current assessment method, but its flaws gradually exposed, such as between the different markets and different sectors and between PE, PB level of how to measure and so is often difficult to quantify, while the Tobin Q is a true reflection of the company's intrinsic value and market value of the relationship between the index in the future is expected to become China's Shanghai and Shenzhen stock market, an important indicator of the absolute value assessments. If there is no revaluation of intangible assets, as well as the impact of future high-Tobin Q value of the company's Tobin's Q is expected to return to and will become a major market risk, while a lower Tobin Q has a replacement value of companies, which may well become the market important investment opportunities, but in which the need to remove some losses as well as the ST class companies.
