I was wondering, what is the consensus on what the best method for finding intrinsic value is?
This article indicates that Buffett pays attention to Return on Equity most, so how much revenue a company can generate per dollar invested in them. He also looks for low leverage and high profit margins.
That said, intrinsic value is a fool’s idea, because it means that companies have a “true” value that is not exactly reflected in their share price. If that were true, and the market (eventually) learned that, then you could profit on every single trade.
My understanding is that practitioners generally do not use a single method, but a mix of multiple ones to arrive to a “range” of values. So to answer your question, I don’t think there’s a “general consensus” on this as intrinsic value is intensely subjective and dominated by different variables and factors.
To add that investment bankers call this a football field graph. Generally, it’s composed of a DCF, public comparables (“comps”) and precedent transactions. Generally, the value of the company you will get using each methodology will be DCF > Precedent transactions > Comps.
This just shows that there is no such thing as company intrinsic value. Moreover, the value will be different for each buyer: a strategic buyer can achieve synergies so is willing to pay more, whereas a financial investor will pay less as there are no synergies to be achieved.