Analysis on the Predictability of Stock Prices

Abstract

This thesis investigates if it is possible to forecast the intrinsic values of pipeline companies with precision. A widely accepted conjecture is that different valuation techniques yield the same intrinsic value for a given security. However, in practice the intrinsic values estimated using different valuation techniques differ, and in many cases the estimates differ substantially. This is usually because of the varying assumptions required in the different valuation techniques. This thesis examines the conjecture by estimating the intrinsic values of three pipeline companies by applying three valuation techniques to each company. As pipeline companies are heavily regulated, it is expected that the alternative techniques will lead to similar estimates of each company’s intrinsic value.