AI Blocks › Handle money and investing
Stock purchase price checker
Paste a company's earnings, book value and share price. Get a pass or fail on three price ceilings, with every sum shown.
Stock purchase price checker is a free AI skill for the job "Handle money and investing". Give the instructions to an AI assistant that supports the required files and tools, then review its output.
Free · No account · Made by AI Blocks · Level: advanced
What it does
A sound company can still be a poor purchase if the price is high enough. Most of the harm to careful buyers comes from paying a lot for a record that looks safe. This skill gives a price ceiling in three forms, taken from The Intelligent Investor. Price should be no more than fifteen times the average earnings of the last three years, and no more than one and a half times book value. A cheap price on one can pay for a dearer price on the other, so the two multiplied must stay under twenty-two and a half. It also checks the earnings yield, which is average earnings over price, against what safe bonds pay. It shows why popular growth names usually fail these tests: the price has run far ahead of the profit. It never says buy or sell.
You give it
- The share price
- Earnings per share for the last seven years, cleaned if you have done that
- Book value per share
- What high-grade bonds pay now, if you know it
- Source text (optional)
You get
- A pass or fail on each of the three ceilings
- The sums behind each result
- The earnings yield against the bond yield
- A note on how far the price is from passing
Use it when
- A company passed the quality tests and you want to know if its price is sensible.
- A popular company seems to have a great record and you want to know how much you would pay for hope.
- You are comparing two companies and want one clear price test for both.
How to use it
- Start a chat with the skill. Open it if you added it to your AI, or copy it and paste it in.
- Paste the price and the earnings and book value figures.
- Use the restated earnings from "Earnings padding detector" if you have them.
- Read the failed ceilings first.