A great primer on determining (or educated guessing) a stock's value

Step 1: Measure the stock's risk and reward. We can do this by downloading the stock's history back to inception and evaluating its annual gains...

But that's just half the story. You must next evaluate the risk you're taking by annualizing the stock's monthly returns...

Step 2: Examine the stock's price-to-earnings multiple. Many investors examine a stock's potential by comparing its price-to-earnings ratio (P-E) with its P-E range in the past. That is one way to tell if investors have driven the stock up faster than its earnings have grown.

One way to do this is by using BetterInvesting's Stock Selection Guide. We begin by estimating the stock's expected long-term growth... Next, we look at the company's profit trends... pre-tax profit margins... and returns on equity (a measure of management effectiveness)... Last, we compare the stock's forecasted P-E with its range...

Step 3: Calculate the company's value using its forecasted future cash flows. Some investors like to value stocks like bonds, by measuring the worth today of the company's expected future cash flows.

Using the methodology of NewConstructs.com, which provides a website that performs this analysis... economic profit margin (profit after all costs)... long-term revenue growth rate...

Step 4: Check the USA TODAY Stock Meter score. This proprietary measure available at USATODAY.com tells you how aggressive an investment a stock is, based on its financial history...

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