So you may be wondering:

What are these bell curve charts on the site?

The distribution charts are a histogram that show the range of valuation ratios calculated each week by the DCFHub discounted cash flow valuation methodology. DCFHub uses these histograms to determine the current discount rate every week.

The idea is that the theoretical price per share (in this case, the net present value) should match the actual trading price per share as closely as possible, for as many tickers as possible. The valuation percentages should form a bell curve centered around a valuation percentage of 100%, and the less variance the better.

The bell curve chart on this page, and in the website banner, shows the distribution chart produced by the DCFHub discounted cash flow methodology compared to other common methods of valuing stocks. The valuation methods, in order of least variance to most variance are:

1. Discounted cash flow (orange line)

2. PEG ratio (blue line)

3. Price-to-book value (green line)

4. Price to sales ratio (red line)

5. Price to cash (purple line)

Each of these methodologies produced a curve centered around 100%, but because the discounted cash flow methodology produces the tightest distribution, it did the best job predicting current stock prices.

What are these bell curve charts on the site?

The distribution charts are a histogram that show the range of valuation ratios calculated each week by the DCFHub discounted cash flow valuation methodology. DCFHub uses these histograms to determine the current discount rate every week.

The idea is that the theoretical price per share (in this case, the net present value) should match the actual trading price per share as closely as possible, for as many tickers as possible. The valuation percentages should form a bell curve centered around a valuation percentage of 100%, and the less variance the better.

The bell curve chart on this page, and in the website banner, shows the distribution chart produced by the DCFHub discounted cash flow methodology compared to other common methods of valuing stocks. The valuation methods, in order of least variance to most variance are:

1. Discounted cash flow (orange line)

2. PEG ratio (blue line)

3. Price-to-book value (green line)

4. Price to sales ratio (red line)

5. Price to cash (purple line)

Each of these methodologies produced a curve centered around 100%, but because the discounted cash flow methodology produces the tightest distribution, it did the best job predicting current stock prices.

Each week, DCFHub determines the market discount rate that best centers the valuation distribution curve at 100%. The discount rate and histogram are presented in the weekly results page. Theoretically, it is better to invest in the stock market when the market discount rate is higher.

It is worth noting that for these charts to work, the histogram must be constructed with exponential ranges. If you think about it, the opposite of a stock that is undervalued by 90% is not a stock that is overvalued by 90% (valuation percentage 190%) but rather one that is overvalued by 800% (valuation percentage of 900%).

It is worth noting that for these charts to work, the histogram must be constructed with exponential ranges. If you think about it, the opposite of a stock that is undervalued by 90% is not a stock that is overvalued by 90% (valuation percentage 190%) but rather one that is overvalued by 800% (valuation percentage of 900%).

Just in case anyone is wondering, the histograms used on DCFHub use the following ranges:

- Under 1.26%
- 1.26 to 1.58%
- 1.58 to 2.00%
- 2.0% to 2.51%
- 2.5% to 3.2%
- 3% to 4%
- 4% to 5%
- 5% to 6%
- 6% to 8%
- 8% to 10%
- 10% to 13%
- 13% to 16%
- 16% to 20%
- 20% to 25%
- 25% to 32%
- 32% to 40%
- 40% to 50%
- 50% to 63%
- 63% to 79%
- 79% to 100%
- 100% to 126%
- 126% to 158%
- 158% to 200%
- 200% to 251%
- 251% to 316%
- 316% to 398%
- 398% to 501%
- 501% to 631%
- 631% to 794%
- 794% to 1,000%
- 1,000% to 1,259%
- 1,259% to 1,585%
- 1,585% to 1,995%
- 1,995% to 2,512%
- 2,512% to 3,162%
- 3,162% to 3,981%
- 3,981% to 5,012%
- 5,012% to 6,310%
- 6,310% to 7,943%
- 7,943% to 10,000%
- Over 10,000%