Yes... If you hold the stock, valued in the market at $3.30 but you find that it's discounted FCF "value" is only $2.60, you would sell. Theoretically, you would expect the market price to eventually move toward the firm's DFCF value - so while it's above that value sell.
You may not necessarily have a gain, b/c that would depend on the price at which you purchased the stock, but you would be avoiding a further deterioration of the value of your position.
So here's how it goes,
I have used a discounted free cash flow method to find the equity value of firm.
So i used this value to divide the total shares to find the price per share which is the target price.
This target share price is $2.60. However, the mkt price is $3.30.
And it said recommend to sell. <---- I am not sure about what this means as it's not clear enough.
Is it trying to say: i have this firm's share and i should sell it @ mkt price to gain profit?
