Value investors do this by creating a Margin of Safety. The Difference between the current market capitalization and the actual value we find the company to be worth. Value investors also believe the value of the company is equal to the cash flow the business will generate for the rest of its' lifespan.

We aim to build models to try to accurately forecast the future of the business' earnings and free cash flow. When doing this we look to reduce risk by making conservative assumptions and finding a large margin of safety.

When I properly value a company it takes a week - month. I spend 100+ hours building my models and valuing the company. It is not a quick process. The stock market isn't a quick game though.

It is bipolar in nature in the short term, but in the long term it is a calculated process. Unfortunately I would not be able to thoroughly condense all of this research into one article so I would urge you to read my other post which will walk you through how you can learn value investing from scratch.