Upload File

3 stock valuation fundamental analysis

14
Stock Valuation – Fundamental Analysis Essentials of Corporate Finance Chapters 2, 3, 5, 7 Materials Created by Glenn Snyder – San Francisco State University

Upload: roushan-gupta

Post on 17-Sep-2015

4 views

Category:

Documents


1 download

Report

DESCRIPTION

Easy way to learn Stock Valuation. Very simple method.

TRANSCRIPT

  • Stock Valuation Fundamental AnalysisEssentials of Corporate FinanceChapters 2, 3, 5, 7Materials Created by Glenn Snyder San Francisco State University

    Materials Created by Glenn Snyder San Francisco State University

  • February 26, 2007Materials Created by Glenn Snyder San Francisco State University*TopicsWhat is Fundamental Analysis?Who Performs Fundamental AnalysisFundamental Analysis ProcessData GatheringBuilding ModelsAnalysis Determining the Business Outlook and ValueBuy / Sell Recommendations Career Advice for a Equity Research Analyst

    Materials Created by Glenn Snyder San Francisco State University

  • February 26, 2007Materials Created by Glenn Snyder San Francisco State University*Fundamental AnalysisFundamental Analysis seeks to determine a companys outlook based on factors related to the company itselfFundamental analysis includes:Company AnalysisEvaluation of the business modelFinancial Statement AnalysisRatio AnalysisCash Flow AnalysisManagement AnalysisEconomic AnalysisEconomic Forecasts and TrendsIndustry Analysis

    Materials Created by Glenn Snyder San Francisco State University

  • February 26, 2007Materials Created by Glenn Snyder San Francisco State University*Who Performs Fundamental Analysis?Equity Research AnalystsProduce fundamental analysis to generate investment recommendationsInvestorsPortfolio Managers make decisions based on the recommendations of research analysts

    Materials Created by Glenn Snyder San Francisco State University

  • February 26, 2007Materials Created by Glenn Snyder San Francisco State University*Fundamental Analysis ProcessPrior to making an investment recommendation, an Equity Analyst conducts fundamental research on a particular company

    This process includesGathering DataBuilding Models and Analyzing Data Determining the Business Outlook and ValueDeveloping a Recommendation

    Materials Created by Glenn Snyder San Francisco State University

  • February 26, 2007Materials Created by Glenn Snyder San Francisco State University*Data GatheringThe first step in fundamental analysis is data gathering.Data sources include:Company specific publicationsSEC Filings (e.g. 10K (Annual Report), 8K, Proxy Statements, etc)Company press releasesCompany websiteMediaIndustry specific publications (e.g. Banking American Banker)General MediaWall Street JournalMorningstarBarrons

    Materials Created by Glenn Snyder San Francisco State University

  • February 26, 2007Materials Created by Glenn Snyder San Francisco State University*Data GatheringAdditional Data Sources include:Quarterly Analyst CallsCompany PresentationsPersonal Meetings / Conference CallsCompany officers, competitors, industry experts, suppliers, customers, etc.Financial DatabasesFactSetBloombergReuters

    Materials Created by Glenn Snyder San Francisco State University

  • February 26, 2007Materials Created by Glenn Snyder San Francisco State University*Building ModelsEquity Research Analysts build economic, industry, and company models that will project a companys stock price.These models include:Model InputsImpacts of Product ReleasesSeasonality and TrendsGrowth and ProfitabilityDollar and MarginalForeseen events (e.g. spin-offs, acquisitions, etc.)Model OutputsFinancial Projections (including dividend projections)Ratio Analysis

    Materials Created by Glenn Snyder San Francisco State University

  • February 26, 2007Materials Created by Glenn Snyder San Francisco State University*Building ModelsThe models will reflect the economic, industry, and company information gathered through the various sources identified earlier

    The models will be updated periodically or when new, significant information is released to the public

    Materials Created by Glenn Snyder San Francisco State University

  • February 26, 2007Materials Created by Glenn Snyder San Francisco State University*AnalysisNow the Equity Analyst is ready to analyze the dataEconomic Forecast and AnalysisPCI and Economic Growth ModelsIndustry AnalysisTrends in Investment CyclesTrends in Technology AdvancementCompetitiveness of the IndustryCompany Forecast and AnalysisFinancial ProjectionsPeer ComparisonManagement Analysis

    Materials Created by Glenn Snyder San Francisco State University

  • February 26, 2007Materials Created by Glenn Snyder San Francisco State University*Determining the Business Outlook and ValueThe business outlook is based on factors related to the current and expected strength of the economy, industry, and company.

    The value of the company can be determined by a number of valuation methods:Discounted Cash FlowsDividend Discount ModelAsset ValuationRelative Valuation

    Materials Created by Glenn Snyder San Francisco State University

  • February 26, 2007Materials Created by Glenn Snyder San Francisco State University*Buy / Sell RecommendationsBased on the investment style, objectives, and research conclusions, the Equity Research Analyst provides an investment recommendation:Buy, Sell, or HoldInvestment Style MattersValue InvestorA value investor looks to invest in a security that is trading at a discount to its fair value and looks to sell when it is trading above that valueGrowth InvestorA growth investor looks to invest in companies with above average prospects for growth in the future

    Materials Created by Glenn Snyder San Francisco State University

  • February 26, 2007Materials Created by Glenn Snyder San Francisco State University*Buy / Sell RecommendationsExample:Research Conclusion:Current Stock Price:$35Valuation (based on DCF):$35Outlook: The near to mid-term outlook for the company is excellent. It should see revenue and earnings growth well above the economic growth, and revenue and earnings growth should outpace the industry growth as wellRecommendation for a Value Manager: SellRecommendation for Growth Manager: Buy

    Materials Created by Glenn Snyder San Francisco State University

  • February 26, 2007Materials Created by Glenn Snyder San Francisco State University*Career Advice for a Buy Side Equity Research AnalystProcess and detail orientedStrong quantitative skillsEconomic, industry, and company modelingExcellent verbal and written communication skillsPresentations and written reports (recommendations)Possess or willing to develop industry knowledgeE.g. Biotechnology, Technology, Healthcare, etc.Graduate level educationMBA and/or Chartered Financial Analyst Designation (CFA)Some large asset management firms will have an analyst training programHighly Competitive

    Materials Created by Glenn Snyder San Francisco State University

    **************


EnterpriseOne JDE5 Advanced Stock Valuation PeopleBook · EnterpriseOne JDE5 Advanced Stock Valuation PeopleBook May 2002 . EnterpriseOne JDE5 Advanced Stock Valuation PeopleBook

Bonds & Stock Valuation

1 6 Common Stock Valuation. 6-2 Common Stock Valuation Fundamental analysis: Studying a company’s accounting statements and other financial and economic

(stock valuation)

Stock Valuation

MGT 326 Ch 7 Stock Valuation (bdh2e) 1 STOCK (EQUITY) Learning Objectives: Understand Fundamental Stock Concepts, Terms & Characteristics Define the

Chapter 13 Equity Valuation 13-1. Fundamental Stock Analysis: Models of Equity Valuation Basic Types of Models –Balance Sheet Models –Dividend Discount

8. stock valuation

08 Stock Valuation

Savera Industries Ltd - National Stock Exchange of India … · Analysis of Fundamentals (addressed through Fundamental Grade) and Analysis of Returns (Valuation Grade) The fundamental

Valuation Concept Part II – Equity Valuation. Valuation of Financial Assets – Equity (Stock) Types of Stock: Common Stock Preferred Stock Common Stock

1 1 Chapter 13 Equity Valuation. 2 2 Fundamental Stock Analysis: Models of Equity Valuation Basic Types of Models Balance Sheet Models Dividend Discount

Chapter 13 Common Stock Valuation Name two approaches to the valuation of common stocks used in fundamental security analysis. Explain the present value

Bond & Stock Valuation

Valuing a Stock and a Bond. Stock Valuation is an Art not a Science Economic drivers of stock value Fundamental analysis based on accounting information

Slide 1 Stock Valuation Preferred Stock Features Valuation Expected return on a preferred stock Common Stock Characteristics Valuation – single and multiple

Chapter 13 Equity Valuation 13-2 Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Fundamental Stock Analysis: Models of Equity Valuation Basic

Fundamental Capital Valuation for IT Companiesfaculty.fiu.edu/~dupoyetb/capital_value.pdf · Fundamental Capital Valuation for IT Companies: ... Fundamental Capital Valuation for

Fundamental Analysis Valuation

Chapter 13 COMMON STOCK VALUATION. Fundamental Analysis analysts (or investors) try to determine the intrinsic value of a stock If: intrinsic value

7 Stock Valuation

How Fundamental are Fundamental Values? Valuation …

Stock Valuation Part 2 Relative Valuation