Académique Documents
Professionnel Documents
Culture Documents
Presenter
Venue
Date
VALUATION
INTRINSIC VALUE
ASSET MISPRICING
Fair Value
Financial reporting
Investment Value
Value to specific buyer
Stock Selection
Inferring Market
Expectations
Valuation opinions
Strategic
decisions
Supplier
Power
Rivalry
Substitutes
Buyer
Power
Differentiation
Broad
Target
Market
Cost
Leadership
Differentiation
Narrow
Target
Market
Cost
Focus
Differentiation
Focus
Potential Interpretation
VALUATION MODELS
Absolute Valuation
Models
Present value models
Dividend discount models
Free cash flow to equity
Free cash flow to the firm
Residual income
Asset-based models
Relative Valuation
Models
Price ratios
Price-to-earnings ratio
Price-to-book-value ratio
Price-to-cash-flow ratio
Enterprise value multiples
What is the
availability and
quality of data?
What is the
purpose of the
valuation?
Sum-of-the-Parts Valuation
Sensitivity Analysis
Situational Adjustments
ANALYST ROLES
Sell-Side
Analysts
Buy-Side
Analysts
Corporate
Analysts
Independent
Analysts
ANALYST RESPONSIBILITIES
The CFA Institute Code of Ethics:
Members of CFA Institute must use reasonable care
and exercise independent professional judgment when
conducting investment analysis, making investment
recommendations, taking investment actions, and
engaging in other professional activities.
RESEARCH REPORTS
Effective research reports include:
Timely information
Clear, incisive language
Objective and well-researched information
Clearly distinguished facts and opinions
Consistent analysis, forecasts, valuation, and
recommendations
Sufficient disclosure of information
Key risk factors
Disclosures of conflicts of interest
SUMMARY
Valuation
Intrinsic value: Value given a complete understanding of the asset
Typically assumes the firm is a going concern
Intrinsic value Market price
Asset Mispricing
Active investors seek to exploit market mispricing
Active investors must believe that the market will correct itself within
the investment horizon
SUMMARY
Valuation Process
Steps: Industry and competitive analysis, forecasting, model
selection, valuation, recommendations
Industry analysis: Rivalry, new entrants, substitutes, supplier
power, buyer power
Quality of earnings is crucial
Valuation Models
Absolute models: Present value and asset-based models
Relative valuation models: Price ratios and enterprise value
multiples
Model should contain sensitivity analysis and situational
adjustments
SUMMARY
Analyst Roles