There needs to be an excel stock evaluation as well.
The written investment report is your most important activity in this course. The report will analyze a particular company/set of companies in detail and provide an investment recommendation. Your analysis will consist of an Investment Thesis, Company Description, Industry Analysis, Financial Analysis, and Valuation Analysis. In addition, some focus should be placed, in the report and certainly in the presentation, on identifying 2-3 key drivers or “catalysts” that you believe will likely boost the stock price. Things to consider in the report and analysis:
[1] Outline the characteristics of a business and their business model, e.g, evaluate cyclicality, understand and evaluate the overall business quality using qualitative metrics, e.g., Return on Invested Capital [ROIC], Return on Assets [ROA], Return on Equity [ROE], profit margin.
[2] Analyze the Balance Sheet: Evaluate the appropriateness of the company’s balance sheet structure,
especially considering their business model using quantitative metrics, e.g., Debt/Equity, Times Interest
Earned, Equity Multiplier.
[3] Apply valuation techniques and metrics to determine the intrinsic value of a business, e.g., Price to Earning [P/E], Price to Book [P/B], Price to Tangible Book [P/TB], Price to Cash Flow [P/CF], Enterprise Value to Earning Before Interest Taxes Depreciation and Amortization on [EV/EBITDA], Discounted Cash Flows [DCF], industry and competitor comparative analysis.
[4] Apply macro-valuation techniques to come to a recommendation on sector net exposure.
