How do you value a Company and its Shares?
Apple, Amazon, Tesla, Microsoft – great companies perhaps, but are they great investments? While there are a variety of investment styles an investor might apply, investing over any reasonable period ultimately boils down to a simply reality – if you overpay for a stock you are likely to get stung, and if you underpay then odds are you will profit. Therefore, to stack the deck in your favour when investing, the ability to value a company is vital.
The Company Valuation Playbook introduces you to the industry-standard tools used by professionals globally to value companies and their shares. These valuation tools can be applied by anyone, no matter their experience. All you need is a computer, the internet, and a bit of common sense.
A must read for the aspiring investor
Smart, methodical and practical
Alexandra Altinger, CEO, J O Hambro Capital
Stephen Pearson, CIO, Jupiter Asset Management
1. Qualitative Analysis – Learn the key forces that shape a company’s outlook
2. Quantitative Analysis – Understand how to read, interpret and standardise financial statements
3. Fact finding – Discover how to dig out information on a company, disclosure requirements and voting opportunities
4. Projecting Returns – Acquire the skill to develop an objective forward looking forecast, ranging from a simple headline guestimate right through to a full three-statement financial model
5. Estimating Risk – Master the ability to build up a required return using the risk free rate and risk premium
6. Intrinsic valuation – Discount company cash flows to generate a valuation based on shareholder return
7. Relative valuation – Uncover how to standardise the valuation of peer companies, then adjust and apply to a valuation target
SPECIAL VALUATION SITUATIONS
8. Mergers & Acquisitions – Understand the process and adjustments when valuing a company as part of a merger or acquisition (M&A)
9. Leverage Buyouts – Incorporate additional debt assumptions when dealing with highly leveraged transactions (LBO’s)
10. Start-up – Modify the relative and intrinsic valuation approach to make it applicable for companies with little or no history
11. Banks – Determine the key variables, limitations and adjustments required when valuing a bank
12. Profiting from insights – Learn how to manage a large universe of opportunity, and the considerations to take into account when taking a long or short position
13. Behavioural biases – Study how to avoid the many behavioural biases which create avoidable investment errors