Book description
Step up stock selection with advanced valuation techniques
Beyond Earnings provides finance professionals with the most advanced techniques available for complex valuation and corporate performance analysis. Deep in detail and comprehensive in scope, this book features the first empirical discussion of mean-reversion in corporate profitability and growth, with expert guidance toward practical solutions. By focusing on cash flow and the economics of a company’s performance, the discussion relates a more effective process for stock screening, selection, and valuation. Step-by-step calculations guide you through the application of the HOLT CFROI and Economic Profit approaches for measuring operating performance, and expert insight from Credit Suisse researchers and consultants sheds new light on familiar situations.
Stock selection is the critical point in the performance matrix, and screening and valuation practices weigh heavily into a firm’s performance. As investors face increasing pressure to perform at ever-higher levels, this book provides essential analysis methods that help paint a more complete picture of a potential investment’s performance.
- Assess a firm’s performance accurately by adjusting for accounting distortions
- Calculate economic profit and CFROI
- Estimate future cash flow, profit streams, and the firm’s value
- Model terminal value and eliminate the perpetuity assumption
The effort to outperform benchmarks and exchange-traded funds grows increasingly Sisyphean as professional investors face mounting pressure from all sides. When the market is not performing to the level required to attain strategic goals, smarter stock selection becomes the lynchpin of high-performing firms. Advanced modeling provides an edge over traditional models in that it paints a truer picture of a corporation’s status, and extends that vision further into the future to facilitate more educated decision-making. Beyond Earnings is the professional manual to enhanced stock analysis and valuation, with invaluable guidance you won’t find anywhere else.
Table of contents
- COVER
- TITLE PAGE
- INTRODUCTION
- Section I: Financial Performance Assessment
-
Section II: Discounted Cash Flow and Economic Profit Valuation
- 4 WHAT’S IT WORTH? VALUING THE FIRM
-
5 QUANTIFYING THE VALUE AND RISK OF A COMPANY’S CAP
- KEY LEARNING POINTS
- INTRODUCTION
- THE WORST INVESTMENT I EVER MADE
- QUANTIFYING THE MAGNITUDE AND SUSTAINABILITY OF CAP
- THOUGHT EXPERIMENT: THE VALUATION OF CORE UNLIMITED
- THE PROBABILITY OF PERMANENT DISRUPTION
- THE CHARACTERISTICS OF COMPETITIVE ADVANTAGE
- FADE IS A VALUE DRIVER
- THE FUNDAMENTAL PRICING MODEL
- THE VALUE DRIVER TREE
- INVESTMENT GROWTH IS A VALUE DRIVER
- APPLYING THE FUNDAMENTAL PRICING MODEL
- FINAL THOUGHTS FOR THE MOMENT
- CHAPTER APPENDIX
- NOTES
- 6 HOLT ECONOMIC PROFIT
-
7 RISK, REWARD, AND THE HOLT DISCOUNT RATE
- KEY LEARNING POINTS
- RISK, RETURN, AND DIVERSIFICATION
- HOW LARGE IS THE EQUITY RISK PREMIUM (ERP)?
- SHOULD I USE THE ARITHMETIC OR GEOMETRIC AVERAGE?
- OTHER RISK FACTORS TO CONSIDER
- INTRODUCTION TO THE HOLT APPROACH OF ESTIMATING A FIRM’S DISCOUNT RATE
- RELATING THE HOLT DISCOUNT RATE AND FRAMEWORK TO CAPM AND APV
- CHAPTER APPENDIX: DO EQUITY DISCOUNT RATES MEAN REVERT?
- NOTES
-
Section III: Value Driver Forecasting
- 8 THE COMPETITIVE LIFE‐CYCLE OF CORPORATE EVOLUTION
- 9 THE PERSISTENCE OF CORPORATE PROFITABILITY
- 10 FORECASTING GROWTH
-
11 EVALUATING MARKET EXPECTATIONS
- KEY LEARNING POINTS
- THE RELATIVE WEALTH CHART AS A DECISION AID FOR EFFICIENTLY ASSESSING STOCK OPPORTUNITIES
- DISTILLING EXPECTATIONS FROM A STOCK PRICE
- CAN IT BEAT THE FADE?
- THE GREEN DOT
- THINKING ABOUT EXPECTATIONS AT DIFFERENT LIFE‐CYCLE STATES
- WHY THE GREEN DOT IS SO HELPFUL
- PICKING STOCKS ACROSS THE LIFE‐CYCLE
- FINAL REMARKS
- CHAPTER APPENDIX: GAUGING EXPECTATIONS USING PVGO
- NOTES
- 12 CLOSING THOUGHTS
- INDEX
- END USER LICENSE AGREEMENT
Product information
- Title: Beyond Earnings
- Author(s):
- Release date: December 2017
- Publisher(s): Wiley
- ISBN: 9781119440482
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