Applied Equity Analysis
Stock Valuation Techniques
for Wall Street Proffessionals
"The equity
analyst's job is to present a position, supported by financial and nonfinancial evidence.
Data unnecessary to the argument are, in a word, unnecessary. However, the analyst must
understand all the data, relevant or not. The ultimate goal of the equity analyst is the
exploitation of any difference between a stock's price and its value." -From
Chapter 1
Applied Equity Analysis is
about understanding all the data. Written by former JP Morgan managing director James
English an adjunct assistant professor of finance at the Columbia University School of
Business, honored by The Wall Street Journal for his stock analysis skills this
innovative book treats valuation as a practical tool rather than a theoretical exercise.
Its integrated approach shows you how to build straight-line connections between a firm's
fundamental competitive situation and its stock performance, by combining an understanding
of a firm's strengths and weaknesses with financial statement analysis to build a more
complete model of a firm's future stock market performance.
Combining a solid discussion
of finance and investment theory with techniques frequently used by working buy- and
sell-side analysts. Applied Equity Analysis discusses:
- Specific
valuation techniques for identifying stocks that are undervalued relative to their peers
- Quantitative
techniques to link a firm's projected future financial performance to its potential future
valuation based upon the current trading patterns of comparable stocks
- A
hybrid valuation technique to mathematically calculate a stocks inherent growth
expectations
- A
proven strategy for formulating and successfully presenting an investment recommendation
- An
entire chapter on the Stern Stewart EVA system as an alternative and potentially useful
way of decoding financial statement information
- Relative
and hybrid earnings-based valuation techniques that are more practical than cashflow
methods and frequently far superior
On todays Wall Street, equity
analysts must focus on a firm's ability to produce returns that exceed capital costs, and
then estimate the firm's future power to maintain and increase those returns. Let Applied
Equity Analysis supply you with in-depth examples and explanations of Wall Street's most
important equity analysis tools and give you a hands-on, real-world handbook for equity
analysis in todays complex financial marketplace.
JAMES ENGLISH is currently an
adjunct assistant professor of finance at Columbia University School of Business. He spent
twenty years with JP Morgan serving in many positions, including managing director ofJP
Morgan Capital, the firms venture capital unit. In his over quarter-century career in
finance, English practiced virtually every one of the field s subspecialties: commercial
banking and credit analysis, corporate treasury and foreign exchange, capital markets,
mergers & acquisitions, venture capital, and sell-side equity analysis.
422 pages