Securities Analysis
Apply fundamental analysis to stocks and fixed income securities - discussing performance and earnings forecasting, and comparables within an industry.
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Module 1: Analysis: definition and role in securities valuation
- Alternate approaches to securities valuation
- Scope and limitations of securities analysis
Module 2: Equities securities analysis
- Technical analysis
- Quantitative analysis
- Top down fundamental analysis
Module 3: Comparison between the types of analysis
- Use and users
- Empirical evidence
Module 4: Specific applications of fundamental analysis
- Discount rate / risk premium
- Earnings (dividends) / growth rate
Module 5: Financial Accounting and Securities Analysis
- Role of accounting statement information in investment decisions
- Generally Accepted Accounting Principles (GAAP)
- Formal definitions and practical interpretations
Module 6: Financial statements
- Balance sheet
- Types of financial statements
- How financial statements relate to one another
Module 7: Related Disclosure and Issues
- Using financial statements in securities analysis
- Common sized statements
- Index number (trend) statements
- Ration analysis
Module 8: Profits and Cash Flow
- Income statement measures of profit
- What do they mean?
- Measures of profitability: definitions and interpretations
- Analysis of profitability measures
Module 9: Cash flow
- Role of cash flow in securities analysis
- Computation of cash flow
- Statement of cash flows
Module 10: Analysis of Profitability and Return
- Profitability analysis
- Profit margin: gross, operating and net
- Related cost and profit issues
- Break-even analysis
- Operating leverage
Module 11: Return on investment
- Return on assets (ROA)
- Return on equity (ROE)
- Impact of financial leverage
- Dupont method
Module 12: Economic Analysis
- Role of economic analysis in security analysis
- Connection between the real economy and the financial markets
- Economic variables and securities valuation
Module 13: Macroeconomic analysis
- Aggregate supply and demand
- Business cycles and the financial markets
- Economic variables and the securities valuation
Module 14: Microeconomic analysis
- Firm and industry cost and revenue curves
- Industry structure
Module 1: Competitive analysis
- Rivalry among existing competitors
- Threat of new entrants
- Bargaining power of buyers, suppliers
- Bargaining power of suppliers
- Industrial/product life cycle theory
- Pioneering development
- Stabilization and market maturity
- Deceleration of growth and decline
Module 2: Industrial/product life cycle theory
- Pioneering development
- Stabilization and market maturity
- Deceleration of growth and decline
Module 3: Earnings and earnings per share (EPS)
- Concept of earnings
- Measuring earnings
- Earnings quality
- Earnings projections
Module 4: Asset pricing and risk
- Classical measures of risk
- Modern Portfolio Theory - standard deviation of return
- Capital Asset Pricing Model - Synthetic risk (beta)
Module 5: Modern portfolio theory
- Risk
- Efficient portfolios/frontier
Module 6: Capital Asset Pricing Model (CAPM)
- Model specifications
- CAPM and the index model
- Arbitrage pricing model
Module 7: General considerations
- Earnings/net revenues/cash flow
- Risk - discount rate including an equity risk premium
Module 8: Asset based versus earnings flow based approaches
- Liquidation value
- Return on equity (ROE)
- Earnings/cash flow based methodologies
Module 9: Company analysis
- Position within industry
- Financial statement analysis
- Interpreting financial statements and ratios
Module 10: Price/earnings ratios
- Variants - historic/trailing versus forecast/forward p/e ratios
- Factors influencing market/stock valuation multiples
Module 11: Other common stock valuation ratios
- Cash flow multiples
- Sales multiples
- Book value multiples
Module 12: Dividend discount models
- Stock reflects present value of dividends
- Variants
- Considerations
Module 13: Fixed Income and Derivative Considerations
- Duration/Convexity, Bond Pricing
- Derivative Considerations