Day One

Session 1:

Introduction – Comparable Company Analysis VS Free-standing Valuation modeling

• Comparable Company and/or comparable Transaction Analysis?

• Selecting the peer group – Market or (global?) sector?

• Analysing what? Earnings, Dividends, Assets, Sales, Interest Cover…..

• Life Cycle of a Company and Porter’s Five Forces. From growth to Fade

• Writing a Research report – do’s & don’ts

Session 2:

Traditional Earnings- based Methodology

• The love affair with the Price/Earnings ratio

• What is an appropriate Multiple? PEGs

• Comparable company analysis, the effect of Cyclicality

• Shortcomings of this valuation metric

• Do share buybacks make a Company’s shares cheaper?

Session 3:

Asset Based Valuations

• Book Values and Returns on Equity (ROE)

• The special challenge that is the Bank sector

• Price to Book Values (premiums and Discounts) – The Property sector

• Embedded and Appraisal Values – The Insurance sector

• Case Study - Intangible Assets – What are Brand names worth?

Session 4:

Portfolio Construction for Private clients in practice

• Price to Sales, the basics

• Enterprise Values - What are they and why were they developed?

• EV Multiples - EBITDA, Sales – Manufacturing, Retailing sectors

• Case Study

Day Two

Session 1:

The Capital Asset Pricing Model & the Cost of Equity

• Risk Free Rates, Betas & the Equity Risk Premium

• Leveraged Betas & the Cost of Equity

• Deriving the Cost of Equity using CAPM

• Case Study – Betas in practice

Session 2:

Discounted Cash Flow Valuations

• Using Cash to measure return. How does a Company make money?

• Free Cash Flow for the Firm VS Free Cash Flow for Equity holders

• Deriving the Cost of Debt

• The Discount Rate - Weighted Average Cost of Capital

• Terminal Value derivation and forecasting into Perpetuity

• Case Study (Excel based) – DCF in practice

Session 3:

Dividend Based Valuations

• Dividend Yields and Cover – who pays them and how much

• Dividend Discount Models – The Bank sector revisited

• Advantages and Disadvantages of this approach

• Case Study (Excel based) – Dividend Discounting in practice (Financials)

Session 4:

‘Value’ Investing at work & Alternative Valuation methodology

• Value Investing at work – from Benjamin Graham to Warren Buffet

• Arbitrage Pricing Theory

• Residual Income Model

• Stumbling blocks in the Valuation process & Analytical ‘gut instinct’

• Recap – Valuation methods & applicable sectors

Course Close