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Applied Equity Analysis and Portfolio Management + Online Video Course: Tools to Analyze and Manage Your Stock Portfolio

Book Description

A "hands-on" guide to applied equity analysis and portfolio management

From asset allocation to modeling the intrinsic value of a stock, Applied Equity Analysis and Portfolio Management + Online Video Course offers readers a solid foundation in the practice of fundamental analysis using the same tools and techniques as professional investors. Filled with real-world illustrations and hands-on applications, Professor Weigand's learning system takes a rigorous, empirical approach to topics such as analyzing the macro-finance environment, sector rotation, financial analysis and valuation, assessing a company's competitive position, and reporting the performance of a stock portfolio.

Unlike typical books on this subject—which feature chapters to read and exercises to complete—this resource allows readers to actively participate in the learning experience by completing writing exercises and manipulating interactive spreadsheets that illustrate the principles being taught. The learning system also features instructional videos that demonstrate how to use the spreadsheet models and excerpts from the author's blog, which are used to depict additional examples of the analysis process. Along the way, it skillfully outlines an effective approach to creating and interpreting outputs typically associated with a top-down money management shop — including a macroeconomic forecasting newsletter, detailed stock research reports, and a portfolio performance attribution analysis.

  • Covers topics including active and passive money management, fundamental analysis and portfolio attribution analysis

  • Companion streaming videos show how to use free online data to create yourown analyses of key economic indicators, individual stocks, and stock portfolios

  • A valuable resource for universities who have applied equity analysis and portfolio management courses

Practical and up-to-date, the book is an excellent resource for those with a need for practical investment expertise.

Table of Contents

  1. Cover
  2. Series
  3. Title Page
  4. Copyright
  5. Preface
  6. Acknowledgments
  7. Chapter 1: Perspectives on Active and Passive Money Management
    1. TERMINOLOGY: INVESTORS, INVESTMENT VEHICLES, RISK AND RETURN
    2. THE TOP-DOWN FUNDAMENTAL ANALYSIS PROCESS
    3. THE RECORD OF PROFESSIONAL MONEY MANAGERS
    4. MARKET EFFICIENCY, BEHAVIORAL FINANCE, AND ADAPTIVE EXPECTATIONS
    5. ADDITIONAL PERSPECTIVES ON INVESTING
    6. PROFESSIONAL INVESTMENT POLICY STATEMENTS
    7. SUMMARY
    8. QUESTIONS
    9. ANSWERS TO SELECTED QUESTIONS
    10. REFERENCES
    11. NOTES
  8. Chapter 2: Analyzing the Macro-Finance Environment
    1. ECONOMIC ANALYSIS: THE FIRST STEP OF A TOP-DOWN FUNDAMENTAL PROCESS
    2. DATA CONSIDERATIONS: NOMINAL AND REAL TIME SERIES
    3. NATIONAL INCOME, CORPORATE PROFITS, AND JOB CREATION
    4. LEADING ECONOMIC INDICATORS
    5. COINCIDENT ECONOMIC INDICATORS
    6. LAGGING ECONOMIC INDICATORS
    7. SUPPLEMENTAL ECONOMIC INDICATORS
    8. SUMMARY
    9. QUESTIONS
    10. REFERENCES
    11. NOTES
  9. Chapter 3: Valuation, Expected Returns, and the Dividend Discount Model
    1. FINANCE PRINCIPLE 1: VALUATION
    2. FINANCE PRINCIPLE 2: VALUE AND EXPECTED RETURNS
    3. SUMMARY
    4. QUESTIONS AND PROBLEMS
    5. ANSWERS TO SELECTED QUESTIONS
    6. REFERENCE
    7. NOTE
  10. Chapter 4: Historical Performance Analysis
    1. GETTING STARTED
    2. HISTORICAL STOCK RETURNS
    3. GROWTH IN REVENUES, PROFITS, AND DIVIDENDS
    4. GROSS, OPERATING, AND NET PROFIT MARGINS
    5. RELATIVE VALUATION
    6. LIQUIDITY AND DEBT
    7. PROFITABILITY: ROA AND ROE
    8. NOPAT, TOTAL INVESTED CAPITAL, FREE CASH FLOW, AND ROIC
    9. VALUE CREATION: COST OF CAPITAL, EVA, MVA, AND INTRINSIC VALUE
    10. USING DIFFUSION INDEXES TO SUMMARIZE PERFORMANCE ANALYSIS
    11. SUMMARY: HISTORICAL PERFORMANCE ANALYSIS
    12. APPENDIX: UNITED TECHNOLOGIES' FINANCIAL STATEMENT HIGHLIGHTS, 2009–2012
    13. QUESTIONS
    14. ANSWERS TO SELECTED QUESTIONS
    15. REFERENCES
    16. NOTES
  11. Chapter 5: Financial Statement Forecasting, Financial Analysis, and Valuation
    1. THE INCOME STATEMENT FORECAST WORKSHEET
    2. THE PERCENT-OF-SALES FORECASTING METHOD
    3. FORECASTING MCD'S INCOME STATEMENT
    4. FORECASTING MCD'S BALANCE SHEET
    5. PRO FORMA ANALYSIS: MCD
    6. INTRINSIC VALUE MODELING
    7. FINANCIAL FITNESS AND PROBABILITY OF BANKRUPTCY SCORECARDS
    8. SUMMARY
    9. CASE STUDY 5.1: TWO PERSPECTIVES ON VALUATION ANALYSIS: THE CURIOUS CASE OF AMAZON, INC.
    10. QUESTIONS
    11. REFERENCES
    12. NOTES
  12. Chapter 6: Analyzing Company Strategy and Identifying Catalysts
    1. SOURCES OF INFORMATION
    2. UNIQUE CAPABILITIES LEAD TO SUSTAINABLE COMPETITIVE ADVANTAGE
    3. GETTING STARTED: ANALYZING STRATEGY AND COMPETITIVE ADVANTAGE
    4. PORTER'S FIVE FORCES MODEL
    5. SWOT ANALYSIS
    6. CATALYSTS
    7. SUMMARY
    8. QUESTIONS
    9. ANSWERS TO SELECTED QUESTIONS
    10. REFERENCES
  13. Chapter 7: Portfolio Risk and Performance Attribution
    1. FOUNDATIONS: RISK AND EXPECTED RETURN
    2. STATISTICAL REPRESENTATIONS OF MACROECONOMIC AND FIRM-SPECIFIC RISK
    3. EXTENDING THE MEAN-VARIANCE FRAMEWORK: BETA
    4. PERFORMANCE ATTRIBUTION: SECTOR WEIGHTS, DIVIDEND YIELD, BETA, AND STYLE
    5. MULTIFACTOR MODELS
    6. SUMMARY
    7. QUESTIONS AND PROBLEMS
    8. ANSWERS TO SELECTED QUESTIONS AND PROBLEMS
    9. REFERENCES
    10. NOTES
  14. Appendix: The Time Value of Money and the Basics of Valuation
    1. BASIC TERMINOLOGY
    2. THE BASIC FUTURE VALUE TOOL
    3. THE BASIC PRESENT VALUE TOOL
    4. PERPETUITIES
    5. CALCULATING AVERAGE ANNUAL COMPOUND RATES OF RETURN
    6. INTEGRATED PROBLEMS FEATURING MULTIPLE TVM TOOLS
    7. SOLVING FOR THE NUMBER OF PERIODS
    8. MORE ON THE EAR-TO-APR CONVERSION
    9. ARITHMETIC VERSUS GEOMETRIC AVERAGES
    10. QUESTIONS AND PROBLEMS
    11. ANSWERS TO SELECTED QUESTIONS
  15. About the Online Video Course
  16. About the Author
  17. Index
  18. Access Code