(BQ) Part 2 book "Investment analysis & portfolio management" has contents: Company analysis and stock valuation, technical analysis, equity portfolio management strategies, bond fundamentals, option contracts, an introduction to derivative markets and securities | CHAPTER 14 Company Analysis and Stock Valuation After you read this chapter, you should be able to answer the following questions: • • • • • • • • • • • • • • • • • • • • • • Why is it important to differentiate between company analysis and stock valuation? What is the difference between a true growth company and a growth stock? How do we apply the two valuation approaches and the several valuation techniques to Walgreens? What techniques are useful when estimating the inputs to alternative valuation models? What techniques are useful when estimating company sales? How do we estimate the profit margins and earnings per share for a company? What factors are considered when estimating the earnings multiplier for a firm? What two specific competitive strategies can a firm use to cope with the competitive environment in its industry? In addition to the earnings multiplier, what insights can be gained from other relative valuation ratios? How do we apply the several present value of cash flow models to the valuation of a company? What value-added measures are available to evaluate the performance of a firm? How do we compute economic value added (EVA) and market value added (MVA)? How do these value-added measures relate to changes in the market value of firms? What is the relationship between positive EVA and a true growth company? Why is it inappropriate to use the standard dividend discount model (DDM) to value a true growth company? What is the difference between no growth, simple growth, and dynamic growth? What is the growth duration model, and what information does it provide? Once you compute a stock’s growth duration, how do you make an investment decision? How can we use the growth duration model to estimate the P/E for a growth company? How can site visits and interviews provide unique insights (discovery) not generally available? What factors should lead you to sell a stock? What additional factors should be considered when .
