Equity Investments: Study Session 14
Study Session Materials
Complete List of CFA Program Readings
Topic Overview
Industry and Company Analysis
This study session focuses on industry and company analysis and
describes the tools used in forming an opinion about investing in a
particular stock or group of stocks.
This study session begins with the essential tools of equity valuation: the discounted cash flow technique and the relative valuation approach. These techniques provide the means to estimate reasonable price for a stock. The readings on industry analysis are an important element in the valuation process, providing the top–down context crucial to estimating a company’s potential. Also addressed is estimating a company’s earnings per share by forecasting sales and profit margins.
The last reading in this study session focuses on price multiples, one
of the most familiar and widely used tools in estimating the value of a
company, and introduces the application of four commonly used price
multiples to valuation.
View learning outcome statements (LOS) for reading objectives.
Complete List of CFA Program Readings
|
“An Introduction to Security Valuation: Part
I” Ch. 11, Investment Analysis and Portfolio Management, 8th edition, Frank K. Reilly and Keith C. Brown (South-Western, 2006) |
View LOS |
|
“Industry Analysis” Ch. 13, pp. 466–468, Investment Analysis and Portfolio Management, 8th edition, Frank K. Reilly and Keith C. Brown (South-Western, 2006) |
View LOS |
|
“Equity: Concepts and Techniques” Ch. 6, pp. 256–273, International Investments, 5th edition, Bruno Solnik and Dennis McLeavey (Addison Wesley, 2003) |
View LOS |
|
“Company Analysis and Stock Valuation” Ch. 14, pp. 513–516 and 533–548, Investment Analysis and Portfolio Management, 8th edition, Frank K. Reilly and Keith C. Brown (South-Western, 2006) |
View LOS |
|
"An Introduction to Security
Valuation: Part II"
Ch. 11, Investment Analysis and Portfolio Management, 8th edition, Frank K. Reilly and Keith C. Brown (South-Western, 2006) |
View LOS |
|
“Introduction to Price Multiples” John D. Stowe, Thomas R. Robinson, Jerald E. Pinto, and Dennis W. McLeavey (AIMR, 2003) |
View LOS |