Shin Horie - Survival Kit for an Equity Analyst

1 Cover

2 Title Page Survival Kit for an Equity Analyst The Essentials You Must Know Shin Horie

3 Copyright

4 Dedication

5 Preface: Why I Wanted to Write This Book

6 Introduction: How to Approach Company Analysis Structure of this Book

7 List of Acronyms

8 Part I: Lessons from the Past: My Story as an Analyst

9 Part II: Laying the Groundwork Chapter 1: Understand the ‘Character’ of the Industry Six Basic Steps for Forecasting Industry Growth TAM Growth Rate Ten Additional Angles for Testing Forecasts Chapter 2: Assess the Earnings Drivers in Different Industries Hyper Growth – Internet, Fintech, Biotechnology Secular Growth – Software, Medical Technology Cyclical – Capital Goods, Transport, Energy, Commodities, Chemicals, Autos Cyclical Growth – Semiconductor, Electronic Components, Technology Hardware, Clean Energy Stable – Consumer Staples, Retail, Consumer Discretionary, Pharmaceutical, Media, Business Services Interest Rate Sensitive – REITs, Property Developers, Banks, Insurance Regulated – Utilities, Telecoms Chapter 3: Identify the ‘Personality’ of the Company Product and Service Origin and History Management Profile Ownership Structure Value Chain Competitive Moat Track Record of Strategic Decisions Corporate Culture by Country Earnings Guidance Track Record Controversy Record Management Quality – A Framework

10 Part III: Analyse and Apply the Findings Chapter 4: Put Findings into the Earnings Model Segmental Revenue Forecast Income Statement Forecast Balance Sheet Forecast Cash Flow Forecast How to Put Cyclicality into Long‐term Earnings Forecasts Quarterly Forecasts can be Helpful A Birdseye View is Helpful Financial and Property Sectors are Unique Chapter 5: Summarize All Thoughts A Suggested Method for Creating a Practical Scorecard Chapter 6: Find the Appropriate Valuation Framework Hyper Growth – Internet, Biotechnology Secular Growth – Software, Medical Technology Cyclical – Capital Goods, Transport, Energy, Commodities, Chemicals, Autos Cyclical Growth – Semiconductor, Technology Hardware, Clean Energy Stable – Consumer Staples, Retail, Consumer Discretionary, Pharmaceutical, Media, Business Services Interest Rate Sensitive – Banks, Emerging Market Banks, Insurance, Property, REITs Regulated – Utilities, Telecoms Conglomerates Additional Considerations on Valuation Chapter 7: Differentiation versus Street Is the View Actually Different? Where is the Difference? What is Driving the Difference? Value of an Undifferentiated Conclusion

11 Part IV: What to Research and How to Power the Analysis Chapter 8: How to Generate Exciting Ideas 1: Burning Questions 2: Products to Solve Problems 3: Forgotten New Technologies 4: ‘Little Stories’ 5: New Language 6: B2B and Orphan Stocks 7: The Second or Third Derivatives of Structural Changes 8: Local Trends 9: Inputs from the Real World Chapter 9: How to Deal with Disruptors, Emerging Markets, ESG, and Downturns How to Forecast and Value ‘Disruptors’ How Should Emerging Markets be Looked at? How to Think about ESG Issues How to Cope with Economic Downturns Chapter 10: Using Soft Skills to Power the AnalysisHow to Build a Relationship with Companies How to Leverage the Team How to Communicate Ideas Effectively What Types of Training Should New Analysts Ask for? Time Management

12 Part V: Recap and Closing Thoughts

13 About the Author

14 Acknowledgements

15 Index

16 End User License Agreement

1 Chapter 2Table 2.1 Earnings drivers in different industries

1 Chapter 1Figure 1.1 Steps to forecast industry growthSOURCE: Goldman Sachs Global Inv...

2 Chapter 3Figure 3.1 Sample management scorecard

3 Chapter 4Figure 4.1 Framework for building company earnings modelsSOURCE: Goldman Sac...

4 Chapter 5Figure 5.1 Sample company scorecard: industry characteristics.Figure 5.2 Sample company scorecard: peer comparison.Note: ***

5 Chapter 6Figure 6.1 Key factors that can influence company valuationSOURCE: Goldman S...Figure 6.2 Company earnings multiples are influenced by multi-layered factor...Figure 6.3 Sample valuation framework by sector

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2 Table of Contents

3 Begin Reading

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Shin Horie

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