valuation project
One of the larger projects we run every year is the company valuation project, in which we choose a company, and cover it as would a research analyst. This project covers the principles of valuation and the processes related to writing and presenting an analyst report.
The project is designed to give you a clear understanding of the several key concepts in equity valuation, whether your learning intent is managing shareholder value or active security selection:
- What value (shareholder value) is
- Why we measure it
- And how we measure it
It will also give you a practical taste of equity research to help you decide if this field is one you would like to pursue.
Benefits
By participating in this project:
- You will have published an analyst report which you directly contributed to. This is a great conversation piece you can bring into an interview.
- You will have made yourself highly eligible for the Portfolio Management Directed Study (4 credits), which takes this project to new levels by introducing topics such as risk management and exposes you to the functions of an investment business.
- You will rock Corporate Finance (FE449) and related courses.
Timeline
The tutorials are run during the meetings, most of which will be given by
Professor Jeffrey Heisler from the MS Investment Management program. During
the fall semester, we deliver several tutorials to introduce/review concepts
of valuation and begin to collect and analyze data on our targeted company.
In the spring, we push forward with creating our company’s cash flow models, determining its value, pricing it, making a recommendation, publishing our analysis, and finishing the semester by presenting our recommendation directly to the company’s board.
Delivery
The material and curriculum is delivered in a crash-course format, designed
to be taught to people who have limited or no prior exposure to the topics.
The project does require a significant dedication on behalf of the students,
who otherwise juggle a multitude of typical college student matters--classes,
meetings, and personal affairs. The project requires one to do the work, the
research, and to get to know the company as well as possible.
In an effort to maximize the learning value under limited time constraints, we constructed our tutorials under the assumption that all members have a basic understanding of financial accounting—what the line items mean, time value of money, and common terminology. However, no prior knowledge is expected, and we will stop to explain any topic needed.
