Posts by Andrew Stotz
VMC: Mistake #7: Valuing a Stock Using the Calculated Beta
Let’s move onto one of the most interesting subjects in valuation: beta. Discussing this crucial element of investing will helps us shed more light on the connected #7 top valuation mistake of valuing a stock using the calculated beta.
Read MoreGlobal Gross Profit Margin Is on Average 28%
Chart of the Day: We have combined the financial statements of globally-listed non-financial companies into one for the past 23 years. The average number of companies included in this study was 12,586 per year and as of 2017, it was 17,159. The gross profit margin has averaged 28.4% over the 23 years.
Read MoreVMC: Fundamental vs. Technical Analysis for Investing
Investors use a number of techniques to evaluate stocks before making a trade or long-term investment decision. The two core techniques used can broadly be divided into fundamental analysis and technical analysis.
Read MoreVMC: Mistake #6 – Underestimating Working Capital Investment
When forecasting deviations from that trend, have a strong reason and tell the accompanying narrative accurately. There’s nothing wrong with forecasting a change or a difference from the past—just be able to back up your analysis. What a great opportunity to tell the story that you’re seeing!
Read MoreVMC: The Motivation, Impact, and Pain of Share Buybacks
A share buyback is when a publicly-listed company uses cash to purchase its shares ‘back’ from the market. Also called share repurchase, the concept gives existing shareholders an option of selling their personal stakes back to the company. The only other way a company can distribute cash in such a manner is through dividends.
Read MoreVMC: Mistake #5 – Forecasting Drastic Changes in the Cash Conversion Cycle
It’s important to remember that huge year-to-year changes only happen in truly exceptional valuation cases. Significant changes in product mix or the introduction of new products can occasionally cause such huge annual changes. But, generally, annual forecasts should not deviate substantially from the historical numbers.
Read MoreVMC: 3 Effective Methods for Valuing a Business
Having a comprehensive value of your business is useful for helping you raise capital, whether through a business loan or investors, since it demonstrates you have a thorough understanding of the value of your business based on an all-embracing approach.
Read MorePoor Market Performance in the Philippines and Indonesia Continued in 1H18
Chart of the Day: Overall, Asian markets fell in 1H18. Taiwan was most resilient, the Philippines performed the worst. Most Asian markets also saw their currencies weakening against the US Dollar.
Read MoreGlobal Gearing Is in Uptrend and Has Passed 2008 Peak
Chart of the Day: Global gearing has been trending up since 2010. It passed the 2008 peak in 2017. However, gearing is still below peaks before the Dotcom bubble and the Asian financial crisis.
Read MoreVMC: Mistake #4 – Confusing Growth Capex with Maintenance Capex
When it comes to choosing CFA or MBA, it’s important to check out what will be required of you to attain it in terms of time and study, and what competitive edge each qualification will give your career. Here is how each type of certification will help you advance your skills, so that you can decide which one is right for you.
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