Survival Kit for an Equity Analyst: The Essentials You Must Know de S Horie

Survival Kit for an Equity Analyst: The Essentials You Must Know

S Horie

Discover a one-of-a-kind blueprint to equity analyst success from an industry leader In Survival Kit for an Equity Analyst: The Essentials You Must Know, veteran analyst Shin Horie delivers a must-read, practical guide on the analysis of companies and industries. The book offers a guide to conducting industry-level analysis from a global perspective, with a particular emphasis on adjustments necessary for covering companies in emerging markets. Readers will also get:

A robust background on the basic process flow of company analysis and valuation
Guidelines for examining earnings drivers in major industries
Tips on the qualitative profiling of companies and how to dig deeper to find nuance that financial statements don't express

Perfect for early-career equity analysts themselves, as well as corporate managers who seek to understand how their organisations will be scrutinized and examined by finance professionals, Survival Kit for an Equity Analyst offers readers an insightful narrative on the necessary ingredients for success in this demanding field.

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Cuprins

Preface: Why I Wanted to Write This Book xi Introduction: How to Approach Company Analysis xv List of Acronyms xix Part I: Lessons From the Past: My Story as an Analyst 1 From Fish Cakes to Computer Numerical Control (1988-1995) 2 Not Just a Japanese Tourist - Becoming a China H-share Analyst (1996-1998) 5 A Truly Global Research Experience - Semiconductor Analyst (1998-2007) 7 New Lexicon: Clinical Trial, Cap Rate, Embedded Value, Metal Spread (2008-2013) 11 Importing DM Experience to EM: From Japan to Asia-Pacific (2014-2017) 13 Connecting the Dots: From Asia to Global (2018-now) 16 Part II: Laying the Groundwork 19 Chapter 1: Understand the 'Character' of the Industry 21 Six Basic Steps for Forecasting Industry Growth 22 TAM Growth Rate 27 Ten Additional Angles for Testing Forecasts 28 Chapter 2: Assess the Earnings Drivers in Different Industries 37 Hyper Growth - Internet, Fintech, Biotechnology 45 Secular Growth - Software, Medical Technology 48 Cyclical - Capital Goods, Transport, Energy, Commodities, Chemicals, Autos 49 Cyclical Growth - Semiconductor, Electronic Components, Technology Hardware, Clean Energy 54 Stable - Consumer Staples, Retail, Consumer Discretionary, Pharmaceutical, Media, Business Services 58 Interest Rate Sensitive - REITs, Property Developers, Banks, Insurance 63 Regulated - Utilities, Telecoms 66 Chapter 3: Identify the 'Personality' of the Company 71 Product and Service 71 Origin and History 72 Management Profile 73 Ownership Structure 73 Value Chain 74 Competitive Moat 75 Track Record of Strategic Decisions 76 Corporate Culture by Country 77 Earnings Guidance Track Record 77 Controversy Record 78 Management Quality - A Framework 78 Part III: Analyse and Apply the Findings 83 Chapter 4: Put Findings into the Earnings Model 85 Segmental Revenue Forecast 87 Income Statement Forecast 88 Balance Sheet Forecast 95 Cash Flow Forecast 98 How to Put Cyclicality into Long-term Earnings Forecasts 100 Quarterly Forecasts can be Helpful 100 A Birdseye View is Helpful 101 Financial and Property Sectors are Unique 101 Chapter 5: Summarize All Thoughts 105 A Suggested Method for Creating a Practical Scorecard 105 Chapter 6: Find the Appropriate Valuation Framework 109 Hyper Growth - Internet, Biotechnology 112 Secular Growth - Software, Medical Technology 114 Cyclical - Capital Goods, Transport, Energy, Commodities, Chemicals, Autos 115 Cyclical Growth - Semiconductor, Technology Hardware, Clean Energy 116 Stable - Consumer Staples, Retail, Consumer Discretionary, Pharmaceutical, Media, Business Services 117 Interest Rate Sensitive - Banks, Emerging Market Banks, Insurance, Property, REITs 118 Regulated - Utilities, Telecoms 120 Conglomerates 121 Additional Considerations on Valuation 124 Chapter 7: Differentiation versus Street 131 Is the View Actually Different? 131 Where is the Difference? 132 What is Driving the Difference? 133 Value of an Undifferentiated Conclusion 134 Part IV: What to Research and How to Power the Analysis 135 Chapter 8: How to Generate Exciting Ideas 137 1: Burning Questions 137 2: Products to Solve Problems 138 3: Forgotten New Technologies 138 4: 'Little Stories' 139 5: New Language 140 6: B2B and Orphan Stocks 140 7: The Second or Third Derivatives of Structural Changes 141 8: Local Trends 141 9: Inputs from the Real World 141 Chapter 9: How to Deal with Disruptors, Emerging Markets, ESG, and Downturns 145 How to Forecast and Value 'Disruptors' 145 How Should Emerging Markets be Looked at? 149 How to Think about ESG Issues 151 How to Cope with Economic Downturns 155 Chapter 10: Using Soft Skills to Power the Analysis 157 How to Build a Relationship with Companies 157 How to Leverage the Team 159 How to Communicate Ideas Effectively 161 What Types of Training Should New Analysts Ask for? 163 Time Management 165 Part V: Recap and Closing Thoughts 169 About the Author 173 Acknowledgements 175 Index 177