This unique course, delivered by a highly experienced professional equity analyst, will help investors become expert at valuing companies. This is the first module in our series, Become a Valuation Guru. It first reviews the Behind the Balance Sheet Valuation philosophy, which has been honed in a 25+ year career looking at stocks.
The course then explores how to calculate enterprise value, the most critical building block in company valuation. We look at how to calculate a simple EV, as is done in Bloomberg and similar systems. We then go through how to adjust the EV for minorities and associates, looking at practical problems encountered, such as loss-making minorities, multiple associates, only some of which are quoted and other real life complications.
We then review some of the more subtle and sophisticated adjustments, such as valuing debt, timing the EV, rolling the EV forward and other complications. For many companies, these are not significant, but sometimes they are the explanation why something LOOKS cheap but isn't really, and these are essential tools in the analyst's armoury.
In our experience, most sell-side analyst are unable to calculate an EV correctly, and the multiples generated by standardised valuation tools are usually inaccurate.
If you don't know how to adjust enterprise value calculations, your analysis will be considerably weaker - this is an essential course for any serious investor, equity analyst or private equity manager.
Stephen (Steve) Clapham has been one of the top analysts in the City of London for over 25 years. A rated analyst at top banks like JP Morgan, Steve moved to become a partner and head of research at two multi-billion hedge funds where he was responsible for hundreds of millions of dollars of investments. Now he brings the benefit of those years of practitioner experience to help you improve your investing and analytical skills.
In 2018, Steve set up his training company, Behind the Balance Sheet, and hundreds of professional investors, regulators and corporate analysts have taken his Forensic Accounting Course. Some of the world's top institutions rely on Steve to help their top analysts improve their skills. That expertise is now available to you!
In 2020, Steve's first book, The Smart Money Method, How to Invest Like a Hedge Fund Pro, was published by Harriman House and immediately went to the number 1 slot in various Investing categories on Amazon in the UK and US. It has been enthusiastically received by investors, both professional and amateur.
PreviewIntroduction to the Topic of Valuation (1:11)
StartBASICS - THEORETICAL BACKGROUND ONLY
StartUseful Valuation Parameters and Calculating EV (7:13)
StartRefining the Valuation for Minorities and Associates (31:03)
StartDebt at Market Value and Stock Options (7:27)
StartOperational Liabilities and Historic vs Prospective (7:38)
StartRolling Forward the EV (8:39)
StartOther EV Tricks (8:13)
StartRecap - Calculating EV (0:40)
StartPutting All This Together
Frequently Asked Questions
This course will teach you all you need to know about calculating Enterprise Value which is a fundamental building block in valuation. Many people rely on Bloomberg and similar systems for their valuation data, which is fine for many companies, but can lead to serious errors for more complex businesses. This course will teach you the tricks that the professionals use to refine their enterprise value calculations, so that you have a better starting point to pick winning stocks.
The course is presented in a simple and easy to understand way, and will give you actionable ideas, and equip you with the tools and techniques to make this a central part of your analytical framework.