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Welcome to our online Course on Equity Research Training. Many students and professionals assume that their chances of making an Equity Research career are bleak if they are not from the top tier colleges. However, we have seen industry trends where skilled students and professionals from lesser known colleges making into buldge bracket equity research firms like JPMorgan, Nomura, CLSA, Deutsche Bank, Credit Suisse etc. Unfortunately opportunities to learn such skills in colleges and universities are very limited as they are mostly restricted to the course curriculum that focuses on theoretical aspects than actual practical know-how.
Equity Research Training involves analyzing companies’ equities or stock to find possible investments. Equity research is conducted through studying a composite of financial records, news and interviews with company insiders. It is also known as securities research or Fundamental Analysis. It consist of the sell side research i.e. when research done by analyst are provided to their clients and also buy side research i.e. when analyst do research and use it to invest their firm’s money. The work within Equity research mainly revolves around Financial Modeling Techniques, forecasting, valuations like DCF and Relative Valuations (estimate growth rate and valuations for companies in future)
Equity research and Investment Banking field have many skillsets in common. In this equity research training you will learn the following:
- Advanced Excel
- Corporate Valuations
- Financial Modeling
The above four skillsets are core resources that an analyst must learn. Our Equity Research Training discusses the above skillsets and extends it to include report writing, sector specific financial modeling etc. Our Investment banking course also includes the above four skillsets and additionally includes tutorials on Mergers and Acquisitions, IPO, Fund raising and Pitch Book. This comprehensive course provides an opportunity for students and professionals to learn about both the areas – Investment Banking and Equity Research under this single course. These video tutorials would enable you to learn the necessary skill sets and make you job ready.
The primary skills required for Equity Research Training are as follows –
- Master Microsoft Excel
- Visual Basic or VBA
- Analyst Accounting and Fundamental Analysis
- Equity Valuations like Discounted Cash Flows and Relative Valuations
- Financial Modeling
- Report Writing Techniques
Equity Research Training Approach:
Our Equity Research training learn the detailed practical approach to Equity Research. Below is the Equity Research Training outcome –
1. Prepare Equity Research Model (base)
- Prepare a blank excel sheet with separate Income Statement, Balance Sheet and Cash Flows (starting 2003-04) and use neat formats (remember to use comma style etc and also the color coding)
- Populate the historical financial statements (Income Statement, Balance Sheet, Cash Flows) and do the necessary adjustment for Non-recurring items (one-time expenses or gains).
- Perform the Fundamental Analysis (Ratio Analysis) for Historical years (vertical analysis, horizontal analysis and trend analysis and calculate ROEs using Dupont).
2. Prepare Equity Research Financial Model
- Forecasting of Income Statement (P&L) is most important for analysts. Hence, much of analyst’s time should be devoted on this. For this you need to read through the annual report and other documents to get a solid understanding of how the forecast should be done. It is advisable that one should read through other brokerage house research reports to understand how they have modeled sales numbers.
- Please download annual reports as well as some other reports for peer groups.
- Forecast the financial model for the case study. Please use simple assumptions at this stage since this will be your first ever model on any live company. The idea here should be to get the approach correct.
- Balance the balance Sheet
a. Discounted Cash Flows
- Calculate FCFF as discussed in class and the handbook
- Apply a suitable WACC post the calculation of the capital structure
- Find the Enterprise Value of the Firm
- Find Equity Value of the Firm after the deduction of Net Debt
- Divide Equity Value of the Firm by the total number of shares to arrive at “Intrinsic Fair Value” of the company.
- Do sensitivity analysis of WACC with Share Price
b. Relative Valuations
- Identify the comparables based on the business, Market Capitalization and other filters
- Identify the suitable valuation multiple to be used for this business.
- Use the average valuation multiple to find the valuation of Pantaloon.
- Suggest “Undervalued” or “Over-valued”.
4. Calculate Target Price
- Based on DCF
- Based on Relative Valuations
- Recommend whether to “BUY” or “SELL”
Equity Research Training Course Highlights
- Gaining MS Excel Efficiency – This equity research training in excel typically includes the introduction Excel functions as used by Analyst. An Equity Analyst spends around 10-12 hours a day working on excel doing financial modeling, valuations and financial statement analysis. Additionally, this module covers Graphs & Charts as used by Research Analysts.
- Mastering Analyst Accounting – This includes the understanding of Financial Statement Analysis. The typical approach to financial analysis includes professional measures like Vertical Analysis, Horizontal Analysis, Ratio Analysis. However, before the calculation starts, the key challenge is to get the right data from various sources. For example for sourcing financial numbers, we may source it from Annual Reports, SEC websites etc. Additionally, the ratio analysis done on wrong set of numbers will lead to results which will mislead the analysis. Hence, as an analyst the primary challenge is to fetch the right data. Our main focus in Analyst specific Accounting is “Identify the Shenanigans”.
- Economics – This module is very important from the perspective of understanding the external environment that affects the company analysis. For example exchange rates, commodity prices, GDP growth rates, interest rates, IIP Numbers, Non-farm Payroll data etc.
- Corporate Finance – In this module you will learn important concepts of Corporate Finance like Time Value of Money, Payback, Internal Rate of Return, Modified Internal Rate of Return, Net Present Value and Cash Flows. These topics are important from the point of view of Equity Research Training.
- Valuations – Equity Valuation is the process of estimating the potential market value of a financial asset or liability. Valuations are required in many contexts including investment analysis, capital budgeting, merger and acquisition transactions, financial reporting, taxable events to determine the proper tax liability, and in litigation. We will do valuations using two methods (a) Intrinsic Valuation Method (DCF) which means primarily determines the value by estimating the expected future earnings from owning the asset discounted to their present value (b) Relative value models determine the value based on the market prices of similar assets.
- Financial Modeling for Equity Research – Financial Modeling includes professionally forecasting future financial statements like Income Statements, Balance Sheets & Cash Flows. Firstly we apply financial modeling forecasting techniques on a hypothetically built-up case. Thereafter we will apply the same methodology on a live company for analysis.
- Equity Research Modeling different Sectors – We may look at the application of Equity Research in various sectors beyond the case study. Here we have taken two live examples –
- IT Sector Equity Research Modeling and
- Education Sector Equity Research Modeling
The idea here is to apply all the learning and come up with a recommendation as BUY/SELL in these LIVE companies
Equity Research Training Advantages
- HD Video Equity Research tutorials and animated presentation
- Online Mock Tests, Practice Tests, Quizzes and Games
- Step by step guides to Equity Research, Equity Research presentations,
- Training Material prepared by Equity Research Analysts and Equity Brokers
- Formula Cheat-Sheets
- Instant feedback on the performance through online Equity Research quizzes
Who is this course for?
- Any student with a graduation degree (Engineers, Science graduates, commerce students, Arts students)
- CFA and FRM Candidates
- Masters in Finance, MBA in Finance
- Charted Accountants
- Employees in equity research broking firm – sales, research etc;
- Employees in consulting firms
- Passion to learn
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