Equity Valuation Flashcards
(60 cards)
Alpha
An excess risk adjusted return
Fair Market Value
The price at which an asset would change hands when neither has a compulsion to buy/sell. Both participants are informed.
Investment Value
Value of an asset specific to an individual investor
Absolute Valuation Model
Model that tries to specify an asset’s intrinsic value
Asset Based Valuation
A type of absolute valuation model that values a cpmpany on the basis of the assets or resources it controls.
Relative Valuation Model
Values assets in realtion to other assets
Pairs Trading Strategy
Investing in a pair of similar stocks, shorting the overvalued and buying the undervalued one.
Conglomerate Discount
The idea that companies that operate in multiple, unrelated industries have are priced at a discount to businesses with a narrower focus.
Blockage Factor
Price that could be realized if shares of a large bloack were sold in smaller blocks that do not have a liquidity discount.
Present Value Model
Single Period Dividend Discount Model (DDM)
Mulitple Period Dividend Dicount Model (DDM)
Gordon Growth Model
Perpetuity
Value as a function of a No-Growth Company + PVGO
P/E Formula as a function of No-Growth Company + PVGO
Justified (Fundamental) P/E
P/E that is justifed from a fundamental analysis (like Gordon Growth Model)
Leading P/E
Trailing P/E
Two Stage DDM
H-Model
Sustainable Growth Rate
ROE Formula (Basic)
(Three way) Dupont Analysis of ROE
