Stock Valuation Made Easy

Stock selection is a dilemma for most of the investors. You are unable to understand which stocks to select or what the right way for stock selection is. Going by what you hear, you may buy stocks that can be either overvalued or undervalued.

Being a long-term investor, you may want to hold quality stocks for the future that can help you with long-term wealth creation. But here, picking up stocks randomly does not help.

You need to take a structured approach, and you need to learn the entire psychology of a stock, right from understanding the intrinsic value of the stock to a detailed understanding of each of the components mentioned in the company's financial statements. 

Here, you will also be required to learn the various ratios, and most importantly, you will have to understand the financials of the company. 

There are situations where you research a stock, buy it & hold it as a long-term investment to gain good future returns, but over a period of time, you realise that the valuation of the stock is overpriced. Thereby making your investment decision wrong & you fail to gain the decided returns from that stock. 

However, if you understand the intrinsic value of a stock, you can diversify your portfolio by selecting stocks from fundamentally strong sectors. This will allow you to have a more strategic approach towards investing. 

We have created a stock valuation course to provide you with a strong foundation and rationale for your investment choices. It will give you the skills necessary to understand the market without being influenced by market noise or emotional reactions.

Stock Valuation Made Easy is a self-paced course that will help you identify the fair value of a stock. This course will help you by providing a practical and in-depth understanding of financial statements. At the end of the course, you will be able to understand the value drivers and make decisions unaffected by short-term price changes.

Please find the overview of the topics covered under the course Stock Valuation Made Easy:

Section 1: Decoding the Financial Statements

Topic 1: Understanding the Financial Statements: 

• You will begin by understanding the intricacies of financial statements, which is crucial for investors, analysts, and management. 
• Learn how to create an annual statement, decode the complexities of the balance sheet, and understand the importance of cash flow. 
• Explore real-life examples from the annual reports of sector giants like Reliance Industries, TATA Consumers Limited, and TATA Consultancy Services as your guide.

Topic 2: Accounting Manipulations & Adjustments

• You will then gain an in-depth introduction to accounting manipulations done by the management and learn how to identify them. 
• Explore various expenditure adjustments made to the accounting statement. 

Section 2: Analyzing the Fundamentals of a Company

Topic 1: Factors Determining the Value of a Company

• You will explore the aspects of stock analysis and identify the key factors that affect a company's worth. 
• Understand various approaches, including technical and fundamental analysis, focusing especially on fundamental analysis, where we evaluate the key factors that influence a company's financial stability and growth potential. 
• Understand factors such as profits, sales, debt, and overall economic conditions to determine if a stock is overpriced or undervalued.

Topic 2: Valuation & its Types

• You will understand valuation, its types, and the misconceptions. 
• Learn about the variety of elements, such as financial performance and industry trends, that contribute to valuation.
• Explore the concepts used in financial modelling and calculate them with Excel to predict future values and assess investment opportunities.

Section 3: Understanding the Dividend Discount Model

• You will delve into the Dividend Discount Model (DDM), an essential concept in stock valuation.
• Thoroughly grasp how to build and carry out the DDM effectively, using practical examples, practise sheets, and reference materials primarily focused on key components such as Beta, Dividend, and Return on Equity. 

Section 4: Understanding the Valuation Theories

Topic 1: Relative Valuation Approach

• You will understand the Relative Valuation Theory and how it works. 
• Explore and practice various methods within this approach using the Price to Earning (P/E) Ratio, Price to Book Value Ratio, Price to Sales Ratio and PEG Ratio. 

Topic 2: Discounted Cash Flow (DCF) Approach

• You will explore the Discounted Cash Flow (DCF) approach. 
• Understand significant concepts such as Cost of Capital (CoC), Cost of Equity, Risk-Free Rate, Equity Risk Premium (ERP), and Beta. 
• Wrap up by practicing with reference sheets focused on CoC and ERP, which will help you grasp the concepts better. 

Topic 3: Calculating Discounted Cash Flow

• You will study how to build a Discounted Cash Flow (DCF) Mode.
• Understand the three assumptions of this method. 
• Practice with model sheets and learn to find Sales Growth, Perpetual Sales Growth, and Operating Profit. Additionally, we will analyze the Marico Investor Presentation and HUL Integrated Annual Report.

Section 5: A Case Study on Hatsun Agro Company Valuation

• In this business valuation course, you will also look at various practical case studies. You will first look at the case study of Hatsun Agro Company's valuation. 
• Develop the skills needed to evaluate its projected value through an in-depth analysis.
• This involves understanding economic depreciation, assessing advertising expenditures, calculating borrowing costs, and adjusting capital work in progress. 
• Learn in detail how to estimate key factors like sales growth, profit margins, and the need for reinvestment. 
• Learn to forecast the company's performance using the True Value 1342 approach and analyse Hatsun Agro in-depth.

Section 6: A Case Study on India Tobacco Company (ITC) Valuation

• You will understand a case study that focuses on evaluating the India Tobacco Company (ITC) using in-depth financial modelling. 
• Discover how to calculate the capital employed, forecast sales growth, compute EBIT margins, and examine the capital employed turnover ratio. 
• Determine the crucial metrics of the cost of capital and the cost of equity.
• Using these calculations and insights, you will provide an output based on your study and generate an estimated value report for ITC. 
• Gain practical experience by analyzing ITC's Annual Report for 2021 and refining your skills using the included worksheets.

Section 7: A Case Study on Nykaa IPO Valuation

• You will look at a case study on valuing the Nykaa IPO, offering important insights into the initial public offering (IPO) industry. 
• Learn how to estimate the EBIT margin, calculate capital employed, and determine the cost of capital, all of which are crucial factors in evaluating the value of a company going public. 
• Using these calculations, you will build a thorough model for Nykaa's IPO and produce an estimated value output. 
• By reading through Nykaa's IPO Prospectus and practicing with the given worksheets, you will gain real-world experience.