Course Description

This module in the Everyday Investing Series will help the protege answer one of the fundamental questions asked when analyzing a stock and ultimately determining whether to buy or sell it, which is determining whether the current stock price is cheaper or more expensive than its underlying value. There are a variety of ways to answer this question and the module will look several of the more established methods.

The protege will also be introduced to a series of value drivers that can assist in the determination of whether a company is creating positive Economic Profit or tangible wealth for its shareholders. Assessing this capability is an important factor in determining it's underlying intrinsic value.

Estimated Course Length: 3 hours 30 minutes (not including tutorial)

Math-i-ness Factor: (1=No Math, just concepts, 10=breakout the spreadsheets and calculators)

10 - The math intensity factor is pretty over the top in this module, however we've developed some templates that can take the edge off! Deep breadths! You'll be fine!

Investment Coach and Founder - Sage Investors

Aman Raina, MBA

Aman's passion for investing was crystallized when he got his first job working at the Toronto Stock Exchange in the time when the trading floor still existed. He was on the floor on that fateful afternoon when Bre-X traded from $10 to 50 cents within milliseconds. Working in that environment, he motivated himself to elevate his knowledge of investing beyond the Finance textbooks he read in university. Alas, he was disappointed to find a lack of credible and unbiased investment information available, so in the true spirit of an Outlier, he refined and practiced his known skills in programming and financial analysis to develop a database of Canadian investment research using a unique model (Economic Profit). Malcolm Gladwell would be proud.He founded AKR Capital Research and began providing portfolio managers and individual investors with independent investment research. Over the years, he has been switching his focus away from institutional clients because frankly, they really don't need any help. They will make their money no matter what happens. The group that Aman has seen requiring the most assistance is the average retail investor, who after several stock market meltdowns are now empowering themselves to take control of their portfolios and investments. They are looking for someone to coach them to elevate their financial literacy so they can maneuver and synthesize the mountain of investment information to separate noise from value and leverage this information through analysis to make informed and successful investment decisions. They are not looking for PhD explanations. They are not looking to be talked down and shunned like second-class citizens by financial institutions. Aman has gained much more satisfaction helping these hard working people.It is within this backdrop and after taking some time off to complete his MBA that he has molded AKR Capital Research into Sage Investors, which uniquely specializes in investment coaching and independent portfolio analysis services.Sage Investors is based out of Toronto, Canada

Course curriculum

  • 1

    Introduction and Administrative Items

    • Administrative Items

    • Download Course Materials

    • Module 5 - Podcast

    • Introduction

  • 2

    The Value of a Stock Is Worth...

    • Slide 1

  • 3

    Framework Of Investing

    • Slide 2

  • 4

    Components of Value Creation

  • 5

    Net Operating Profit Less Applicable Taxes (NOPLAT)

    • Slide 4

  • 6

    Net Operating Profits Less Applicable Taxes (NOPLAT) - Continued

    • Slide 5

  • 7

    Net Operating Profits Less Applicable Taxes (NOPLAT) - Continued

    • Slide 6

  • 8

    Invested Capital

    • Slide 7

  • 9

    Invested Capital - WinPak

    • Slide 8

  • 10

    Invested Capital - WinPak (Continued)

    • Slide 9

  • 11

    Invested Capital - WinPak (Continued)

    • Slide 10

  • 12

    Cost of Capital

    • Slide 11

  • 13

    Cost of Capital: Ingredients/Variables

    • Slide 12

  • 14

    Components of Cost of Capital

    • Slide 13

  • 15

    Cost of Debt

    • Slide 14

  • 16

    Cost of Equity

    • Slide 15

  • 17

    Putting It All Together: Cost of Capital

    • Slide 16

  • 18

    Cost of Capital: WinPak

    • Slide 17

  • 19

    Cost of Capital: WinPak (continued)

    • Slide 18

  • 20

    Cost of Capital: WinPak (continued)

    • Slide 19

  • 21

    Cost of Capital: WinPak (continued)

    • Slide 20

  • 22

    Cost of Capital: WinPak (continued)

    • Slide 21

  • 23

    Impact of Capital Structure on Risk

    • Slide 22

  • 24

    Variables Which Can Impact Cost of Capital

    • Slide 23

  • 25

    Back of the Envelope Calculation

    • Slide 24

  • 26

    Cost of Capital Adjusted: WinPak

  • 27

    Economic Profit

    • Slide 26

  • 28

    Economic Profit: WinPak

    • Slide 27

  • 29

    Economic Profit: WinPak (continued)

    • Slide 28

  • 30

    Economic Profit

    • Slide 29

  • 31

    Taking Stock

    • Recap

  • 32

    Measuring Intrinsic Value of Firm

    • Slide 30

  • 33

    Earnings Multiple Approach

    • Slide 31

  • 34

    Earnings Multiple Approach (continued)

    • Slide 32

  • 35

    Earnings Multiple Approach (continued)

    • Slide 33

  • 36

    Discounted Cash Flow Valuation

    • Slide 34

  • 37

    Discounted Cash Flow Valuation (continued)

    • Slide 35

  • 38

    DCF Valuation: WinPak

    • Slide 36

  • 39

    DCF Valuation: WinPak (continued)

    • Slide 37

  • 40

    DCF Valuation: WinPak (continued)

    • Slide 38

  • 41

    DCF Valuation: WinPak (continued)

    • Slide 39

  • 42

    DCF Valuation: WinPak (continued)

    • Slide 40

  • 43

    DCF Valuation: WinPak (continued)

    • Slide 41

  • 44

    DCF Valuation: WinPak (continued)

    • Slide 42

  • 45

    DCF Valuation: WinPak (continued)

    • Slide 43

  • 46

    DCF Valuation: WinPak (continued)

    • Slide 44

  • 47

    DCF Valuation: WinPak (continued)

    • Slide 45

  • 48

    DCF Valuation: WinPak (continued)

    • Slide 46

  • 49

    DCF Valuation: WinPak (continued)

    • Slide 47

  • 50

    DCF Valuation: WinPak (continued)

    • Slide 48

  • 51

    DCF Valuation: WinPak (continued)

    • Slide 49

  • 52

    DCF Valuation: WinPak (continued)

    • Slide 50

  • 53

    Valuation Template Tutorial

    • Valuation Template

  • 54

    Mergers and Acquisitions

    • Slide 51

  • 55

    What Do We Know Now?

    • Slide 52

  • 56

    Homework

    • Slide 53

  • 57

    Final Thoughts

    • Final Thoughts

  • 58

    Tutorial: Financial Analysis Template

    • Template Download

    • Tutorial-Part 1

    • Tutorial-Part 2

  • 59

    Tutorial: Cost of Capital Calculator

    • Download - Cost of Capital Calculator

    • Tutorial - Cost of Capital Calculator

  • 60

    Module Evaluation

    • Feedback

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