So, in a couple of months, I will be applying for work and I want to have done a company analysis by then. I want to do a fundamental analysis of the firm. I have the knowledge from Level 2 and I want to apply as much of that as I can into this presentation.
What I want to know is how do I present this; the format, structure and important points that would need to be or should be highlighted. I have never done this before. I dont even know if I am asking the right question.
ER for now, well atleast this question pertains to BS ER. Either way, my intention is to have something prepared in case they ask me for some kind of practical application or experience which in reality I have none of.
Use difference valuation models to find intrinsic value. Clearly state your assumptions (growth rates, required return, assumed capital structure, etc). Make adjustments for non-recurring/special cases that show you understand the business. Point out strengths and weaknesses of each scenario. Clearly state your chosen value, and compare with current price. Look at historical fundamental ratios in relation to current trailing and forward P/Es, and make recommendation on buy/sell/hold. I did something like this for a hedge fund interview back in 2009. I wish I knew back then what (I think) I know now.
This, but touch on the relative value stuff lightly, if you want to get in a technical conversation, I would focus on Free Cash, then some qualitative only type stuff like Porter’s Five Forces (although not too deliberately. Forensic Accounting/ Accounting Red Flags not bad to discuss in piggy backing on the adjustments for non-recurring, off balance sheet stuff too if it comes up naturally.