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Valuing and Investing in Equities: CROCI: Cash Return on Capital Investment [Minkštas viršelis]

2.40/5 (5 ratings by Goodreads)
(Head, DWS Research House
Head, CROCI Investment Strategy and Valuation Group, DWS, London, UK.)
  • Formatas: Paperback / softback, 228 pages, aukštis x plotis: 229x152 mm, weight: 360 g
  • Išleidimo metai: 19-Nov-2020
  • Leidėjas: Academic Press Inc
  • ISBN-10: 0323899242
  • ISBN-13: 9780323899246
Kitos knygos pagal šią temą:
Valuing and Investing in Equities: CROCI: Cash Return on Capital InvestmentDidesnis paveikslėlis
  • Formatas: Paperback / softback, 228 pages, aukštis x plotis: 229x152 mm, weight: 360 g
  • Išleidimo metai: 19-Nov-2020
  • Leidėjas: Academic Press Inc
  • ISBN-10: 0323899242
  • ISBN-13: 9780323899246
Kitos knygos pagal šią temą:
Pastovi nuoroda: https://www.kriso.lt/db/9780323899246.html

Valuing and Investing in Equities: CROCI: Cash Return on Capital Investment develops a common-sense framework for value investors. By distinguishing investors from speculators, it acknowledges the variety of styles and goals in the financial markets. After explaining the intuition behind due diligence, portfolio construction, and stock picking, it shows the reader how to perform these steps and how to evaluate their results. Francesco Curto illuminates the costs and opportunities afforded by valuation strategies, inflation, and bubbles, emphasizing their effects on each other within the CROCI framework. Balancing analytics with an engaging clarity, the book neatly describes a comprehensive, time-tested approach to investing. Annual returns from this investment approach demand everyone’s attention.

Recenzijos

"Francesco Curto makes an incredibly compelling case for CROCI. Anyone interested in stock analysis, fundamental valuation or investing in equities should find a great deal to learn from this book." --Amit Seru, The Steven and Roberta Denning Professor of Finance, Stanford Graduate School of Business

"Valuing and Investing in Equities: CROCI is an essential read for anyone evaluating investment targets worldwide. Its easy-to-understand presentation guides investors in deciphering complex financial statements, normalizing between companies, and discerning an accurate picture of their financial health." --Randy Brown, CIO Sun Life and Head of Insurance Asset Management for SLC Management

Foreword xv
Preface xvii
Acknowledgements xxi
Introduction xxiii
1 Investment and valuation
1(10)
The challenge of the real equity investors
1(1)
The fundamentals of equities investing: capital and returns
2(2)
The two sides of the investment process in an equation
4(1)
The many names associated with the components of the investment equation
4(1)
The many ways of presenting the investment equation
5(1)
The dark and the bright sides of valuation and how they drive price changes
6(2)
Modelling earnings into perpetuity and the relative challenges
8(3)
Section 1 CROCI on valuation
2 Valuing non-financial companies
11(28)
The price-to-earnings ratio: what you see is not what you get
12(1)
The shortfalls of accounting valuation are well known, or are they?
13(1)
The invisible hand at work in valuation
14(1)
Two wrongs do not make one right: risk premia and EV/EBITDA
15(1)
Sector and country risk premia
15(2)
Other valuation ratios are not the solution for real investors
17(1)
How using accounting data also creates problems for portfolio construction
17(1)
Gazprom: why valuation was not attractive after it was adjusted
17(3)
Nothing new -- Coca Cola and Exxon in the 1980s
20(1)
CROCI as a form of due diligence to assess the value of companies
21(3)
Moving from a reported to an investment basis
24(1)
A peek at our due diligence process
25(1)
The impact of such adjustments on valuation of sectors and regions
26(1)
Some examples of adjustments and their impact on valuation
27(2)
Amazon
29(1)
Celgene
30(2)
Deutsche Lufthansa
32(2)
Tokyo Electric Power (TEPCO) - a painful due diligence process
34(5)
3 The analytical idiosyncrasies of banks
39(14)
Banks, an important sector filled with valuation ambiguities
39(2)
CROCI and banks
41(1)
The creation of a CROCI banks model
42(1)
The postcrisis financial reforms -- Basel III
43(1)
After Basel III
44(1)
Difficulties in covering the insurance subsector
45(1)
CROCI's adjustments to the valuation of banks
45(3)
The impact of our adjustments on valuation and terms of comparison with nonfinancial companies
48(2)
Epilogue: banks and the financial crisis
50(3)
4 Stock picking based on economic fundamentals
53(26)
The challenges of looking at the future
54(2)
Stock analysis based on price, earnings and the discount rate
56(1)
The discount rate -- the dark side of valuation
57(1)
How to think about the discount rate
57(2)
How the discount rate defines the market level and its changes
59(1)
How changes in the discount rate affect the economy
59(1)
Earnings isolines
60(2)
The bright side of valuation
62(1)
Step 1 Economic earnings and implied economic earnings
63(1)
Step 2 The drivers of earnings, capital and return
64(1)
Step 3 How the market has valued the company historically Value/returns analysis
65(2)
Step 4 Estimating upside/downside to fair price
67(1)
Conclusions
68(11)
Section 2 CROCI on investing
5 The performance of economic value
79(16)
How index providers address the concept of value in the market
80(1)
The CROCI approach to value
81(1)
Risk-adjusted PIE as a measure to adjust for type B value traps
82(3)
A Fama and French test on the performance of value using CROCI data
85(1)
Regional results confirm the strength of the CROCI value factor
86(1)
Value investing using CROCI
86(2)
CROCI's value approach is markedly different to conventional value
88(3)
The risks of concentrated value investment strategies
91(1)
Investment and portfolio construction
92(1)
The CROCI `a la Buffett' approach to systematic investing
93(1)
The CROCI systematic benchmark aware approach
94(1)
A la Buffett or benchmark aware?
94(1)
6 Value investing and dividends
95(10)
Dividend is an important component of your total equity return
95(1)
Dividends ought to be important in a low-growth environment
96(1)
High dividend yield strategies do not give exposure to attractively valued stocks
97(2)
Building an economic approach to a dividend yield strategy
99(1)
Filter effectiveness
100(3)
Performance review, sectors and regional characteristics
103(1)
Conclusions
104(1)
7 Diversified investments: CROCI real earnings weighted
105(12)
Market cap-weighted indices do not serve Real Investors well
105(1)
The Real Investor and the Efficient Market Hypothesis
106(1)
Fundamental weighting -- the challenge is in the implementation
107(1)
Earnings is the preferred fundamental weighting factor
108(1)
Weighting by book (or operating assets) does not give exposure to real value
108(1)
Fundamental weighting and growth
109(4)
CROCI Real Earnings Weighting - methodology, operational characteristics and performance
113(2)
Conclusion
115(1)
Appendix
115(1)
Sector weights and valuation at the peak of the 2000 bubble
115(2)
8 Thematic investments -- CROCI intellectual capital
117(32)
The rising importance of intellectual capital in the investment world
118(1)
The new economy is driving growth
119(2)
The rise of the intangible economy
121(2)
Weak revenue growth for the average listed stock
123(1)
Asset-light companies have delivered higher earnings growth
124(1)
Only companies with intangible assets have been able to generate earnings growth recently
125(2)
Share price performance has followed earnings growth
127(1)
Intangible intensity not a driver of performance
128(1)
Intangible intensity is not a driver of stock performance
128(1)
Earnings growth reflect underlying macroeconomic changes
129(1)
The labour-light economy and the decline of middle-skilled labour
130(1)
Technology is polarising the job market and is changing the structure of the economy
130(1)
The increasing importance of brands within the economy
131(1)
CROCI intellectual capital
132(1)
The valuation conundrum
132(2)
Investment strategy for the knowledge driven economy
134(1)
Performance, sector and regional characteristics
135(1)
Operational characteristics and an evolutionary conclusion
136(1)
Conclusion
137(1)
Appendix
137(1)
Why investors cannot ignore intangible assets11
137(1)
There is wide evidence for the relevance of intangible capital
137(1)
CROCI treats intellectual capital as a genuine asset
138(2)
Capitalising intangibles can substantially alter profitability
140(2)
Capitalising intangibles and the economics of sectors
142(2)
Intangibles in financials
144(5)
Section 3 Through the looking glass
9 Equities, inflation and valuation
149(22)
How inflation affects valuation - a model based approach
150(3)
Companies with different profitability and capital intensity will be affected in a different way by inflation
153(1)
Earnings growth in line with inflation, when inflation is rising, actually translates into falling EBITDA margins
153(1)
The inflation cost of tax
154(1)
The inflation cost of inventories to investors
155(1)
Rising inflation and the banking sector: different sector, same dynamics
155(1)
The illusion of value and the shortfalls of P/E and P/BV
156(4)
Evidence confirms the hypotheses on how inflation impacts valuation
160(1)
Data on cash earnings is limited to early 1980s
160(1)
A recap of how inflation affects accounts and valuation
161(3)
Implications for economists and academics
164(2)
Appendix
166(1)
Real life examples from the early 1980s of how inflation distorted valuation
166(5)
10 Bubbles in equities
171(12)
Introduction
171(2)
Bubbles seen through CROCI's lens
173(4)
Bubbles can result in boom and bust cycles
177(2)
Equity bubble at the end of 2018 and implications
179(4)
11 Odysseus on valuing and investing in equities
183(6)
Twenty years of CROCI fundamental analysis in four pages
184(1)
Investors
184(1)
The investment process
185(1)
Due diligence
185(1)
Valuations
186(1)
Accounting-based valuations
187(1)
Investment strategies
187(2)
Bibliography 189(2)
Index 191
Francesco Curto, PhD, Managing Director is the Head of the Research House at DWS and the Head of CROCI® Investment Strategy and Valuation Group at DWS, majority owned by Deutsche Bank (DB) and one of the world's leading asset managers. He and his team joined DWS in 2013 from Deutsche Bank, where CROCI was developed in 1996. He has a vast experience in the financial services industry, having been senior European and global strategist. He has been involved in all the major developments of CROCI® since joining the team in 1998 from Warwick Business School, where he was a Research Fellow. He holds a degree in Business Economics (Economia Aziendale) from "Universitą di Venezia" and a PhD in Strategic Management from Warwick University. His interests are fundamental valuation, value strategies, politics, economics and the dynamics of industrial and corporate change and he is a regular guest-host at CNBC.