Professional equity analysts must contend with a number of strong forces, each pulling in separate but equally relentless directions. Applied Equity Analysis ties these disparate elements into a seamless whole, and presents a clear, complete equity analysis picture.

Written from the working analyst's point of view, in a singularly candid style that is both thought provoking and illuminating, Applied Equity Analysis covers:

• How to think, speak, and develop investment recommendations in the language of Wall Street
• How competitive forces directly impact financial results and, in the process, drive stock valuation
• How to use valuation methodologies designed to quantify the growth and earnings assumptions inherent in speculative stock prices

Applied Equity Analysis emphasizes techniques that work on a day-to-day basis, rather than traditional but often impractical academic approaches. By combining a solid discussion of finance and investment theory with techniques popular among today's buy- and sell-side analysts, it presents a picture of stock investment analysis that is analytically rigorous, aggressively uncompromising, and based on earnings­­the true driving force of Wall Street.

"The equity analyst's job is to present a position, supported by financial and non-financial evidence. Data unnecessary to the argument are, in a word, unnecessary. However, the analyst must understand all the data, relevant or not. The ultimate goal of the equity analyst is the exploitation of any difference between a stock's price and its value."

­­From Chapter 1

Applied Equity Analysis is about understanding all the data. Written by former JP Morgan managing director James English­­an adjunct professor of finance at the Columbia University School of Business, honored by The Wall Street Journal for his stock analysis skills­­this innovative book treats valuation as a practical tool rather than a theoretical exercise. Its integrated approach shows you how to build straight-line connections between a firm's fundamental competitive situation and its stock performance, by combining an understanding of a firm's competitive strengths and weaknesses with accurate financial statement analysis­­to build a more complete model of a firm's future stock market performance

Combining a solid discussion of finance and investment theory with techniques frequently used by working buy- and sell-side analysts, Applied Equity Analysis discusses:

• Specific valuation techniques for identifying stocks that are undervalued relative to their peers
• Quantitative techniques to link a firm's projected future financial performance to its potential future valuation­­based upon the current trading patterns of comparable stocks
• A hybrid valuation technique to mathematically calculate a stock's inherent growth expectations
• A proven strategy for formulating and successfully presenting an investment recommendation
• An entire chapter on the Stern Stewart EVA^TM system as an alternative­­and potentially useful­­way of decoding financial statement information
• Relative and hybrid earnings-based valuation techniques that are more practical than cash-flow methods­­and frequently far superior

On today's Wall Street, equity analysts must focus on a firm's ability to produce returns that exceed capital costs, and then estimate the firm's future power to maintain and increase those returns. Let Applied Equity Analysis supply you with in-depth examples and explanations of Wall Street's most important equity analysis tools­­and give you a hands-on, real-world handbook for equity analysis in today's complex financial marketplace.

Part I: Getting Started.

Chapter 1: A Day in the Life.

Chapter 2: Fundamentals of Equity Valuation.

Chapter 3: Strategy and Competition I: The Firms's External Environment.

Chapter 4: Strategy and Competition II: The Firm's Internal Competitive Resources.

Chapter 5: Fundamentals of Stock Behavior.

Part II: The Basic Tools.

Chapter 6: Reading a Financial Statement: The Accuracy, Sustainability, and Predictability of Financial Information.

Chapter 7: Reading a Financial Statement: The Composition of Returns.

Chapter 8: Reading a Financial Statement: Early-Stage Companies and Investment Capacity.

Chapter 9: Reading a Financial Statement: Later-Stage Companies and the Transition to Maturity.

Chapter 10: Economic Value Added: An Alternative to Traditional Analysis Techniques.

Part III: Financial Models.

Chapter 11: Financial Modeling: Base Case Assumptions and Model Design.

Chapter 12: Financial Modeling: The Income Statement and Balance Sheet.

Chapter 13: Financial Modeling: The Statement of Cash Flows.

Part IV: Equity Valuation.

Chapter 14: Valuation: Foundations and Fundamentals.

Chapter 15: Combat Finance: Relative Methods and Companion Variable Models.

Chapter 16: Hybrid Valuation Techniques.

Chapter 17: The Quirky Price/Earnings Ratio.

Chapter 18: Valuation of Speculative Stocks.

Chapter 19: Equity Analysis and Business Combinations.

Part V: Getting It Down on Paper.

Chapter 20: Financial Writing: Don't Bury the Lead.