Value Investing and Fundamental Stock Analysis

Introduction to this section and an outline as to why creating long-term investment portfolios matters now more than ever for all generations, particularly the current millennial workforce.

Now more than ever, individuals being able to create long-term investment portfolios matters. The Pension time bomb is  being fueled by an increasing pension liability deficit in most countries, an ever aging population and the low interest rate environment of the past decade.

What extent of control and influence you are willing to take in making and managing your stock investments? What must you consider in costs and fees in deciding whether to go with investing in a professionally managed fund or building your own individual stock portfolio?   

In this lecture, we look at why trading is completely different from investing, and why the value of reinvested dividends over a longer-term investment horizon can make an exponential difference.

A brief look at the difference between a growth or momentum investment approach, versus a value-driven investment approach. Although this course focuses on the latter, both are important approaches but originate from very different schools of thought. It can be very destructive to adopt both approaches at the same time.

A quick introduction to the section, as a way to make students comfortable with dealing with ‘scary’ financial sections and instead to look at them as a record of data they will find useful in assessing the health and investment prospects of any company.

An introduction to publicly listed company financial statements, and a look into its key Income Statement, Balance Sheet and Cash Flow Statement sections.

This lecture breaks down the key definitions and components of the Income Statement, allowing the student to understand how company sales, expenses and profits are calculated and illustrated in company accounts.

The lecture highlights the three main components of the Balance Sheet - Assets, Liabilities and Shareholder Equity - and their connection and subsections, all needed in understanding the company's financial position at a given point in time.

This lecture looks at the key components and calculations within the Cash Flow Statement and its Operating activities, Investing Activities and Financing Activities sections

A brief mention of other financial statement sections any investor should be aware of when reviewing financial statements, such as Auditor's Letters, Summary Notes accompanying the financial statement sections and Chairman & CEO Letters.

Following the understanding gathered from the last section on financial statements, how can we use this knowledge to identify undervalue stocks? What key ratios must we employ in understanding what undervalued and overvalued stocks are?

In this lecture we introduce and define each of the main valuation ratios required to screen and compare stocks when building a portfolio of undervalued listed companies to invest in.

Following the introduction of key valuation ratios, we look at key steps required to screen company stocks and metrics to identify undervalued yet financially attractive stocks to invest in.

In this lecture, we briefly summarise all we have covered so far and bring it together to carrying out an example case study on a listed stock and how we can analyse it as an undervalued investment opportunity.

We carry out a valuation analysis on an example listed company from start to finish and include the steps covered in collecting data from financial statements, calculating the key valuation ratios and taking a step by step approach in screening for important criteria every strong investment should meet.

In this final lecture we look at the theory of diversification; helpful tips from the Sage of Omaha's approach and key reflections that all value investors should keep to hand.

Closing remarks from the course instructor on the understanding, tools and practical experience students will now have to shape their financial and investment future...to the benefit of themselves, their families and communities.