Security analysis

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SECURITY ANALYSIS : 

SECURITY ANALYSIS Ganesh Krishna, M.S.Satish Kumar, R.Bharath Kumar, S.Arun, S. Balaji

Security analysis : 

Security analysis Security analysis is about valuing the assets, debt, warrants, and equity of companies from the perspective of outside investors using publicly available information. Security analysis is useful in understanding the fluctuations of prices of securities and behavior pattern of the market.

APPROACH TO SECURITY ANALYSIS : 

APPROACH TO SECURITY ANALYSIS

FUNDAMENTAL ANALYSIS : 

FUNDAMENTAL ANALYSIS It helps investors formulate expectations about the future performance of the company and its stock Fundamental analysis is based on the assumption that the share price is determined by the fundamental factors relating to economy ,industry and company. Fundamental analysis consists of a detailed analysis of the fundamental factors affecting the performance of the company.

TECHNICAL ANALYSIS : 

TECHNICAL ANALYSIS It mainly focuses on internal market data and determines the short term price movements of the securities. It identifies and recognizes the trend that comes to an end when prices start moving in the opposite direction. It can be used as a supplement to fundamental analysis.

CLASSIFICATION OF FUNDAMENTAL ANALYSIS : 

CLASSIFICATION OF FUNDAMENTAL ANALYSIS

ECONOMIC ANALYSIS : 

ECONOMIC ANALYSIS Economic analysis is a study of current and expected future economic conditions. The share price of the company depends upon the performance of the industry and the economy. The future corporate earnings and payment of dividend and interest duly depends on the economic factors.

Economic analysis (contd…) : 

Economic analysis (contd…)

INDUSTRY ANALYSIS : 

INDUSTRY ANALYSIS It is an analysis of homogenous group of firms engaged in similar business. The performance of the company perhaps depends on the performance of the industry to which it belongs. So an industrial analysis should include the fundamental factors affecting the growth prospects of the industry.

Industry analysis (contd..) : 

Industry analysis (contd..)

INDUSTRY ANALYSIS (Contd..) : 

INDUSTRY ANALYSIS (Contd..) Industries are found to be in key sector , core sector and export sector. One must invest in those industries which has demand for a whole year and not seasonally. The correct time to buy shares of a company is during the recovery period so that even a small investor can gain from his investment.

Real Agenda : 

Real Agenda Report card

Company analysis : 

Company analysis It is a study of those variables which influence the future of the company , both qualitatively and quantitatively. Company analysis involves the scrutiny of the company’s financial and non-financial aspects with a view to identify its SWOT. It is also an analysis of the earnings and efficiency of the company and the future prospects of the shareholders.

Company analysis (contd..) : 

Company analysis (contd..)

Real Agenda : 

Real Agenda Report card

RATIOS IN ANALYSING PERFORMANCE : 

RATIOS IN ANALYSING PERFORMANCE Ratios signifies the relationship between two related figures It’s the most appropriate tool to analyze the performance

VALUATION MODELS : 

VALUATION MODELS Valuation models were first laid down by Timbergen and Williams. Valuation models are developed to calculate share prices and to find out the relationship between dividends and interest rates. They were further developed by Dodd, Bodenhorn, Solomon & miller.

VALUATION MODELS : 

VALUATION MODELS TIMBERGEN Model WILLIAM’S Model Stock price varies directly with dividends. Varies inversely with interest rates. P = f(x , y , z) P = share price, x = long term interest rates, y = dividend yield, z = rate of charge. n P = ∑ R1/ (1 +K)t t = 1 p = share price . R1 = expected value of return. K = discount rate.

VALUATION MODELS : 

VALUATION MODELS GRAHAM DODD’S Model EZRA SOLOMON’S Model The dividends of the firm determines market value of the company’s equity. P = M {D + E/ 3} + A p = share price. M = earnings of a company. D = dividend price. E = EPS. A = adjustment for asset values. Market value of a share is the sum of two discounted values. P = V1 +V2 p = market value of the firms share V1 = present value of the earnings from current investments. V2 = present value of earnings of future investments.

TOP GAINERS.. : 

TOP GAINERS..