Applied Equity Analysis: Stock Valuation Techniques for Wall Street Professionals

This book is great if you're in the field of finance. This is not for the average consumer looking for investment advice. I've been in corporate financial planning and analyis for the past five years and always wondered how equity analysts built their models. This books will give you insight into their thinking and also give enough detail to build your own models. I would have rated it five stars if the book included a CD with his examples in Excel. The author does have website where you can download sample models.

Some of the disparaging comments by others prompts me to offer a comment. I believe those who have criticized this book have done so unfairly and out of ignorance. Unfairly because they complain about what is not included. The author accomplished what he set out to do. Out of ignorance because one reviewer quit after 50 pages, he said, so he didn't even read the rest of the book to know what it contains. In other cases, it seems to me that some of the material may be too complex for the average reader to follow, but after all this is a very complex subject.I think the author has done an excellent job of gathering information from a variety of respected authorities, and has summarized the information quite well. This book contains a treasure of insights and practical formulae all in one place. I can see why it is useful as a desktop reference.My copy is so marked up that I just ordered another copy to use in teaching my children these valuable lessons. I wish that I had access to the author's online resources because spreadsheet formats would be very helpful. I would be grateful if anyone can help with this.

I bought this book based on the strong reviews as a complement to Damodaran's classic on valuation, but felt disappointed.To qualify my comments: First, I am not a sell-side analyst, and secondly, I haven't finished the book. After about 50 pages, I threw in the towel.My first stylistic objection to the book is its low content density. There is tremendous repetition and examples are trotted out in excruciating detail, even where the conclusions are fairly obvious. For example, on p. 34: "At competitive equilibrium, the firm can identify no incremental investment opportunities likely to generate returns in excess of capital costs. Competitive equilibrium is often defined as a condition in which investment opportunities generate returns equal to capital costs, but existing investments continue to earn abnormal rates." To me these two sentences are already redundant. But in case you still didn't get it, further DOWN on the SAME PAGE: "...This situation is called economic equilibrium, or economic parity. What does equilibrium mean? When returns are forced down to capital costs, then economic rents and/or abnormal earnings disappear and no further incentive to enter the business exists".But the most frequently repeated point of the first two chapters, is best summed up on p. 19: "As I say many times in the coming pages [and he's not kidding, there], equity analysis is not prophecy; it's opinion. It was never meant to be objective description, but it is strong advocacy." If you're the sell-side analyst, having to "dress up a pig" to help your firm gain some banking business, this book might offer some ideas. But where does this leave the consumer of such analysis? "It's the investor's job to 'diversify' by considering a variety of analysts' positions." (p.9)I think better advice for the investor might be to learn how to perform sound analysis themselves. For that, I recommend Damodaran's book. I lost my faith in this book's intent to provide balanced (let alone predictive) analysis.

English's piece proves to be an excellent introductory book to the world of equity analysis from the perspective of the analyst. The book covers many key areas, and while the depth isn't extensive, the coverage provides a good amount of insight into the key issues.I would strongly recommend this for junior to intermediate levels.

the trick to read this book is to skip all the theoretical part such as competitive equilibrium, EAV stuff, all chapters with the word "regression". Once you know this, this book is a treasure. Where could you find a fully built financial model built by a sellside managing director???

I cannot recommend this book because there are a lot of mistakes in it (page 298). The book also contains no financial model.

This book is really something people can learn from it which is a great experience to read through all this book

I found this book hand wavy and badly written. I learned almost nothing from it. The writing is very vague and confusing.The following stock valuation books are far better:1. "Stock Valuation" by Scott Hoover.2. "Fire Your Stock Analyst: Analyzing Stocks On Your Own" by Harry Domash.

thank you

Seems a bit dated in terms of valuation methodology.