lec12-securityAnalysis-3pp

lec12-securityAnalysis-3pp - Fin406 Spring 2010 Smeal...

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Fin406 – Spring 2010 Smeal College of Business Penn State University 2/22/2010 ©2010 JingZhi Huang 1 Lecture 12 – Security Analysis Fin 406 - Spring 2010 Professor Jingzhi Huang Smeal College of Business Penn State University Copyright © 2010 JZH Motivation Evaluate Performance Trade Security Selection Asset Allocation Define Objectives and Constraints Develop Market Expectations •Fixed Income •Options •Equity Fundamental Analysis Technical Analysis Quantitative Analysis 2 Fundamental analysis: using economic and accounting info to predict stock price changes The top-down approach Economic analysis: both global and domestic Industry analysis: the competitiveness of the industry Company analysis: Detailed strategic and financial analysis of the firm I. Security Analysts “Buy side” analysts – work for institutional money managers such as mutual funds, hedge funds, pension funds, and insurance companies Unregulated “Sell side” – work for securities firms Need to pass the Research Analyst examination (the 3 Series 86 and 87 exams) Regulated by the SEC, and NASD and NYSE Independent – work for firms which sell research to sell-side and/or buy-side firms, but who do not themselves engage in securities transactions Unregulated
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Fin406 – Spring 2010 Smeal College of Business Penn State University 2/22/2010 ©2010 JingZhi Huang 2 Analyst’s Responsibility Usually cover one industry and follow 20~30 companies in that industry Write research reports on specific companies Typically 4~8 pages 4 Make recommendations to institutional
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This note was uploaded on 04/06/2010 for the course FIN 100 taught by Professor Staff during the Fall '08 term at Penn State.

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lec12-securityAnalysis-3pp - Fin406 Spring 2010 Smeal...

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