Reading 44: Market-Based Valuation: Price and Enterprise Val 2011, investment, management, database, screens

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Session 12: Equity Investments: Valuation Models
Reading 44: Market-Based Valuation: Price and Enterprise Value Multiples

LOS t: Explain the use of stock screens in investment management.

 

 

An analyst queries a database of 10,000 stocks based on values of P/E, P/B, EV/EBITDA. The query output is a list of stocks which meet the criteria. This is most commonly referred to as:

A) a stock screen.

B) a multi-phase analysis.

C) the relative valuation method.

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A stock screen applies a filter to a broad universe of stocks and responds with a list of only those stocks which meet the criteria.

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An analyst uses a database program to select all companies that meet the following characteristics:

• P/E between 6 and 24
• Earnings growth over last 3 quarters.
• P/B less than 4.

This is an example of:

A) momentum investing

B) the prudent investor rule.

C) a stock screen.

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A stock screen searches a database and selects only those stocks which meet the specified criteria.

土豆妮

An analyst is using a custom computer program to apply several criteria to the broad universe of stocks. The program output is a list of stocks which meet the criteria. This is most commonly referred to as:

A) a stock screen.

B) a multi-phase analysis.

C) the relative valuation method.

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A stock screen applies criteria to a broad universe of stocks and responds with a list of only those stocks which meet the criteria.