Valuing a stock for a stock pitch

Hi,

I have heard that stock pitches usually come up in equity research summer internship interviews. While I am aware of how to structure the stock pitch itself, I am struggling with how to spot when a stock is undervalued and what methods to use (how does the P/E ration help, etc) - this applies to both looking for one to prepare beforehand but also when at the actual interview, if I am given a factsheet and 30 minutes to prepare a pitch.

Do you have any tips?

2 Comments
 

ER is probably better to ask about this, but the way I would value a stock if I had 30 mins:

  1. Find multiples for industry - what ever info seemed best
  2. Find Growth rates
  3. Calc future Casflows
  4. Apply multiple
  5. Find ROE or Wacc for companies pulled for multiples
  6. Calc ROE and Wacc for stock give to compare to industry
  7. Apply company specific risk for firm
  8. discount Cashflows and let her rip.
  9. (if time) check news headlines and strategy to form story
 
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