How to develop conviction around valuation/catalyst/"differentiated view" portion of pitch? A lot of it seems wishy-washy.
Not recruiting for HFs, but wanted to ask this for my own learning:
As far as a public equity pitch goes, I have no issues identifying a strong, differentiated company with good business model and financial fundamentals. However, I struggle a lot with developing conviction around the portion of the pitch where I explain why a stock is currently mispriced, and what the catalyst will be to correct that.
As far as valuation, a lot of the pitches I've seen have seemed vague in this section. They'll use phrases like "the market is unfairly punishing __ for ___", but how can such a claim be made without material information that others don't have? In asserting that an equity is mispriced, should you mainly rely on your model? If so, why would your model be more correct than the market's view unless you have material, differentiated data? If you're not relying on a model, how can we even quantify to the point of suggest it's mispriced?
Additionally, I have difficulty thinking of meaningful catalysts (in the absence of having information on an event that will happen), excluding arguing that an earnings beat will be the catalyst.
TL;DR: I find it pretty straight forward to identify/evaluate an attractive business, but I find it hard to develop or substantiate a "differentiated" view from the market to argue that an equity is currently mispriced and that there will be a catalyst to fix that mispricing.
Any advice is appreciated, thank you.