I have picked a few companies on my research list that are helping me make my 2026 to be meanigful. There are a few companies under my coverage in the first half of the year, which are Paylocity, Gartner, and Broadcom. There are no specific reasons related to how "longable" or "shortable" they are; the only reason that I want to pick these companies is that I want to understand their business models in order to gain my skills in researching public companies from different industries, which means I will need to understand their revenue build and to build financial models then process to the valuation part. For the second half of the year, to understand the banking industry or to pick one "bank" as my case study is also included in the plan. The value of the financial service companies is not generated from their Income Statement but from their Balance Sheet. It sounds boring, and indeed, it is...You don't generate alpha by buying bank stocks... As ...
We can use public available data of companies within the same industry to make our trading comparable by using EV multiple like EV/EBIT, EV/EBITDA. We are going to calculate the similar companies' equity value, looking at its diluted shares outstanding as well as options restricted stock units, then understand how to work over the bridge to calculate the EV. Once we got the EV, we want to turn it into EV multiple like EV/EBIT to make comparable analysis. EV & EBIT joined together, the higher the EBIT, the higher the EV; Price & EPS joined together, the higher the EPS, the higher the price: In terms of multiple, we want to understand what is its value driver and what does it drive? For P/E ratio, the value driver is the denominator, which is the EPS that drives the value - the share price. the value driver should be consistent with value number. Meaning it should stick with EPS, which is driving the value. We can't say the value is driven by the revenue since there are ...