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Valuing and Investing in Equities

Name: Valuing and Investing in Equities
ISBN: 9780128138489

1st Edition

CROCI: Cash Return on Capital Investment

3 Reviews

Author: Francesco Curto

eBook ISBN: 9780128138496

Paperback ISBN: 9780128138489

Imprint: Academic Press

Published Date: 16th April 2020

Page Count: 228

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Description

Valuing and Investing in Equities: CROCI: Cash Return on Capital Investment develops a common-sense framework for value investors. By distinguishing investors from speculators, it acknowledges the variety of styles and goals in the financial markets. After explaining the intuition behind due diligence, portfolio construction, and stock picking, it shows the reader how to perform these steps and how to evaluate their results. Francesco Curto illuminates the costs and opportunities afforded by valuation strategies, inflation, and bubbles, emphasizing their effects on each other within the CROCI framework. Balancing analytics with an engaging clarity, the book neatly describes a comprehensive, time-tested approach to investing. Annual returns from this investment approach demand everyone’s attention.

Key Features

Describes the Cash Return on Capital Invested (CROCI) methodology
Provides a step by step approach in building investment strategies
Presents 25 years of insights from CROCI’s valuation and investment results

Readership

Graduate students and professionals working in equities markets, especially in financial trading, company valuations, portfolio construction, and market microstructure

1. Investment and valuation

Section 1: CROCI on valuation
2. Valuing non-financial companies
3. The analytical idiosyncrasies of banks
4. Stock picking based on economic fundamentals

Section 2: CROCI on investing
5. The performance of economic value
6. Value investing and dividends
7. Diversified investments: CROCI real earnings weighted
8. Thematic investments - CROCI intellectual capital

Section 3: Through the looking glass
9. Equities, inflation and valuation
10. Bubbles in equities
11. Odysseus on valuing and investing in equities

Details

No. of pages:: 228

Language:: English

Copyright:: © Academic Press 2020

Published:: 16th April 2020

Imprint:: Academic Press

eBook ISBN:: 9780128138496

Paperback ISBN:: 9780128138489

About the Author

Francesco Curto

Francesco Curto, PhD, Managing Director is the Head of the Research House at DWS and the Head of CROCI® Investment Strategy and Valuation Group at DWS, majority owned by Deutsche Bank (DB) and one of the world's leading asset managers. He and his team joined DWS in 2013 from Deutsche Bank, where CROCI was developed in 1996. He has a vast experience in the financial services industry, having been senior European and global strategist. He has been involved in all the major developments of CROCI® since joining the team in 1998 from Warwick Business School, where he was a Research Fellow. He holds a degree in Business Economics (Economia Aziendale) from "Università di Venezia" and a PhD in Strategic Management from Warwick University. His interests are fundamental valuation, value strategies, politics, economics and the dynamics of industrial and corporate change and he is a regular guest-host at CNBC.

Affiliations and Expertise

Head, DWS Research House Head, CROCI Investment Strategy and Valuation Group, DWS, London, UK.

Reviews

"Francesco Curto makes an incredibly compelling case for CROCI. Anyone interested in stock analysis, fundamental valuation or investing in equities should find a great deal to learn from this book." --Amit Seru, The Steven and Roberta Denning Professor of Finance, Stanford Graduate School of Business

"Valuing and Investing in Equities: CROCI is an essential read for anyone evaluating investment targets worldwide. Its easy-to-understand presentation guides investors in deciphering complex financial statements, normalizing between companies, and discerning an accurate picture of their financial health." --Randy Brown, CIO Sun Life and Head of Insurance Asset Management for SLC Management

Ratings and Reviews

3 Reviews

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Reviews (3)

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Jean-Paul C.

15/02/21

A Must Read for Anyone Investing or Planning to Invest in Equity Markets

Anyone planning on investing in equities or working in financial markets should read this book. The CROCI valuation framework described in it is critical to understanding what investing in equities is about. CROCI focuses on real life investing, where the rubber meets the tarmac.

Valuation frameworks in the fixed income markets where I have spent the last three decades working and investing are inescapably context driven and eventually fall prey to market changes. By contrast the CROCI framework has proved its value through euphoric and pessimistic, dull and obsessed markets alike. Importantly, CROCI produces a quantifiable order in the equities world that most fixed income professionals including me otherwise fail to grasp. CROCI’s actionable results puts the equities markets at the reach of both young and seasoned financial markets professionals.

Dr Curto does a remarkable job at justifying the framework as well as sharing his experience building and managing institutional indices based on it.
At the very least what this book will do is show investors the traps they should avoid when investing in equities and the questions they should ask before committing their capital.

nicolas M.

22/06/20

a critical read

Dr. Curto brings in 20 yrs of experience in valuing equities and the book does a great job at highlighting the concept of CROCI as well as usual traps into which investors may fall in when investing in equities

Markus C.

05/06/20

Outstanding perspective on the concept of valuation in equities

Having spent the better part of 18 years working with CROCI , I can honestly say that investors who do not apply these principles are probably missing the economic reality of company financial statements. Francesco does a splendid job presenting these concepts in a way that is instantly palatable and easily understood. I found myself nodding as I read it as it really is just plain common sense. It is also interesting that such a basic concept - that reported financial statements rarely provide an accurate representation of a company's real economic picture - is so widely accepted by the investment community and yet rarely applied in practice. Hopefully this book will provide the incentive to think outside the box in the future.
"Valuing and Investing in Equities" should be required reading for ANYONE thinking about equity analysis or investment or even those with an anecdotal interest in equity valuation.
I highly recommend this book !

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