How Public Company Valuations Can Affect the Value of Your Business

About the Episode

What is equity research, and how do equity researchers value public companies? What should owners of privately held companies know about equity research? Listen as we take a deep dive into the world of equity research and the process equity analysts use to prepare an equity research report. You will learn everything there is to know about the process of equity research and valuing a public company and how this knowledge will help middle-market business owners. We also cover the difference between investment bankers and equity research analysts and the role each plays in M&A transactions.

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In this Episode

6:45 What is equity research and how are financial models prepared to value public companies?
7:45 How are equity research reports prepared?
11:35 What’s the difference between a small and mid-cap company?
12:25 What should owners of privately held companies know about equity research?
18:10 Do equity analysts become involved in IPOs?
19:05 What is the difference between an investment banker and an equity analyst and what roles does each play?
22:05 Do equity analysts have access to private information when valuing a company?
25:55 Why do analysts have different views on the value of a company if the information is public and available to everyone?
26:45 What’s the difference between valuing a U.S.-based company and an international or global company? What adjustments need to be made to the valuation model?
27:30 How do foreign currency exchange rates affect the value of international companies?
28:45 How many inputs are there in an equity research valuation model?
29:30 “Garbage in — garbage out.” — Why the forecast will only be as good as the inputs.
30:05 Why is discounted cash flow (DCF) rarely used in private M&A transactions?
30:30 How is forecasting done when valuing a publicly traded company?
32:45 Enterprise Value (EV)/EBITDA multiples
33:15 What’s the difference between EBITDA multiples and P/E ratios? Which is preferred?
37:09 What source information (annual report, 8-K, etc.) is used to value a publicly traded company?
40:30 What is free cash flow (FCF) and how is it calculated?
46:45 What measures of cash flow are used to value a company?
49:35 Who are the real customers of equity analysts?
50:05 Why are there more buy than sell recommendations?
52:05 How often are equity research reports prepared?
52:55 How often are earnings (8-K) announced? Do all companies announce earnings on the same date?
56:00 How long does an equity research report take to prepare?
58:15 What are the different types of investors that invest in public companies? And what types of investors read the research reports?
1:02:00 What is ESG (environmental, social, and corporate governance)?
1:06:35 How is ESG affecting the behavior of public companies? How do the behaviors and priorities of U.S. and European companies differ?
1:08:00 Changes in the world (U.S.) come from three places — Washington, Wall Street, and Hollywood.
1:08:15 Do Wall Street investors consider ESG metrics?1:09:50 Does Wall Street listen to the United Nations?
1:11:45 What is corporate development?
1:32:00 What’s it like being a woman in finance?

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Meet Our Guest

Luana Helsinger

Luana Helsinger

Corporate Development at Itafos

Luana Helsinger is a corporate development professional at Itafos with over 10 years of experience in M&As, capital raise, equity research, and equity trading, with a focus on Latin American and US markets. Prior to joining Itafos, Ms. Helsinger worked as an equity research associate at Raymond James, covering international and US oil and gas companies. Previously, Ms. Helsinger was a senior oil and gas analyst and an equity trader at the São Paulo office of Grupo Bursátil Mexicano, an independent Mexican investment and brokerage firm. Each of these roles specialized in Latin American equities. Ms. Helsinger is an MBA Candidate at UCLA Anderson (California, United States) and holds a Masters in Financial Economics from Fundação Getúlio Vargas (São Paulo, Brazil) and a Bachelor of Arts in economics from the Pontifical Catholic University of Rio de Janeiro (Rio de Janeiro, Brazil).

Location Location: California
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