Regardless of experience level, investing in equities can be both exciting and daunting, particularly in today's rapidly changing financial landscape. On April 6, 2023, the NYU School of Professional Studies (NYU SPS) Division of Programs in Business, Finance and Taxation hosted a webinar entitled “Navigating the World of Equities: Insights and Strategies for Investing in Stocks.”
Moderator and adjunct faculty , Ashish Kohli welcomed panelists Ankit Agrawal, Delia Price, and Raghav Behani, who have experience in diverse facets of equity research, asset management, and investment banking. They discussed the factors investors use to identify a great company and other insights and perspectives they examine before investing in equities.
Price highlighted some of the ways to invest in equities, including mutual funds, direct equities, and options. She also talked about the types of equities that can be included in a portfolio, such as Large Cap (market cap over $10B), Mid-Cap (market cap between $2B and $10B), Small-Cap (market cap between $300 million and $2 billion), and International equities.
When looking for a stock to invest in, Kohli advised attendees to ask not just whether it is a great company, but whether it’s a great company at a good price. Agrawal addressed how he identifies a “great company.” He prefers “to focus on finding the right industry” where there is “a lot of growth happening” and then “go on to finding the right company.” He said the key is to look for megatrends because the most money is made when the change delta is the largest.
Once companies within the industry are identified, Agrawal advises creating a framework for assessing them: “You need to identify competitive advantages that companies can have.”. These are cost advantage, surge cost, switching cost, and network effects. Next are the culture, products, operations, and strategy of the companies. Here, he looks for Prudent Capital Allocation and Scalability Enablers. Next comes management, which encompasses the vision, talent, passion, focus, integrity, ethics, and reputation of the company’s management.
Behani addressed the common valuation methods used by research analysts, asset managers and investment bankers to determine if a price was reasonable. These are discounted cash flow analysis and comparable company analysis valuation. He also highlighted the challenges of valuing companies. DCFs have many moving parts, so small changes have significant impacts. For comparable company analysis, the challenge is finding the appropriate comparable company.
The department of Finance and Taxation offers continuing education courses and 8 certificate programs in finance and a 30-credit MS in Financial Planning. The graduate program can be completed in as little as one year of full-time study, prepares students for financial planning jobs. The program offers two concentrations in Behavioral Finance and in Financial Analytics, which meet the needs of clients who are more tech-savvy than ever and who are interested in ensuring their personal financial choices are both good for them and for society.