Security Analysis module (BU41004)
Students will learn a range of techniques and models that are used by investors to analyse security performance and evaluate which shares to buy or sell.
Investors need to decide on what shares to buy or sell when selecting securities for their investment portfolios. This module examines the different approaches to share valuation which investors can adopt when deciding on the shares to include in, or exclude from, their portfolios.
- fundamental analysis where shares are valued using financial statement data
- technical analysis where share are valued using price and trading volume indicators
- theoretical analysis based on academic models.
It will also study how new issues of shares are priced in the stock market.
What you will learn
In this module, you will:
- learn about how shares are analysed in practice and the different types of information used to value shares
- learn about the approaches to identifying undervalued and overvalued shares, and trading strategies are outlined to exploit any security mispricing.
The performance of different trading strategies are analysed based on prior research about investor practice.
By the end of this module, students will:
- understand the theoretical basis underpinning security analysis;
- value shares using a number of techniques with accounting and other information;
- evaluate international research about the valuation of shares in practice;
- critically synthesise information from a number of sources about how securities are valued in practice.
Assignments / assessment
The coursework comprises of the following:
- A multiple choice test (20%) in Week 11
- A final exam (80%) in Week 12
Teaching methods / timetable
There will be three 1-hour sessions every week.
These sessions are divided into:
There will be one lab session where students will be introduced to the Bloomberg platform.
|1||Introduction to share valuation|
|2||Recent developments in fundamental analysis|
|3||Technical approaches to share valuation|
|4||Empirical evidence about the profitability of trading strategies|
|5||A comparison of technical analysis and fundamental analysis|
|7||Theoretical approaches to share valuation: Capital Asset Pricing Model|
|8||Theoretical approaches to share valuation: Arbitrage Pricing Theory|
|9||Evidence the ability of theory to help analyse securities|
|10||The pricing of new equity issues|
|11||The pricing of seasoned equity offerings|
This module is available on following courses: