Our Research Methodology
Equity Research
Our investment research team covers over 500 stocks, producing four reports annually on each company. At the center of our equity research is our methodology, combining top-down and bottom-up analysis designed to provide you with the key elements that determine the real value of a company.
We begin with Rigorous Fundamental Analysis incorporating economic, industry and company data to construct our forecast assumptions of the stock and its sector. We scrutinize all publicly available information including SEC Filings and company transcripts, while also examining customers, suppliers and competitors to gain often overlooked insights into a company.
The Intrinsic Value of the stock is then carefully determined by:
•modeling the company’s future earnings
•understanding the company’s cash flow and the forces, which impact it
•providing a consistent, disciplined valuation framework based on discounted free cash (DCF)
We also look at the Relative Valuation of the security, assessing current and historical metrics in addition to industry comparables. The combined valuation methods tell us whether the stock is fairly valued and if the market has fully incorporated all of the relevant news (good and bad) into the share price.
Our Economic Profit Analysis also provides the key information needed determine each company’s ability to create wealth for shareholders. Here, economic data is used to as a basis for constructing and evaluating asset valuations relative to returns on those assets.
Finally, Continuous Research Coverage on the stocks in our universe helps us to monitor the key valuation drivers and evaluate events, which may impact value over time.
Quantitative Reports:
BOE offers quantitative equity research ratings on 4000 companies. Our quantitative ratings are based on an advanced academic study of investor behavioral biases that cause the mispricing of securities.
Our reports consist of “Buy Alerts” and “Sell Alerts” highlighting the most critical, action items. We score stocks according to a four-point system incorporating long-term contrarian factors and short-term momentum factors. These include:
•PE to Growth (PEG) rankings
•Fundamental momentum (based on estimate revisions)
•Relative strength
•Shareholder value creation (based on earnings above the cost of capital)
By summarizing this data into a weighted, “Back-tested” composite score, we then rank the equities according to their “Alpha” generating abilities.
Our process enables us to quantitatively grade any security from which we develop our alerts and reports. Many of our clients use our quantitative reports to stimulate new investment ideas that we confirm with fundamental research.
Our Products
BOE offers the following research services to meet your firm's unique investment needs:
•Written reports - We provide quarterly company, industry, and sector specific reports, including and thematic reports, earnings previews and reviews. Our research covers both the U.S. and Indian markets.
•Management Access Program– BOE provides with access to C-level management in one-on-one client meetings.
•Interactive financial models – We have interactive and customizable models that allow you to input a your own financial assumptions.
•Customized Research Services: At your request, BOE can provide qualitative and quantitative analysis on current and historical metrics, economic indicators, demographic trends, sectors, industries and competitors. We also perform merger and LBO analysis.
We often provide the groundwork information for research, saving our clients valuable time. Some clients that conduct internal quantitative analysis choose BOE to provide fundamental research. Our analysis thus becomes a resource that can either confirm or refute the manager’s internal assessments.
Other clients call on BOE to provide unique research inputs and hard-to-find insights (buried within a 10K or transcript, for example) that feed into their financial models.
