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383038: Security Analysis
MGMT-X 433.02

  • Fall 2021
  • Section 1
  • 4 Credits
  • 09/21/2021 to 11/30/2021
  • Modified 09/17/2021

Meeting Times

This course takes place fully online with weekly live web conference meetings on Tuesday evenings, 6:00 pm to 9:00 pm PT.

Description

This updated, rigorous, and exciting course examines companies and industries using a fundamental and timeless classical approach first developed by Benjamin Graham in 1934. Instruction focuses on the examination of equities and bonds by taking an in-depth look at the financial statements concentrated on the income statement, balance sheet, cash flow statement, and financial notes. The tools and techniques used are as relevant today as they were when Graham first developed the basis for value investing. Through case study analysis of actual companies, students learn the tenets of value investing, ratio analysis, and industry analysis. This course draws on subsequent editions of Graham's classic, Security Analysis, considered by many professional investors to be the best book written on fundamental analysis.

Objectives

The objective of this rigorous course is to prepare students to analyze and identify profitable investment securities.

Students will become proficient in analyzing complex securities

Students will understand the necessary components of fundamental investment analysis

Outcomes

Upon completion of the course the successful student will be able to

  • analyze stocks, bonds, and alternative investments to determine if they warrant an investment
  • Students will be able to write a professional research report on a company equivalent to the level of a junior analyst
  • Students will gain knowledge and skills that will help them prepare for Level 1 of the CFA exam
  • Students will gain a fundamental understanding of how analytical work is performed in investment banks.

Materials

Security Analysis

  • Author: Benjamin Graham and David Dodd
  • Edition: 6th
  • ISBN: 10-0071592539

Required

The Intelligent Investor

  • Author: Benjamin Graham
  • Edition: 4th

Required

Deliverables

At the end of the course the student is expected to complete a final project that represents the culmination of the work and study of this course. It is expected that the quantity and quality of the project be at the level of a junior analyst at a major investment bank.

Evaluation

Criteria

Types of evaluations and related weights
Type Weight Topic Notes
Midterm examination 20%
Final Project 50%

Project must be the kind and quality of what a junior security analysts would produce at a large investment bank.

Class and Canvas discussion board participation 30%

Since this is a online discussion and learning experience each student's participation is critical in order to maximize the value of the course.

Breakdown

A= 90%-100%

B= 80%-90%

C=70%-80%

F= Below 70%

Pass students: C or better on midterm, Complete project and attend 80% of all classes

Audit students: No written work required

Course Policies

Collaboration and attendance

  • Students are expected to participate in group, class,  and team discussions and work projects
  • Students are expected to attend at least 80% of all class sessions
  • Students are expected to complete all written work on a timely basis.

Institutional Policies

Student Conduct

Students are subject to disciplinary action for several types of misconduct or attempted misconduct, including but not limited to academic dishonesty, such as cheating, multiple submission, plagiarism, or knowingly furnishing false information to the University; or behavioral misconduct, such as theft or misuse of the intellectual property of others, harassment, or disruption of the learning environment. Students are encouraged to familiarize themselves with the Student Rights & Responsibilities Policy and to report concerns regarding at: https://www.uclaextension.edu/pages/str/studentConduct.jsp.

Services for Students with Disabilities

In accordance with the Americans with Disabilities Act of 1990, UCLA Extension provides appropriate accommodations and support services to qualified applicants and students with disabilities. These include, but are not limited to, auxiliary aids/services such as sign language interpreters, assistive listening devices for hearing-impaired individuals, extended time for and proctoring of exams, and registration assistance. Accommodations and types of support services vary and are specifically designed to meet the disability-related needs of each student based on current, verifiable medical documentation. Arrangements for auxiliary aids/services are available only through UCLA Extension’s Service for Students with Disabilities Office at (310) 825-7851 or by email at [email protected]. For complete information see: https://www.uclaextension.edu/pages/str/studentswithDisabilities.jsp

Incompletes

Your instructor may post the interim grade Incomplete/I if at the end of the class your overall work is of passing quality but a portion could not be submitted for understandable reasons (e.g. illness). It is your responsibility to petition your instructor for permission to submit work late and to provide an explanation, and it is his or her sole decision whether to accept the explanation. If permitted, the Incomplete/I grade will be posted and a time frame defined for you to submit the missing work, ranging from one to twelve weeks. Incomplete/I grades that remain unchanged after twelve weeks will lapse to F, NP or U. Receiving an I grade entitles you to submit only the missing work your instructor has agreed to accept late, and does not allow other work to be retaken or oblige UCLA Extension to provide continuing access to course materials via Canvas. The Incomplete/I grade is not an option for courses that do not bear credit, such as 700, 800, or 900-level courses. For complete information, see: https://www.uclaextension.edu/pages/str/grading.jsp

All Grades are Final

No change of grade may be made by anyone other than the instructor, and then, only to correct clerical errors. No term grade except Incomplete may be revised by re-examination. The correction of a clerical error may be authorized only by the instructor of record communicating directly with personnel of Student and Alumni Services.

Sexual Harassment

The University of California is committed to creating and maintaining a community where all individuals who participate in University programs and activities can work and learn together in an atmosphere free of harassment, exploitation, or intimidation. Every member of the community should be aware that the University prohibits sexual harassment and sexual violence, and that such behavior violates both law and University policy. The University will respond promptly and effectively to reports of sexual harassment and sexual violence, and will take appropriate action to prevent, to correct, and when necessary, to discipline behavior that violates our policy.

All Extension students and instructors who believe they have been sexually harassed are encouraged to contact the Department of Student and Alumni Services for complaint resolution: UCLA Extension, 1145 Gayley Ave., Los Angeles, CA 90024; Voice/TTY: (310) 825-7031. View the University’s full Policy on Sexual Harassment and Sexual Violence at http://policy.ucop.edu/doc/4000385/SHSV.

Additional Items

Protecting Privacy and Data During Live Instruction

Live meeting sessions for this class, when applicable, are being conducted over Zoom. As the host, the instructor may be recording live sessions. Only the host has the ability to record meetings, no recording by other means is permitted. Recorded sessions will be posted in the Videos area of this class unless otherwise notified. Due to privacy, recordings are not available for download and are only accessible via Canvas for the duration of the class. If you have privacy concerns and do not wish to appear in the recording, do not turn on your video and/or audio. If you also prefer to use a pseudonym instead of your name, please let the instructor know what name you will be using so that the instructor knows who you are during the session. To rename yourself during a Zoom meeting, click on Participants, click on your name, click on More, click on Rename. If you would like to ask a question, you may do so privately through the Zoom chat by addressing your chat question to the instructor only (and not to ""everyone""). Additionally, chat may be used and moderated for live questions, and saving of chats is enabled. If you have questions or concerns about this, please contact the instructor via Canvas Inbox.

Pursuant to the terms of the agreement between Zoom and UCLA Extension, the data is used solely for this purpose and Zoom is prohibited from re-disclosing this information. UCLA Extension also does not use the data for any other purpose. Recordings will be deleted when no longer necessary. However, recordings may become part of an administrative disciplinary record if misconduct occurs during a video conference.

Course and Instructor Evaluation

UCLA Extension values your feedback on course and instructor evaluations. We ask all students to take a few minutes to complete an end-of-course evaluation survey. Updates to the course and instruction are influenced by your feedback. Understanding your student experience is essential to ensure continuing excellence in the online classroom and is appreciated by your instructor and the UCLA Extension academic leadership.

Your participation in a survey is voluntary, and your responses are confidential. After instructors submit grades, they will be given an evaluation report, but this report will not contain your name.

About Your Online Course Materials

Please note the following about online course components at UCLA Extension:

  • Students must have basic computer skills, including the use of word processing software, email, and the ability to use internet browsers, such as Safari, Firefox, or Chrome.
  • Students are responsible for meeting the technical requirements of Canvas and familiarizing themselves with the Canvas Learning Management System.
  • Students are responsible for keeping a copy of all assignments and work submitted, and to be aware of all assignments, due dates, and course guidelines.
  • Students are encouraged to keep and/or download a local copy of their assignment files, as access to the online environment of a specific course is limited to 30 days after the final course date, as listed in the course catalog.

    If you need assistance downloading student materials from your course, please contact Canvas Support or the UCLA Extension Learning Support Team.

UCLA Extension Canvas and Learning Support

For immediate 24/7 Canvas technical support, including holidays, click on Help (located on the menu to the left) where you can call or chat live with a Canvas Support representative.

UCLA Extension Instructional Design and Learning Support
The UCLA Extension Learning Support staff assists both students and instructors with Canvas-related technical support, as well as general and administrative questions.

Learning Support staff is available Monday through Friday, from 8 AM to 5 PM (Pacific Time), except holidays:

Campus Safety Escorts

For students taking classes held on the UCLA campus and in and around Westwood Village, the UCLA Police Department provides a free walking escort service every day of the year from dusk until 1 a.m. Community Service Officers (CSOs) are available to walk students, faculty, staff members and visitors to and from anywhere on campus, in Westwood Village, and in the village apartments. CSOs are uniformed students who have received special training and are employed by the UCLA Police Department. To obtain an escort, please call (310) 794-9255 and allow 15 to 20 minutes for your escort to arrive. For complete information, see: https://www.ucpd.ucla.edu/services/community-service-officers-csos/evening-escorts

Schedule

 

When Topic Notes
Week 1
09/21/2021 
6:30 PM - 9:30 PM

Introduction and the Role of Information

Read Security Analysis pages 39-112

Lecture
Week 2
09/28/2020 
6:30 PM - 9:30 PM

Ratio Analysis and the One Pager

Electronic spreadsheet will be provided to each student for this exercise

Lecture
Week 3
10/05/2021 
6:30 PM - 9:30 PM
Ratio Analysis Part II and the Income Statement

Continuation of ratio analysis. Download  2020 Oil-Dri Corporation 10K.

Lecture
Week 4
10/12/2021

6:30PM - 9:30 PM

The Income Statement

Read Pages 409-520 in Security Analysis

Read Chapter 1-3 in Intelligent Investor

Download Archer Daniels Midland (ADM) 2020 10K

Lecture and team work
Week 5
10/19/2021 
6:30 PM - 9:30 PM

The Balance Sheet

Valuation Exercises

Read pages 535-591 in Security Analysis

Download Archer Daniels Midland Consolidated Balance Sheet for team and class discussion. www.adm.com

Lecture
Week 6
10/26/2021
6:30 PM - 9:30 PM

Non reoccurring earnings and balance sheet adjustments

Discounted Cash Flow

Review value line handouts passed out in previous class

Read Chapter 12 in the Intelligent Investor


Week 7
11/2/2021
6:30 PM - 9:30 PM

Strategy and Industry Analysis

Review and discuss Michael Porter 5 forces model

Review and discuss Porter's generic model

Review and discuss Value Net model

Review and discuss Resource based model

Discuss Cedars Sinai Case study

Lecture
Week 8
11/19/2021 
6:30 PM - 9:30 PM
Fixed Income Investments

Read Security Analysis Pages 141-152

Lecture
Week 9
11/16/2021 
6:30 PM - 9:30 PM

Alternative Investments

Read Intelligent Investor Chapter 4-6

Review American Airlines Case

Download Potlatch Corp 2020K and review

Lecture and Group Discussion
Week 10
11/23/2021 
6:30 PM - 9:30 PM

 

Final Presentations