Synopsis
The principles of investing have always been simple: buy low, sell high. The investor who can find the right stocks to buy at the right time will reap the rewards, but the information needed to make these potentially lucrative decisions is often difficult to come by, then hard to decipher, and rely on. This authoritative new book shows that rational, rigorous analysis is still the most successful way to evaluate securities. It picks up where Graham and Dodd's bestselling Security Analysis-for decades considered the definitive word on the subject-leaves off. Providing a practical, up-to-the-minute view, Security Analysis on Wall Street shows how the values of common stocks are really determined in today's marketplace. Proper stock valuation is one of the most challenging tasks in finance, and it has been the subject of continual discussion and debate over the years. As Hooke points out, "Theories abound on the appropriate methodology for establishing valuation, ranging from the quasi-scientific discipline of the 'intrinsic value' believer to the emotional ravings of the anticipation investor.... The market price of any stock thus represents a jumble of contradictory expectations and hypotheses, influenced constantly by investors processing new data and evaluating changing circumstances." Rising above the "jumble," security analysis dictates that the selection of specific stocks for purchase or sale should be based on a rational analysis of investment values. Applied over the long term, in a disciplined manner, this method can produce superior results. Security Analysis on Wall Street takes a revealing look at the complete security evaluation process and its complex inner workings, as well as the major valuation techniques currently being used by Wall Street professionals. Beginning with an overview of the environment in which stocks are issued, researched, bought, and sold, Hooke examines the roles of the various players, the rules of the markets, and the activities surrounding initial public offerings. He then probes the intricacies of analyzing and reporting on securities with proven methods for evaluating the merits of a stock. This sophisticated yet straightforward system enables the investor to assess profitable firms, as well as marginal performers, leveraged buyouts, and corporate takeovers, and-most importantly-to break down different analyses and get the big answers: Is the security fairly valued, and if not, should it be a "buy" or a "sell"? Incorporating dozens of real-world examples, and spotlighting special analysis cases-including cash flow stocks, unusual industries, and distressed securities-this comprehensive resource delivers all the answers to your questions about security analysis on Wall Street.
TheStreet.com for ABCNEWS.com - George Mannes
In the weighty text, Hooke has written a step-by-step explanation of how to analyze stocks and research reports. He takes the reader from basic yardsticks used to judge companies—intrinsic value, relative value and acquisition value—and goes all the way to analyzing stocks in emerging, overseas markets.... Hooke infuses Security Analysis on Wall Street with clear thought and healthy skepticism.... Hooke explains financial pitfalls to avoid, like not confusing growth in companywide revenues and earnings with earnings per share, which is where things ultimately matter to individual stockholders. As with other parts of the book, he cites a specific company.... He also walks through special cases, such as cash-flow stocks, or those companies judged by the cash they generate from operations rather than bottom-line earnings. Others discussed include natural-resource stocks, financial-industry stocks, highly speculative stocks and distressed securities and turnarounds.
A 424-page volume that's priced at $69.95, Security Analysis on Wall Street isn't your average weekend-at-the-beach read. Targeted at serious investors, investment professionals, corporate managers and MBA students, the book isn't as simple a read as a "Ten Stocks to Watch" article you might find in a glossy investment magazine... Whether Hooke will inherit Graham & Dodd's mantle is too early to tell. But for diligent investors, it's a good start.