Prof. Hanke and colleagues at the Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise developed a method and metric for the valuation of companies that trade on organized exchanges. Their analytical approach begins by manually constructing a company’s balance sheet and income statement from the past five years (or more) using primary data filed with the Securities and Exchange Commission (SEC). These data are used to develop a discounted cash flow model for a company via our proprietary Discounted Cash Flow Methodology (P-DCF).
Monte Carlo simulations are used to generate distributions of a company’s prospective cash flows and to determine the probabilities that its share price will move up or down. Proxy statements are analyzed to determine if management is incentivized to implement policies that will enhance shareholder value and move a company’s share price in the direction suggested by the probabilities determined by the Monte Carlo simulation exercises.
The studies conducted by Prof. Hanke and his colleagues can be found in the Studies in Applied Economics working paper series.
- Constable, Simon. “Identifying Drive is Critical to Job Retraining Initiatives.” Web log post. PJMedia.com PJ Media, 28 February 2018.
- Constable, Simon. “Simonomics On When Trade School Meets Wall Street.” Web log post. Ozy.com. Ozy, 18 January 2016.
- Crowe, Portia.”Skip the MBA and get this credential instead” Web log post. BusinessInsider.com. Business Insider, 11 May 2015.
- Crowe, Portia.”Inside the Johns Hopkins finance class that’s ‘guaranteed’ to get you a job on Wall Street.” Web log post. BusinessInsider.com. Business Insider, 9 May 2015.
- Effing, Anthony.”This Johns Hopkins Professor Can Guarantee You a Job in Finance.” Web log post. Bloomberg.com. Bloomberg, 21 April 2015.
- SAE./No.35/May 2015: “PDF Document: Professor Hanke’s Atelier: Reflections on the “Bullpen” and Raphael’s Workshop” by Alexis Dawson Gaillard