The Gabelli School of Business offers a three-course secondary concentration in value investing, designed by finance professor James R. Kelly. Students who want to pursue this concentration should take the first course, Introduction to Value Investing, beginning no later than the second semester of junior year.
What is value investing?
Value investing is a time-tested and proven investment methodology that is fundamentally different from conventional security analysis.
It focuses on determining the intrinsic value of a company based on its current and historical balance sheets, income and cash flow statements. The element of future growth is considered a positive characteristic only if it comes from sustainable competitive advantages within the franchise of the company due to the existence of barriers to entry. An investment in a company is worthwhile only if there is a significant margin of safety between the company’s intrinsic value and its market price.
The Discounted Cash Flow (DCF) method, in contrast, is based on discounting future cash flows projected from the current income and cash flow statements back to present value using an appropriate cost of capital. The balance sheet is frequently de-emphasized or ignored in the valuation process.
Structure of the secondary concentration
The value investing secondary concentration for Lincoln Center and Rose Hill students consists of the following three courses:
- Introduction to Value Investing (FNBU 4457)
- Behavioral Finance (FNBU 4458)
- Advanced Topics in Value Investing (FNBU 4459)
Pre-requisite for the introductory course: Financial Management
Co-requisite: Global Financial Statement Analysis
For more information about the value investing program at the Gabelli School, students should see their class dean for prerequisite and course registration information.