+7 925 966 4690, 9am6pm (GMT+3), Monday – Friday
ИД «Финансы и кредит»

JOURNALS

  

FOR AUTHORS

  

SUBSCRIBE

    
Economic Analysis: Theory and Practice
 

Assessing the investment potential of issuing companies in conditions of the stock market dynamics

Vol. 22, Iss. 3, MARCH 2023

Received: 24 November 2022

Received in revised form: 15 January 2023

Accepted: 28 January 2023

Available online: 30 March 2023

Subject Heading: INVESTMENT ANALYSIS

JEL Classification: C53, C58, G11, G17

Pages: 504–520

https://doi.org/10.24891/ea.22.3.504

Evgenii V. DOROKHOV Lomonosov Moscow State University, Moscow, Russian Federation
e.v.dorokhov@mail.ru

https://orcid.org/0000-0001-7869-4530

Subject. Based on the developed procedure for fuzzy valuation of shares of issuing companies, the article considers topical issues related to forecasting their investment potential in conditions of stock market dynamics.
Objectives. The purpose is to assess the investment potential of issuing companies for various scenarios of their development.
Methods. The study rests on methods of analysis of economic phenomena and processes, systems approach to reviewing the development of issuing companies, estimation and prediction of their economic activities. It applies the fuzzy logic theory and the efficiency theory, the method of analogies, statistical processing of factual material, the comparative and expert analysis.
Results. The developed methodology includes the formation of scenarios for companies’ development based on their financial and economic projections in the form of fuzzy numbers. I constructed membership functions of the initial fuzzy financial and economic indicators. The paper provides projected fuzzy estimates of the value of shares of the issuing company and its investment potential for the selected fuzzy financial and economic indicator and forecast scenario. The methodology was tested on the case of model forecast scenarios for ExxonMobil development.
Conclusions. The presented methodology enables a forecast assessment of investment potential based on the database of quotations and financial and economic indicators of issuing companies. The predictive assessment is made within the formed fuzzy forecast scenario of the company's evolution in accordance with trends in the development of internal and external risk factors.

Keywords: stock market, issuing company, investment potential, predicted share price, fuzzy number

References:

  1. Burkanov A.O. [Analysis of investment attractiveness of high-tech companies with small capitalization of "unicorns" before the IPO]. Innovatsii i investitsii = Innovation and Investment, 2018, no. 7, pp. 11–15. URL: Link (In Russ.)
  2. Lakhmetkina N.I. [Investment potential as fundamental term of investment process]. Finansovaya analitika: problemy i resheniya = Financial Analytics: Science and Experience, 2011, no. 4, pp. 17–20. URL: Link (In Russ.)
  3. Tarasov A.V., Shlyachkov N.S. [Defining investments risk and return based on company development potential estimation]. Ekonomika i upravlenie = Economics and Management, 2010, no. 11, pp. 75–81. URL: Link (In Russ.)
  4. Alekseev M.A., Sukhonenko V.D. [Assessment of the investment attractiveness through the analysis of the information space of the financial market]. Vestnik Voronezhskogo gosudarstvennogo universiteta. Seriya: Ekonomika i upravlenie = Proceedings of Voronezh State University. Series: Economics and Management, 2019, no. 4, pp. 133–139. URL: Link (In Russ.)
  5. Malov D.N. [Evaluation of investment attractiveness on the basis of VAR, ARIMA, and risk assessment]. Innovatsii i investitsii = Innovation and Investment, 2019, no. 1, pp. 153–159. URL: Link (In Russ.)
  6. Pupentsova S.V., Titov A.B., Livintsova M.G. [Evaluation of the enterprise investment attractiveness under uncertainty and risk]. Vestnik Volzhskogo universiteta im. V.N. Tatishcheva = Vestnik of Volzhsky University after V.N. Tatischev, 2020, vol. 2, no. 1, pp. 210–218. URL: Link (In Russ.)
  7. Tyutyukina E.B., Danilov A.I., Abrosimova O.M. [Assessment of Investment Attractiveness of High-Tech Companies]. Vestnik Universiteta, 2020, no. 11, pp. 165–173. (In Russ.) URL: Link
  8. Rossokhin V.V. [Analysis of approaches to the fundamental valuation of shares]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2008, no. 6, pp. 56–62. URL: Link (In Russ.)
  9. Fernandez P. Valuation Methods and Shareholder Value Creation. Academic Press, San Diego, CA, 2002.
  10. Demidenko T.I., Brichka E.I. [Problematic aspects of the practical application of the discounted cash flow method in the company’s value assessment]. Finansovye issledovaniya = Financial Research, 2019, no. 4, pp. 247–257. URL: Link (In Russ.)
  11. Minasyan V.B. [Assessment of risks arising from the use of multiplier technology to assess the shares]. Finansy: teoriya i praktika = Finance: Theory and Practice, 2018, vol. 22, no. 3, pp. 124–135. URL: Link (In Russ.)
  12. Campbell J.Y., Shiller R.J. Stock Prices, Earnings, and Expected Dividends. The Journal of Finance, 1988, vol. 43, iss. 3, pp. 661–676. URL: Link
  13. Shiller R.J. Irrational Exuberance. Princeton University Press, Broadway Books, 2005, 304 p.
  14. Dorokhov E.V. [Enhancement of the System of Statistical Indicators for Assessing the State and Prospects of Development of the Stock Market]. Voprosy statistiki, 2022, vol. 29, no. 1, pp. 17–27. (In Russ.) URL: Link
  15. Engle R.F., Lilien D., Robins R. Estimating Time Varying Risk Premia in the Term Structure: The ARCH-M Model. Econometrica, 1987, vol. 55, iss. 2, pp. 391–407. URL: Link
  16. Nelson D. Conditional Heteroskedasticity in Asset Returns: A New Approach. Econometrica, 1991, vol. 59, iss. 2, pp. 347–370. URL: Link
  17. Sentana E. Quadratic ARCH Models. The Review of Economic Studies, 1995, vol. 62, iss. 4, pp. 639–661. URL: Link
  18. Bera A.K., Higgins M.L., Lee S. Interaction Between Autocorrelation and Conditional Heteroscedasticity: A Random-Coefficient Approach. Journal of Business & Economic Statistics, 1992, vol. 10, iss. 2, pp. 133–142. URL: Link
  19. Nedosekin A.O. Nechetkii finansovyi menedzhment [Fuzzy financial management]. Moscow, Audit i finansovyi analiz Publ., 2003, 103 p.
  20. Orlovskii S.A. Problemy prinyatiya reshenii pri nechetkoi informatsii [Decision-making problems with fuzzy information]. Moscow, Nauka Publ., 1981, 208 p.
  21. Markowitz H.M. Portfolio Selection. The Journal of Finance, 1952, vol. 7, iss. 1, pp. 77–91. URL: Link
  22. Zadeh L.A. Fuzzy Sets. Information and Control, 1965, vol. 8, iss. 3, pp. 338–353. URL: Link90241-X
  23. Kaid V.A.A. [Methods construction membership function of fuzzy sets]. Izvestiya YuFU. Tekhnicheskie nauki = Izvestiya SFedU. Engineering Sciences, 2013, no. 2, pp. 144–153. URL: Link (In Russ.)

View all articles of issue

 

ISSN 2311-8725 (Online)
ISSN 2073-039X (Print)

Journal current issue

Vol. 23, Iss. 4
April 2024

Archive