How good are equity valuation models in predicting stock prices?

This paper aims to test the accuracy of three well-known equity valuation models for the period 1990 to 2006. This was done to a sample of German listed firms which diverge from the US market in accounting standards, market maturity and corporate governance culture (bank-based in contrast to the market-based US regime) as well as different market movements and trends which influence main input factors and estimations (e.g. market risk premium, inflation rate and GDP growth rate). To the best of our knowledge this is the first paper to address this issue for a sample of listed firms from the largest bank-based European economy.Using different accuracy measures such as absolute prediction error (average, median and central tendency) as well as multiple regression analysis the results show that dividend discount and abnormal earnings models ten to provide better accuracy than the free cash flow approach. Additionally, we find evidence of the importance in German accounting standards in the less accurate performance of the abnormal earnings model compared to previous studies due to the conservative accounting and the influence of hidden reserves. Finally, we did not find any significant valuation differences regarding the alternative values used for growth and discount rates

A Study of Equity Valuation Models: Evidence from German Companies

This paper aims to test the accuracy for the period 1990 to 2006 of three well-known equity valuation models. This is done to a sample of German listed firms which diverge from the US market in accounting standards, market maturity and corporate governance culture as well as differing market movements and trends which influence main input factors and estimations. To the best of our knowledge this is the first paper to address this issue for a sample of listed firms from the largest bank-based European economy. Using different accuracy measures such as absolute prediction error (average, median and central tendency) the results show that dividend discounted and abnormal earnings models tend to provide better accuracy than the free cash flow approach. Additionally we find evidence of the importance of German accounting standards in the less accuracy performance of the abnormal earnings model compared to previous studiesdue to the conservative accounting and the influence of hidden reserves. Finally we did not find any significant valuation differences regarding the alternative values used for growth and discount rates

Tissue environment, not ontogeny, defines murine intestinal intraepithelial T lymphocytes

Tissue-resident intestinal intraepithelial T lymphocytes (T-IEL) patrol the gut and have important roles in regulating intestinal homeostasis. T-IEL include both induced T-IEL, derived from systemic antigen-experienced lymphocytes, and natural T-IEL, which are developmentally targeted to the intestine. While the processes driving T-IEL development have been elucidated, the precise roles of the different subsets and the processes driving activation and regulation of these cells remain unclear. To gain functional insights into these enigmatic cells, we used high-resolution, quantitative mass spectrometry to compare the proteomes of induced T-IEL and natural T-IEL subsets, with naive CD8(+) T cells from lymph nodes. This data exposes the dominant effect of the gut environment over ontogeny on T-IEL phenotypes. Analyses of protein copy numbers of >7000 proteins in T-IEL reveal skewing of the cell surface repertoire towards epithelial interactions and checkpoint receptors; strong suppression of the metabolic machinery indicating a high energy barrier to functional activation; upregulated cholesterol and lipid metabolic pathways, leading to high cholesterol levels in T-IEL; suppression of T cell antigen receptor signalling and expression of the transcription factor TOX, reminiscent of chronically activated T cells. These novel findings illustrate how T-IEL integrate multiple tissue-specific signals to maintain their homeostasis and potentially function