How long is the course?

6 chapters · 26 minutes · level: Advanced

Yes. The course is part of Phase 1 — AK1A's foundation education, which is free forever.

AKM1 · Valuation Methods

Sum-of-the-Parts (SOTP)

Värdera konglomerat och investmentbolag som summan av sina delar — och förstå varför rabatten uppstår.

📖 6 chapters⏱ 26 min⚡ 190 XP⚖ Weight: —🏷 Valuation Methods

Why this variable is decisive

Sum-of-the-parts-analys är avgörande för den svenska retail-investeraren eftersom den avslöjar de dolda värdena i bolag som Industrivärden och Investor, där marknadsvärdet ofta understiger det uppskattade värdet av deras innehav. Denna metodik ger en verktygslåda för att navigera de komplexa strukturerna som präglar svenska investmentbolag och konglomerat, vilka ofta handlas med en rabatt. För den som förstår SOTP öppnas möjligheten att hitta värdeskapande investeringar som annars skulle förbises i en standardanalys.

Course overview

1The basics — why this mattersSum-of-the-parts (SOTP) is one of the most powerful valuation methods for revealing hidden value in complex co…4 min
2Practical applicationPractical application of the SOTP method is a systematic process that requires careful data collection and dis…4 min
3Common pitfalls and mistakesDespite its power, the SOTP method is full of pitfalls that can lead to incorrect conclusions and poor investm…4 min
4AKM1 1.1 integrationIntegrating AKM1 1.1 into the Sum-of-the-Parts analysis requires a methodical approach to valuing complex grou…4 min
5Case studies and examplesCase studies illustrate the practical application of Sum-of-the-Parts analysis with AKM1 1.1 integration in re…4 min
6MasteryMaster analysts use the SOTP method with AKM1 1.1 integration as a strategic tool for navigating complex valua…4 min
Total26 min

Chapter	Focus	Time
1. The basics — why this matters	Sum-of-the-parts (SOTP) is one of the most powerful valuation methods for revealing hidden…	4 min
2. Practical application	Practical application of the SOTP method is a systematic process that requires careful dat…	4 min
3. Common pitfalls and mistakes	Despite its power, the SOTP method is full of pitfalls that can lead to incorrect conclusi…	4 min
4. AKM1 1.1 integration	Integrating AKM1 1.1 into the Sum-of-the-Parts analysis requires a methodical approach to …	4 min
5. Case studies and examples	Case studies illustrate the practical application of Sum-of-the-Parts analysis with AKM1 1…	4 min
6. Mastery	Master analysts use the SOTP method with AKM1 1.1 integration as a strategic tool for navi…	4 min
Total		26 min

Sample — the first two chapters

The basics — why this matters

Chapter 1 of 6 · 4 min

Sum-of-the-parts (SOTP) is one of the most powerful valuation methods for revealing hidden value in complex conglomerates.

The SOTP method breaks a group down into its components and values each segment separately. This is especially relevant for companies with diversified operations, where the whole may be more than the sum of the parts – or the reverse. By analyzing each business area on an individual basis, with an appropriate valuation method for each segment, an analyst can get a more nuanced picture of the underlying value than what a traditional P/E ratio or EV/EBITDA can offer.

The method requires a deep understanding of each individual business, its market, growth potential and profitability. This makes SOTP a time-consuming but extremely valuable analytical method for identifying value that is not visible on the surface.

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For AK1A Research Lab, this is a tool for seeing through over- and undervaluations in complex companies that the market may not fully understand.

Next: Practical application

Practical application

Chapter 2 of 6 · 4 min

Practical application of the SOTP method is a systematic process that requires careful data collection and disciplined valuation.

The process begins with identifying and isolating the different business segments or subsidiaries to be valued. For each segment, an appropriate valuation method is then chosen. A stable, cash-generating subsidiary can be valued with discounted cash flows (DCF), while a fast-growing tech company might be valued with a valuation multiple such as EV/Sales.

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A property company can be valued with a net asset value per share. Each valuation is then performed separately with consideration of the segment's unique risk profile and market outlook.

Once all the individual values have been calculated, they are summed to obtain the total value of the group. This total value is then divided by the number of outstanding stocks to obtain a theoretical value per share. This value is then compared with the current market price to determine whether the stock is overvalued or undervalued.

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For AK1A Research Lab, this means we can present a more robust valuation than what the market offers.

Next: Common pitfalls and mistakes

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Three perspectives

Peter Lynch

Peter Lynch, legendarisk förvaltare av Fidelity Magellan, var en stark förespråkare för att investerare skulle behandla ett holdingbolag som en portfölj av aktier och värdera det därefter. Han menade att om en investerare kunde förvärva en portfölj av högkvalitativa aktier till ett lägre pris än vad de skulle kosta att köpa separat, fanns en tydlig värdechans.

Benjamin Graham

Benjamin Graham, 'värdeinvesteringens far', skulle ha sett SOTP som en metod för att upptäcka 'säkerhetsmarginalen' i komplexa strukturer. För Graham var det avgörande att identifiera den substansrabatten som uppstår när marknaden missbedömmer värdet av en portfölj av tillgångar, vilket skapar en värdeinvestering med en inbyggd buffert.

AK1A's interpretation

På AK1A Research Lab applicerar vi SOTP för att dekonstruera svenska investmentbolag och konglomerat, med målet att kvantifiera de dolda värdena som marknaden ofta ignorerar. Vår metod går bortom den enkla substansrabatten och analyserar varje enskild tillgångs framtida potential, för att ge våra kunder en mer komplett och robust värderingsgrund.

Exercises

Three exercises to anchor the variable — unfold each one for guidance.

Exercise 1. Explain in your own words: what does Sum-of-the-Parts (SOTP) measure, and why does it carry — weight in AKM1?

Explain in your own words: what does Sum-of-the-Parts (SOTP) measure, and why does it carry — weight in AKM1?

Guidance: Värdera konglomerat och investmentbolag som summan av sina delar — och förstå varför rabatten uppstår.

Exercise 2. Application: find one company where Sum-of-the-Parts (SOTP) is strong — and one where it is weak. What separat…

Application: find one company where Sum-of-the-Parts (SOTP) is strong — and one where it is weak. What separates them?

Guidance: Guidance: see chapter 3 ("Common pitfalls and mistakes").

Exercise 3. Reflection: how would your portfolio be affected if your largest holding failed precisely on Sum-of-the-Parts …

Reflection: how would your portfolio be affected if your largest holding failed precisely on Sum-of-the-Parts (SOTP)?

Guidance: Test it in My Portfolio (/min-portfolj) or discuss it in the lab.

Continue the curriculum

Interactive exercises, wave matrices and the AI tutor are found in the lab.

Open AK1A Research Lab See memberships

Related courses in Valuation Methods

Why this variable is decisive

Chapter

Focus

Time

1. The basics — why this matters

Sum-of-the-parts (SOTP) is one of the most powerful valuation methods for revealing hidden…

4 min

2. Practical application

Practical application of the SOTP method is a systematic process that requires careful dat…

4 min

3. Common pitfalls and mistakes

Despite its power, the SOTP method is full of pitfalls that can lead to incorrect conclusi…

4 min

4. AKM1 1.1 integration

Integrating AKM1 1.1 into the Sum-of-the-Parts analysis requires a methodical approach to …

4 min

5. Case studies and examples

Case studies illustrate the practical application of Sum-of-the-Parts analysis with AKM1 1…

4 min

6. Mastery

Master analysts use the SOTP method with AKM1 1.1 integration as a strategic tool for navi…

4 min

Total

26 min