HOLT is a value-based, return on capital framework proprietary to Credit Suisse. HOLT provides an objective view of over 20,000 companies in 65 countries worldwide using a rigorous methodology that examines accounting information, converts it to cash and then values that cash. The HOLT corporate performance framework is derived from the adjusted income statement and balance sheet data that converts cash-based measure of performance that more closely approximates the underlying economics of the business. The corporate performance framework is the foundation for the HOLT valuation model - an objective, long-term valuation discounted cash flow model. Embedded in the valuation model is a company specific life-cycle framework, which forecasts baseline long-term patterns of change in economic returns and growth, using empirical research on how thousands of companies with similar characteristics have performed in the past.
Key HOLT Principles
The HOLT framework is built upon a foundation of clean data, free of accounting distortions. Fundamental analysts make some accounting adjustments - HOLT makes all of them (and then some) for all of the stocks in the HOLT database. Sample accounting issues for which HOLT makes adjustments include: inflation, financing and capital structure decisions (including financial subsidiaries and operating leases), depreciation methods, treatment of non-operating investments, revaluation of assets, write-downs/write-offs, R&D capitalization, special items, inventory valuation methods, acquisition goodwill, fair-value markup to acquired plant, pensions, special reserves, stock compensation expense, and regional- and industry-specific conventions.
For more information on Credit Suisse HOLT please see the following: http://www.credit-suisse.com/ib/en/holt/index.html