Final Project
The Final Project must be submitted on Canvas by Thursday, April 30th, at 11:59:00pm. Late assignments will not be accepted.
Select any publicly traded companyand perform the same type of analysis you’ve been doing.Do not select a company currently in the SMIF and do not select a companyyou’vestudied this semester. Then post your company on the Discussion board on Canvas. Do not select a company that another student has already selected.
Your final product will be 5 reasons why you would buy the stock and 5reasons why you wouldn’t buythe stock. Please number your answers.
A correct answer must have the following:
1) Snapshots from your source (from ratios, pricing models, financials, 10-K, earnings call...). This will be how you cite your information. No other citing is needed.
2) Paragraph discussingwhat we’re seeing. You’re basically just a reporter of what is happening.For example, we’re noticing an increase in debt ratios or a drop in revenue.
3) Paragraph explainingwhat we’re seeing. For example, if ratios don’t look good, explain
why. If earnings are rising, explain why. Be sure to give company specific reasons. We wouldn’t just say,“debt levels are rising which means the company is borrowing.”Instead, explain why the debt levels are rising. What are the new funds being used for?
As another example, we wouldn’t say,“the company is opening a factory in Brazil. This is good because it represents global expansion.”Instead, we would want to know why the company is expanding to Brazil. Does the company have a customer base in Brazil? Are there supply chain advantages in Brazil? Is there cost savings? Again, be sure to give company specific examples and explanations.
4) Paragraph forecasting what will happen in the future. All current information is already reflected in the stock price. So your analysis must be forward looking. You should also be critiquing. For example, provide a forecast for revenue and explain your reasoning. Again, this needs to be company specific. Your position should be substantiated with company specific data.
Each answer should contain your opinion.There is no right or wrong opinion. But all opinions must be rooted in policies, strategies and data.
Guidelines:
a) If you are using pricing models, use at least 3. Together, that would be one reason (i.e. pricing models is one reason).
b) If you are using technical analysis, use at least 2 methods. Together, that would be one reason (i.e. technical analysis is one reason).
c) If you are using ratios, use at least 3 ratio categories. Together, that would be one reason (i.e. ratios is one reason).
The other 7 rationales should come from economic/market analysis, sector analysis, earnings call critique, strategic plan critique, sector critique...You can discuss any 10 reasons you wish and do not need to include pricing models, technical analysis or ratios as one of your reasons. For each answer, show the data (or qualitative information) and discuss the data (or qualitative information). Then critique and forecast.
For the pricing models, you must show a screen snapshot of your Excel file and must include the implied growth rate from the models. Do not just use the automated Excel file. Make changes to the automated pricing models and discuss your changes. Also, make sure to discuss why the model is appropriate for this company.
If you’re usingTechnical Analysis, you must show a screenshot with pricing history and the relevant analysis. Be sure to briefly discuss the mechanics of the specific technical analysis tool.Don’t just showthe screens. First, describe how the tool works. Then highlight the relevant parts of the charts to include the buy/sell prices.
For ratio analysis, recall we have discussed 5 categories: 1) Liquidity Ratios (Current Ratio, Quick Ratio),2) Asset Management Ratios (TAT, DSO, Inventory Turnover...), 3) Debt Management Ratios (TIE, Debt/Equity...), 4) Profitability Ratios (NPM, ROE, ROA...) and 5) Market Value Ratios (P/E, M/B, P/FCF,P/Sales). If you want to discuss ratios as one of your answers, fully discuss three of the five categories.When you’re discussing ratios, you must show your company’s ratios over time(like you did in your Ratios homework) and also compare to your competitors. Simply listing a snapshot of recent ratios is not sufficient.
If you discuss the economy, be sure to use the regression methods learned in an earlier assignment. Forexample, don’t just say the economy is going up/down. Instead, provide a snapshot of your Excelregression to provide quantitative support for your position. Then adjust your quantitative findings with qualitative reasoning, but be sure to provide proper explanation. Then relate your company to the economy (company revenues vs GDP growth) and discuss why this company is best served in the macroeconomic environment you describe. The current pandemic is largely unprecedented in terms of the economics. Your position about the future is as plausible as any others’. However, you need to substantiate your position with data.
Each of the reasons is worth 10 points for a total of 100 points. You can earn an additional 5 points by providing a brief overview of the company at the beginning of the project (one page). For each reason, you will receive 10 points, 5 points or 0 points. Your grade for each question will be based on whether your recommendation is rationaland whether you’ve provided a thorough discussion (includingsnapshots, interpretation, critique and forecast). The biggest reason students don’t receive full points is because they are speaking in generalities. Instead, make sure all of your responses are substantiated and company specific.Copy and Paste Your Assignment Here