Guidelines for Current Event Paper
Overall: You will demonstrate your investment analysis strengths in the current event paper by selecting a news article from the financial or business literature concerning a publicly traded company that is of interest to you.The article should concern any of the following topics: recent financial results and/or sales & profit outlook; new business development such as launching a new product or service; booking new orders; entering a new market; merger, acquisition or restructuring; public offering of debt or equity securities; and other such events that you deem significant from a stock price perspective.
Your task in this paper is to summarize the content of the article, analyze its investment implications for the value of the stock, and based on your investment appraisal, make a buy, sell, or hold recommendation on the stock of the publicly traded company you choose.This is an opportunity for you to demonstrate your competence your proficiency in applying the concepts covered in this course.
1) The executive summary should begin with the buy, hold or sell recommendation in relation to the content of the news article you are writing about.The rest of the paper should explain the reason for your recommendation.A table of contents may also be included if the report has multiple sections and subheadings.
2) Calculations and support documentation should be included in the appendix, but relevant statistical support (i.e., bottom line figures such as rates of return, valuation, and so forth) should also be included in the body of the text.
3) Your goal should be to determine what the content of the news article means for the investment merits of the stock.Does the event covered in the article have a positive, negative or neutral effect on the stock price?Explain why.How does this affect your investment recommendation?For example, a company may announce increased order rates for its core business, thereby increasing its backlog of unfilled orders.One may infer that such a development improves the sales & profit outlook, and thus make the stock a likely candidate for further price appreciation.Conversely, a delayed shipment or lower demand would have the opposite effect.
Your current event paper will be graded on content (60%), organization (20%) and clarity (20%).The text portion of the paper needs to be between 4-5 pages in length; it must be typed and double-spaced. If you are including statistical tables, graphs and charts in your paper, they can either be incorporated into the body of the text or referenced in your text and placed in an Appendix.
Please include a bibliography of the references used in your paper.A minimum of three additional references [other than the source of the article, the required textbook or recommended workbook and case book] must be included in order to be eligible for full credit.This implies a minimum total of 5 reference sources [or 6 if you decide to use the workbook and case book].The bibliography should follow the APA reference style. The APA style refers to references in the text by author and year; e.g., (Jones, 1995) or (Smith, 1996; Rizzo, 1994). If you need more details, please refer to the style manual provided by National University.
As noted earlier, feedback will be based on content [60%], organization [20%] and clarity [20%].The following will help you properly interpret these metrics in relation to qualitative feedback:
Percentage scoreQualitative feedback
90% - 100%Outstanding/Significantly exceeds standards
80% - 89%Commendable/Exceeds standards
70% - 79%Acceptable or Satisfactory/Meets standards
60% - 69%Marginal or Unsatisfactory/Below standards
59% or belowFailing
_____________________________________________________
The percentage score will then be applied against the possible points for the current event paper to calculate your points to be posted in the grade book.Example: If you score 80%, this implies 13.6 points out of 17 [or (0.80) x (17) = 13.6].
Here is a special option for all my students:In lieu of attempting to calculate the intrinsic value of an investment in the context of a Current Event Paper, students may have the option of designing their own special project that involves either a not-for-profit organization or publicly supported enterprise in which they are tasked with identifying and quantifying a situation requiring the use of statistical metrics such as factorials [e.g., to estimate the number of ordered combinations of launching a new product / service offering or redeploying assets for a restructuring strategy] or risk-to-return measures [e.g., standard deviations and expected outcomes for scenario analysis] or re-evaluating a capital project in terms of economic value versus income statement accounting data.
This assignment would require the student to utilize the aforementioned techniques covered in the textbook and CALL TO GLORY [by George Haloulakos].In this instance, a special situation involving outreach to a target end-user segment [e.g., a health care organization, a public utility providing water], a long-term capital project such as manned space exploration, scientific research aimed at creating new applications for existing technologies or large-scale transportation / mass transit will certainly carry financial cost figures BUT your challenge is converting or interpreting the true economic value arising from those projects not fully reflected in the accounting data.
CALL TO GLORY provides a case study in which yours truly reexamines a major military project that had enormous spin-off benefits that created economic value that continues to create benefits into the 21stcentury but were not reflected in the accounting figures.Perhaps you can identify something similar and devote your Current Event Paper to evaluating the intrinsic economic value through application of the various principles of Investment Analysis & Valuation to be covered in this course.Not everyone will necessarily be involved with a for-profit organization or has deep interest in stocks, bonds or other investments. However the principles of Investment Analysis & Valuation can be of immeasurable use in deconstructing the added-value from special projects similar to what has been described herewith.
Helpful Hints for Current Event Paper or Special Independent Project
Note: Sample papers have been posted on-line (located in Blackboard Course Shell) for your perusal.PLEASE DO NOT REPLICATE the sample papers as this does not represent original work; those who do not comply with this request will be marked down at least one grade level.
ANALYSIS
:Provide aninterpretive(not a descriptive) text on the implications derived from your analysis of the news article.(Example: The Company’s return on assets improved due to higher asset turnover and increased net profit margin as the company’s sales expanded because of growing demand and the margin improved with a higher absorption rate of fixed overhead.)Identify the underlying business event that caused the change in financial results or business outlook.(Example: A negative cash flow (i.e. high cash usage) for investing could be attributed to a capital spending program (acquiring property, plant & equipment to build a stronger operation)).
VALUATION:Use a valuation technique of your own choice (either from the textbook, instructor learning materials or from an outside reference source of your own choosing) to assess whether the content of the news article has a positive, negative or neutral effect on the stock price.The valuation technique you select enables you to explain why the stock is rated buy, hold or sell.Example: New product launch expected to increase sales & profits would likely raise future Earnings per Share [EPS].Apply the current P/E multiple on the revised future EPS to calculate an implied higher future stock price.