A. Choose 2 stocks to study that seem to have good investment potential at first glance.
1. One stock must come from running a ready-made “stock screen”. You do not need to come up with the parameters yourself that way. But you should add a criteria that PEG < 1 if not already one of the criteria used in that particular screen.
http://screener.finance.yahoo.com/newscreener.html (See Preset Screens — 2 on this page but more under “More Preset Screens.” – may have to use Shift Print Screen to copy the list to a Microsoft Word document to be able to print it)
Make sure you indicate the category of screen (e.g. “Midcap Growth”) and PRINTthe list provided by the stock screen to include in your report. DO NOT CHOOSE THE SAME STOCKS AS SOMEONE ELSE! (Also, do NOT use something like Greatest Sales Revenue that doesn’t necessarily indicate profitable stocks.)
2. The second stock should come from watching for abnormally positive movement of a stock on the stock ticker shown on CNBC (or elsewhere).
B. Write an Analysis for each stock:
Research on the internet to decide whether each stock would be a good investment or not and write a strong argument as to whether to invest in each stock or not.Use http://finance.yahoo.com to get your information.
Include the following information in bulleted format for each stock (See “Analyst Opinion and Analyst Estimates after typing your stock’s symbol in the search box):
• Recommendation Summary
• Price Target Summary
• Recommendation Trends
• Growth Estimates (This Year, Next Year, Next 5 Years (per annum), P/E, PEG)
• % Held by Insiders (under Key Statistics on side menu)
• Beta
• # shares of common stock outstanding for the last few years (see Balance Sheet)
•
Discuss each of the items above (especially P/E and PEG – compare growth estimates, P/E and PEG to the stock’s industry and say what you think) in yourwriteup of each stock!Put yourcomments just below where you paste the bulleted item.
Other good sources: Key Statistics – ROA, ROE, PM, Debt, Cash, etc…..
Headlines (under stock on Yahoo)
Google (use the company’s name to get recent articles)
Charts to Print:
Go to http://finance.yahoo.com and enter your stock’s symbol in the box next to “Get Quotes”. In the left column, select “Basic Tech. Analysis”. Activate (select) RSI, Slow Stochastics and Volume, Print a 2-year version of this chart.
Now choose “Basic Chart” and print a 6-month chart that compares your stock to the S&P, Nasdaq and Dow. Hit “Compare” and print. (For optional fun, play with the “Interactive Chart”.)
II. Analysis of Mutual Funds (look only at equity (stock) funds, not bond funds)
A. Use the internet to help you choose 2 of the BEST mutual funds (from different categories: e.g. index funds, growth funds, income and growth funds, etc.) to study and compare. Use (1)http://screen.yahoo.com/funds.html (only fill in the attributes that are of interest to you) OR look at the “Present Screens” in the left column for ideas. You might want to read the helpful information on mutual funds that is provided at http://finance.yahoo.com/funds; or (2) http://biz.yahoo.com/p/top.html (this site gives top performers); or (3) at Fund Quickrank on the left, or to get some ideas, look at Morningstar Screens on the right.
B. Charts:Use print a 5-year “Basic Chart” for each mutual fund you are studying. On each 5-year chart, compare the mutual fund to the S&P 500 Index and the Nasdaq.
C. Written Analysis:The report must contain and discuss the importanceof the fund’s: (Copy and past each of these into your report and discussthe importance of that information to you directly under each item.)
• Performance Overview (click on Performance)
• Morningstar style box
• Morningstar rating (must be 3, 4 or 5 star fund)
• Minimum investment
• Expense Ratio
• Manager Tenure
• Load
III. Written Allocation:Assume you have $100,000 to invest for the next 5 years, and the only investment choices you have to choose from are the 2 stocks and 2 mutual funds you have chosen for your report. Decide how to allocate your $100,000 among those investments (assign percentages – you do not have to invest in all of them) and justify your decision using the information you have been asked to gather. Variables such as risk preference, age, desired return, the economy, etc. should be used in your justification.
IV. Prediction:For vast motivation, predict (and include in your report) how much money you think you will have at the end of 5 years. SHOW HOW(with an equation) you calculated that amount(e.g. use a mutual fund’s last ten years’ load-adjusted return rate from www.finance.yahoo.com(under Performance Overview) to predict into the future; for stocks, use the predicted growth rates of EPS for the next five years from www.finance.yahoo.com found in “Analysts Estimates” toward the bottom of the section).
Ex: $20,000 (1 + .1872)5 = $45,755
V. Feedback:Did you learn? Was this project useful to you? Suggestions to make it better?
GRADING:
Your report will be graded based on quality of analysis and completion. All reports must be typed. Highlight stock and fund names on printouts. Print out the Table of Contents sheet provided on the next page, and place this at the front of your report. Put all items in that exact order. Flat report folders with brads/fasteners are greatly preferred. Small-ring loose-leaf notebooks will be accepted if you have too many pages to fit in the folders with brads. All reports must be fastened into the folder in some way (no pages put into pockets). Put your roster number in large print on the outside of your folder in the top right-hand corner. USE TABS (can be homemade but neat) to indicate the beginning of each of the three stocks, the three mutual funds, the investment allocation, the prediction, and the feedback (9 tabs total – worth 20 pts!).
DUE DATE:
Wednesday, November 25thby 5:00 pm at Wehner 342 (Help Desk) – please put your report in the appropriate box just inside Wehner 342’s door according to your roster number. Early projects are WELCOME so TAs can begin grading!
Name: __________________________________ Roster #: _______
Email: ________________________ Date: ________________
Telephone #: __________________
TABLE OF CONTENTS – FINC 409 INVESTMENT ANALYSIS
I. Analysis of 2 Stocks (approximately 1-2 typed (DS) pages PER stk) Included? (check if yes)*
A. Stock #1
1. Stock Screen printout (highlight the stock) _____
2. Written Analysis _____
3. 2-year and 6-month Charts _____
4. Any additional information used? _____
__________________________________
B. Stock #2 (tell how and why you chose this stock)
1. Written Analysis _____
2.. 2-year and 6-month Charts _____
3. Any additional information used? _____
__________________________________
II. Analysis of 2 Mutual Funds (approximately 1 page per fund)
A. Mutual Fund #1
1. Copy of source for choosing this fund _____
2. Written Analysis _____
3. Chart _____
B. Mutual Fund #2 (provide source for choosing this fund)
1. Copy of source for choosing this fund _____
2. Written Analysis _____
3. Chart _____
III. Allocation of $100,000 (approximately 1 typed page) _____
IV. Prediction (approximately 0.5 typed page – can be an Excel
spreadsheet but MUST show the full equations used) _____
V. Feedback (approximately. 0.5 typed page) _____
* The students are to check each item that is INCLUDEDin the project. A 50-point penalty exists
for checking something that is NOT included.
-Above given information is for the project and instructor said we need to go yahoo stock to find a
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