Select ONE of the four companies provided by your professor for analysis. Go to
ID: 2734813 • Letter: S
Question
Select ONE of the four companies provided by your professor for analysis.
Go to the Yahoo!Finance Web site.
Enter the stock ticker symbol or name of the company you wish to analyze in the input field next to Get Quotes at the top of the page and click Get Quotes to open the stock's overview/main page.
Review the price graph provided on the overview page. Click on 6m or 1y at the bottom of the chart to get prices on the stock for the past 6 months or one year, respectively. For either the 6-month chart or the one-year chart, click on the Compare tab at the top of the chart and check the box(es) for one or more of the indices (S&P 500, Nasdaq, and Dow Jones Industrial Average) and click on Draw to generate comparisons of the price movements of the stock with those of one or more of these indices.
Write a paragraph discussing ONE stock's price performance relative to that of the market as a whole, e.g., the S&P 500, over the past several months. Your comments are to include statements as to whether the stock's price seems to move up and down with the market or against it, and whether it moves more or less vigorously than the market.
Go back to the overview page for the company you have selected and click on Key Statistics under the heading "Company" on the left-hand side of the page. On the "Key Statistics" page under "Financial Highlights" review the stated profit margin for the past or trailing 12 months (ttm).
Note: The profit margin or net profit margin is also known as the return on sales (ROS), that is, net income (profits) as a percent of sales. See Chapter 3 of the textbook for a discussion.
Go back again to the overview page for the company you have selected and click on Income Statement under the heading "Financials" on the left-hand side of the page. On the "Income Statement" page look at the profitability for the previous three years.
Write a paragraph discussing how profitable the company has been recently. Your paragraph is to include a description of the trend in sales and profitability for the last three years.
Under the heading "Analyst Coverage" on the left-hand side of the overview page click on Analyst Opinion. On the Analyst Opinion page there is a section entitled "Recommendation Summary" that averages this and last weeks' opinions of professional analysts about the stock on a scale that ranges from 1.0 (Strong Buy) to 5.0 (Sell). Sell means the analysts don't like the stock's prospects and advise investors to sell if they own the stock and otherwise to not invest in it. A strong buy means just the opposite: buy the stock because analysts expect it to make money for investors. In the section entitled "Upgrades & Downgrades History" you can review chronologically recent changes in professional analysts' recommendations about the stock.
Under the heading "Analyst Coverage" on the left-hand side of the page click on Analyst Estimates to get estimates of the firm's future earnings, revenues, and growth.
Note: We will return to these growth estimates in Assignment 4-2: Financial Analyst Exercise III
Write a paragraph explaining what the professional analysts are saying about investing in the stock. Is there a clear recommendation? Your responses are to demonstrate that you have reviewed the sections: Analyst Opinion and Analyst Estimates.
Write 1-2 paragraphs in response to the following questions:
What was the stock's most recent closing price? (Provide the date.)
Is the price moving up or down (See percent change in parentheses on the overview/main page for the stock)?
Look again at the six-month or one-year "Price Chart" graph. Does the stock seem volatile to you? Think in terms of the range of price movement over the last several months as a percent of an average of the high and low prices.
Explanation / Answer
AAPL(Apple Inc)
stock's price performance relative to that of the market(S&P 500):
The stock seems to follow the market as the market goes down the stock went down and as the market went up the stock went up over the last year.However the stock seems to move more vigorously as compared to the market as is also evident form the higher beta therefore the stock is more volatile as compared to the market.
profitable the company has been recently
The profit margin for the company recently in last year has been 22.27%.The profitability for the company has increased over the last three years also the Sales has shown an upward trend over the last 3 years.THe profit has increased from $37 billion(2013) to $53.39 billion(2015) while sales increased from $170 billion (2013) to $233 billion (2015).
What professional analysts are saying about investing in the stock
Analyst have given score 1.8 that means Analysts are recommending a fairly strong buy for the stock.Most of the Analysts have upgraded the stock to Buy or uotperform.All these indicates a Analysts opinion for a Buy for the stock.Earnings and Revenues are expected to increase over the coming 2 quarters,growth is expected to be 9.23% per annum for the next 5 years.
Stocks most recent closing price is $95.33.Stock is moving down. The 52 week high is $133 while 52 week low is 89.5 thus the range is 133-89.5=43.5,thus the volatility is = (43.5)/(0.5*(133+89.5))=39.10% which is fairly high that is the stock on average is volatile.