Stock Assignment #1

 

Company Name  

Stock Symbol  

Stock Market  

Microsoft

MSFT

Nasdaq, US

Hewlett Packard

HWP

NYSE, US

General Electric

GE

NYSE, US

Citigroup

C

NYSE, US

MPhase Technologies

XDSL.OB

OTC, US

Fidelity Magellan

FMAGX

Mutual Funds, US

Bouygues

1250.PA

Paris

Siemens AG

723610.F

Frankfurt

Vodafone

VOD.L

London

Laidlaw

LDM.TO

Toronto

Telebras

TELB4.SA

Brazil

Telstra

TLS.AX

Australia

TelMex

TELMEXL.MX

Mexico

Golden Harvest

1132.HK

Hong Kong

Nintendo

7974

Japan

Activities:

  1. Find the stock symbols, market and Industry of each of the following companies, similar to what was done above.

Company Name  

Symbol  

Market  

Industry  

Agilent

 

 

 

Qwest Communications

 

 

 

McDonald’s

 

 

 

Pixel

 

 

 

Coca-Cola

 

 

 

Disney

 

 

 

Gillette

 

 

 

American Express

 

 

 

Adobe

 

 

 

 

 Stock Assignment #1

For each industry in stock assignment #1, find the top three companies and their symbols, in that industry.

Industry

Company Name

Symbol

#1

 

#2

 

#3

 

Industry

Company Name

Symbol

#1

 

#2

 

#3

 

Industry

Company Name

Symbol

#1

 

#2

 

#3

 


Industry

Company Name

Symbol

#1

 

#2

 

#3

 

Industry

Company Name

Symbol

#1

 

#2

 

#3

 

 

Stock Assignment #3

In the previous section, you have discovered how the market ranks different companies, but how will you do the same thing?  You will need to be able read investor information.  The first step is to be able to read the financial pages in the Wall Street Journal.  It would be handy for you to get a copy, so that you can look at the information on the companies that interest you.  Armed with a calculator, pencil, and a WSJ, access this website:

http://www.investopedia.com/university/tables/tables2.asp to access ticker symbol information and

http://www.investopedia.com/university/tables/tables1.asp  to understand your stock

 

Every investor has different plans and interests.  Why doesn’t everyone invest in real estate?  Maybe it is not liquid enough.  Why doesn’t everyone invest in the stock market?  Maybe it is too risky?  Why not just put all of your money in a savings account?  The return does not keep up with inflation.  For every investor there are a different set of costs and benefits to each asset.  The existence of all these different types of markets is testament to the fact that they each serve a purpose to different people and that none is ‘wrong’ or ‘right’.  For that reason, everyone should learn the fundamentals of investing, and what they are up against.  How can you tell whether a portfolio fits into your plans?  I recommend this page:

 

http://www.investopedia.com/university/

and especially ‘stock picking’
Stock Assignment #4

 

  1. One of the investing strategies is to select high growth small-cap companies.  To find small-cap stocks from the screener, select the “Market Cap” for under $500 million and keep all other variables in the “Any” position.  Now, complete the table below to narrow the selections.

Small-cap companies selection criteria

Industry

P/E ratio

%Growth

% Price Increase

# Of Results

1.  Any

Any

>50

>50

  .

2.  Software

Any

>50

>50

  .

3.  Software

Max. 30

>50

>50

  .

  1. Another strategy is to go with the Wall Street professionals. To find stocks that analysts are presently strongly recommending, set “Analyst Recommendation” to the “1” position.  Now, complete the table below to narrow the selections.

Analyst recommendations selection criteria

Industry

P/E ratio

%Growth

% Price Increase

# Of Results

1.  Any

Any

25 to 50

Any

  .

2.  Software

Any

25 to 50

Any

  .

3.  Software

Max. 30

25 to 50

>50

.
  1. One strategy of investing is called “bottom fishing.” To find stocks that performed poorly in the past year, students should select “One Year Stock Price Performance” to “Decrease greater than 50%” and keep all other variables in the “Any” position. Now, complete the table below to narrow the selections.

One Year Stock Price Performance selection criteria

Industry

P/E ratio

%Growth

% Price Increase

# Of Results

1.  Any

Any

Any

Decrease >50

  .

2.  Any

Max. 5

Any

Decrease >50

  .

3.  Any

Max. 5

>50

Decrease >50

  .

 


  1. Another strategy is to find winners in a given industry.  To find stocks that have a leading position in an industry, students should complete the table below.

Industry criteria

Industry

P/E ratio

%Growth

% Price Increase

# Of Results

1.  Biotechnology

Any

Any

Any

  .

2.  Biotechnology

Any

>50

Any

  .

3.  Biotechnology

Max 50

>50

Any

  .

 

Stock Assignment #5

1.      Find the annual report for the companies that you are considering purchasing.  Most large companies like Intel and Cisco post their annual report under the investor relations section of their corporate home page.

2.      Read the letter from the CEO and the investor information section, which provides detailed information about the company’s products and services, usually accompanied with photos.

You are now ready to analyze your potential stock.  Analyze the company’s income statement, which consists of data about the sales, costs, taxes, and earnings of the company.

 

Calculate Net Income:
Earnings = Net Revenue – Costs

Also,
Earnings Per Share (EPS) = Earnings / # Common Shares Outstanding

EPS, the most watched figure by investors, shows the profits for each share of stock.

·         Analyze the company’s balance sheet, which shows what the company is worth. A balance sheet consists of three key elements: assets (how much the company owns), liabilities (how much the company owes), and shareholder’s equity (assets minus liabilities). Also, shareholder’s equity consists of two parts. The first part is the value of the stock the company sold to investors. The second part is the money from net earnings over the years. The balance sheet shows the financial health of a company. If the company owes more than it owns (liabilities are greater than assets), the company will be bankrupt soon.  Ahh, the glory days of Enron.

 

If you are mathematically inclined, to better understand your company, you may want to pursue the following activities:

Calculate key financial ratios:

1.      Price-to-earnings ratio (P/E)
P/E = Share Price / Earnings Per Share
(from annual report)

Get a stock quote for Intel (INTC) from the home page of the StocksQuest site. Click on this link to get the EPS for Intel. Then, calculate the P/E for Intel.

Note: The higher the P/E, the more expensive the share price. P/Es for the S&P 500 range from 20 to 30.

2.      Net Profit Margin
Margin = Net Income / Revenue

Click here to get Intel’s data and calculate Intel’s profit margin.

Note: The higher the profit margin, the better. Not many companies have a margin over 20%, but Microsoft and Intel are two exceptions.

3.      Return on Equity (ROE)
ROE = Net Income / Shareholder’s Equity

Click here to get Intel’s shareholder’s equity. Click here to get Intel’s net income. Then, calculate the ROE for Intel.

Note: The higher the ROE, the better. An ROE over 20 indicates a strong competitive position in the business.
 

4.      Debt to Equity Ratio (D/E)
D/E = Long-term Debt / Shareholder’s Equity

Long-term debt means the amount borrowed by the company that will be paid back in a time period over one year. Click here to get the long-term debt and the shareholder’s equity for Intel. Calculate the D/E for Intel.

Note: A D/E of 25% or less is considered safe while above 50% means the company has been borrowing too much money and runs a risk of not meeting loan payments.