Reference no: EM133347660
Case: For your final paper, you will write a short, concise stock recommendation report for a firm you would recommend as a buy.
Although this is not an investments class, you will see the application of various topics studied in this course. You will see ratios discussed, discounted cash flow valuation applied, growth opportunities analyzed, and, ultimately, whether or not the investment opportunity is one that should be pursued. This investment opportunity and determining the risk, reward, and valuation all are discussed throughout this course.
The paper is introduced in Module 3 and will apply various concepts you will study throughout the course. You may want to work on this paper throughout the course and apply the concepts studied as you proceed through the course.
Review the grading rubric associated with the Activity 8.5 Final Paper Assignment.
Reports from the following resources are not all the same, but there are some common themes. Most include a brief discussion of the industry and industry outlook as well as where the firm being analyzed stands and performs in the industry. You will note that ratio analysis is often used but the ratios may vary by industry. In other words, the key ratios used to analyze firms in industry "A" are not the same ratios used to analyze firms in industry "B."
Valuation is often considered using more than one method. Discounted cash flows may be used in conjunction with an appropriate ratio (again the ratio likely varies across industries). How does the current share price compare to what your analysis values the stock?
Risk, growth potential, payout policy, and other factors are other items that may be discussed in the reports. These all play a role in analyzing a firm and may signal management's belief about the future value of the firm. Those may be items you will want to discuss in your report. Do not forget the threats that the firm faces as well. There is no firm that does not face competition. Those threats should be considered.
Value Line is an independent investment research and financial publishing firm providing research resources in global investment and trading markets.
Value Line has a very unique format. The data includes some discussion of key factors. The other example(s) better reflect what your submission should be similar to.
Access to this database through the Hunt Library is limited to three users at a time. Please sign out of the database when you are finished.
Mergent provides business and financial information on global publicly listed companies.
Access to this database through the Hunt Library is limited to three users at a time. Please log out of the database when you are finished.
As an example of the work that should be completed for full credit on your final paper, please see the below template. Any paper not including all of the below metrics can be considered incomplete resulting In a failing grade.
Introduction - Describe the industry and the company's main competitors.
overview-give the reader a general overview of the company and its main forms of revenue.
Firm value 1- Use a method of valuing the firm that we discussed in class. Value the business both as a total firm value and on a per share basis.
Firm Value 2- use a second method of valuing the firm that we discussed in class. Value the business both as a total firm value and on a per share basis.
Firm's Financials- Discuss in depth the firm's financials and ratios. Be sure to not just state different ratios but discuss what the ratio means for the firm but how and why it is impacted by different metrics on the balance sheet.
Return on Equity - Create a Du Pont analysis of the firm you are analyzing and discuss each component of the Du Pont analysis.
Calculate the Cost of Capital- Calculate the firm's WACC and cost of Equity. Discuss the firm's debt financing and why you believe the firm chose that capital structure.
Firm Risk - Discuss risk that the company is facing and use methods we discussed in class to evaluate the firm's risks.
Dividend Policy - Discuss the firm's dividend policy if capital is returned to shareholders or how the capital is being used to grow the business. Include any relevant facts about the firm's dividend policy.
Conclusion - Discuss why would or would not recommend buying the investment. Bring together the whole paper when discussing Your conclusion.