Research project for analyze stocks

Reference no: EM132674232 , Length: word count:350

Research Project for those wishing to Analyze Stocks

Purpose: Take any two companies, preferably in the same industry. Compare to see if one, or both are worth buying. Which is the better of the two?

REFERENCES: Provide URLs as references for each of the two chosen companies websites and also for globeinvestor.com and stockhouse.com
Go to Globeinvestor.com and Stockhouse.com and do some research which will, at a minimum include the following:

1. Do the following ratios and provide some analysis to what they mean. Also provide the requested information for each company. What is the market cap of each stock? What is the growth in earnings? What is the profit margin? Times Interest Earned? What is the Beta? What is the P/E? (Is this within the 15-25 rule of thumb?) What is the Debt to Assets Ratio? Current Ratio? Return on Assets? Net Working Capital? Any other ratios you deem relevant that add to your position of selecting a stock are welcome. Put these in a table format and leave a column to make a brief comment or two on each (e.g. current ratio. Company A is 2.4 which is better than Company B's 1.3. Company B is less than the 2.0 standard in the notes). Also, what story does the Cash Flow Statement tell? Is the company making money from operating activities (regular day-to-day operations) and then buying Long Term Assets (Investing activities) and paying good dividends to owners and paying off loans/bonds/debt (financing activities)? If so great. Or is the opposite happening? Make a table for cash flows and leave a column for comments so you can answer the above questions about cash flows.
Is there anything particularly good or bad about the balance sheet?

2. Go to the ‘News' on each company both from those company's own websites and from Globeinvestor.com and Stockhouse.com. What is the news saying? Is it good? Foreboding? A mix? All bad? All good? Neither good nor bad...? This is important as news drives the price. It's important to let me know that you know what the news is and provide a brief synopsis of what it is.

3. From both Globeinvestor.com, and NASDAQ and/or market watch what do the experts (the analysts) say about strong buy, buy, hold, sell, strong sell? The latter two give you a breakdown of how many say hold, buy, strong buy and not just an overall average. How many analysts were in the sample? Their collective view should not replace your own judgement but augment it. Remember, some of the experts have a vested interest. If they bought the stock in question recently they will be prone to say ‘strong buy' so others buy it and drive up the price. If the expert is short selling that stock, they will want to see the price go down and might say ‘strong sell'. On balance though, you will get a sense of what experts feel about the stock, and this might resonate with your own analysis and judgement. See marketwatch.com analyst estimates for your company.

4. In a few paragraphs, state clearly which of the two companies you would buy if you only had enough money to invest in one company and say why. If you have enough to invest in both, would you (again state why)? If one or both don't seem worth the risk, be specific as to why they aren't worth the risk now. If the reason is just that they are overpriced but otherwise look good, and you will check in over time until the price comes down please let this be known.

Reference no: EM132674232

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