FIN571 - Stock Valuation and Analysis

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Business Finance

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Purpose of Assignment

The purpose of this assignment is to allow students the opportunity to research a Fortune 500 company stock using the popular online research tool Yahoo Finance. The tool allows the student to review analyst reports and other key financial information necessary to evaluate the stock value and make an educated decision on whether to invest.

Assignment Steps

Resources: Yahoo Finance

Select a Fortune 500 Company from one of the following industries:

  • Amazon

Access Yahoo Finance and enter the company name.

Review the financial information and statistics provided for the stock you selected and answer the following:

  • What is the ticker symbol of the company you chose?
  • What is the Current Stock Price?
  • What is the Market Cap for the stock you chose?
  • What is the Price to Earnings Ratio?
  • What is the Dividend and Yield?
  • What is the Enterprise Value?
  • What is the Beta?
  • Was there a Stock Split, and if so, when?
  • What was the closing stock price for the last 5 days?
  • What was the 52 Week High for this stock?
  • What is the Book Value per Share?
  • What type of rating are analysts recommending (i.e. buy, hold, etc.)?
  • What is the target price analysts are predicting for this stock?
  • What is the analyst's average revenue estimate for next year?
  • What are some of the significant news items and press releases made by the company over the last year?

Explain in 700 words why you would or would not recommend investing in this stock.

  • Describe the relationship between the value of the stock and the price to earnings ratio.
  • What information does the Market Capitalization (Market Cap) and Beta provide to the investor?

**Cannot accept more than 5% plagiarism, it will be submitted to TurnItIn. If you are referencing please do in-text citations.

***Please use grading guide attached to help you and make sure that all requirements are met.

It should not have to be restated, but remember that ALL written paper assignments are required to have references AND citations in the body of the paper. A paper with no references or citations is considered a form of plagiarism and will result in zero points.

Please note the discussions are NOT like a paper -- it is considered a public type of forum. Most items from the web site and the text are considered copyrighted information and it is an infringement to copy and paste without express written permission by the author. This includes items copied that are even referenced and cited. I will not count these items as substantive. Please feel free to include the URL address in your discussion posts so we can go to the site, but keep your discussion comments ONLY in your own words. Thanks for your attention to this matter.

***It is VERY IMPORTANT that you follow the grading guide as well as the APA format. This professor is very picky and must be done carefully and correctly.

BOOK: Ross, S., Westerfield, R., Jaffe, J. & Jordan, B. (2016). Corporate finance (11th edition). New York, N.Y. McGraw-Hill Education.

Let me know if you have any questions.

Unformatted Attachment Preview

Stock Valuation and Analysis Finance 571 Stock Valuation and Analysis 1. Enter http://finance.yahoo.com/ in the search tool. The Yahoo Finance Homepage will open (It will look similar to the page below) 2 Stock Valuation and Analysis 2. Select a Fortune 500 Company and enter the company name in search bar to access the research on the company. 3 Stock Valuation and Analysis 3. The results of your search will show the company with the stock market ticker symbol and other financial metrics. 4 Stock Valuation and Analysis 4. The student will tab to the "Statistics" tab to answer other questions for this exercise. 5. The student will find answers for: a. Enterprise Value b. Stock Split (See the Dividend and Splits section towards the bottom) c. 52 Week High d. Book Value per Share (Bottom left) 5 Stock Valuation and Analysis 5. Students then select the "Historical" tab. a. Closing price for the last 5 days 6 Stock Valuation and Analysis 6. Student will select the "Analysts" tab. Students will find answers to: a. Recommendation Rating b. Target Analyst Price c. Average Revenue Estimate 7 Stock Valuation and Analysis 7. Students will return back to the "Summary" Tab, and then select the "Press Releases" tab below. a. Press Release and other news articles about the company. 8 Conclusion 9 Individual Assignment: Stock Valuation and Analysis Purpose of Assignment The purpose of this assignment is to allow students the opportunity to research a Fortune 500 company stock using the popular online research tool Yahoo Finance. The tool allows the student to review analyst reports and other key financial information necessary to evaluate the stock value and make an educated decision on whether to invest. Resources Required • Yahoo Finance Grading Guide Content Selected a Fortune 500 Company from one of the following industries: • AMAZON Accessed Yahoo Finance and entered the company name. Reviewed the financial information and statistics provided for the stock selected and answered the following: • • • • • • • • • • • • • • What is the ticker symbol of the company you chose? What is the Current Stock Price? What is the Market Cap for the stock you chose? What is the Price to Earnings Ratio? What is the Dividend and Yield? What is the Enterprise Value? What is the Beta? Was there a Stock Split, and if so, when? What was the closing stock price for the last 5 days? What was the 52 Week High for this stock? What is the Book Value per Share? What type of rating are analysts recommending (i.e. buy, hold, etc.)? What is the target price analysts are predicting for this stock? What is the analyst’s average revenue Met Partially Met Not Met Comments: Stock Valuation and Analysis Grading Guide FIN571 Version 9 Content • Met Partially Met Not Met Total Available Total Earned 5 #/5 Partially Met Not Met Total Available Total Earned 2 #/2 7 #/7 Comments: estimate for next year? What are some of the significant news items and press releases made by the company over the last year? Explained in 700 words why you would recommend/not recommend investing in this stock. Described the relationship between the value of the stock and the price to earnings ratio, including what information the Market Capitalization (Market Cap) and Beta provides to the investor. Writing Guidelines Met The paper—including tables and graphs, headings, title page, and reference page—is consistent with APA formatting guidelines and meets course-level requirements. Intellectual property is recognized with in-text citations and a reference page. Paragraph and sentence transitions are present, logical, and maintain the flow throughout the paper. Sentences are complete, clear, and concise. Rules of grammar and usage are followed including spelling and punctuation. Assignment Total Additional comments: # Comments: 2 Stock Valuation and Analysis Grading Guide FIN571 Version 9 Assignment Total # 7 #/7 3
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Explanation & Answer

Attached.

Running head: FIN571 - Stock Valuation and Analysis

FIN571 - Stock Valuation and Analysis
Name
Instructor
Institutional Affiliation
Date

FIN571 - Stock Valuation and Analysis

2

a) Ticker symbol-AMZN
b) Current stock price- $1,176.75
c) Market Cap for the stock -567.043B
d) Price to Earnings Ratio- 299.28
e) Dividend and Yieldf) Enterprise Value- 560.02B
g) Beta- 1.42
h) Stock Split- Sep 2, 1999, the split factor is 2/1
i) Closing stock price-the stock price were 1,176.75, 1,161.27, 1,193.60,1,195.83 and
1,186.00 in the last five days (Figure 2).
j) 52 Week High for this stock- $1,213.41
k) Book Value per Share- $48.36
l) The stock has a rating of 1.8 and analysts recommend investors to buy
m) The analysts are predicting target price of $1,243.91 for the stock
n) The analysts are estimating an average revenue estimate of 228.2B for 2018.
o) The company has no major news from the mainstream media. However, the analysts are
optimistic about the company’s future performance and it is advisable that investors
should buy the stock of the company.

3

FIN571 - Stock Valuation and Analysis
References

Ross, S., Westerfield, R., Jaffe, J. & Jordan, B. (2016). Corporate finance (11th edition). New
York, N.Y. McGraw-Hill Education.
https://finance.yahoo.com/quote/AMZN/analysts?p=AMZN

Attached.

Running head: FIN571 - Stock Valuation and Analysis

FIN571 - Stock Valuation and Analysis
Name
Instructor
Institutional Affiliation
Date

FIN571 - Stock Valuation and Analysis

2

Recommendation on investing
The stock is quite promising. The company did a share split of two shares for every one
share. Looking at the date of share split which was way back on Sep 2, 1999, and it has seen the
share register a massive growth all along those years to the high of $1,176.75. It is very likely the
company may undergo another share split to allow the share grow even more as it will increase
its saleability due to its affordability leading to value generation for an investor (Ross,
Westerfield Jaffe & Jordan, 2016). Also, the stock beta is greater than one, i.e., at 1.42 meaning
that the returns are above the market average return thus an investor gets more returns. The
history of the book value of the share came a long way, it began with $48.36, and currently, it is
trading at $1,176.75. Indeed, the stock has recorded tremendous increase in the value of the
share. Also, the analysts recommend a buy decision at this moment since they project a potential
increase in future revenue generation for the company.
Relationship between stock value and price to earnings ratio
Price to earnings ratio for a company tries to measure its current market share price
relative to its per-share earnings (Ross, Westerfield Jaffe & Jordan, 2016). It gives a hint to what
extent or the capability of the price multiple or earnings multiple. The current price-earnings
ratio of the company is 299.28 meaning that earnings per share are approximately 300 times its
current market value per share. In practice, it is known that a higher price to earnings ratio
implies that investors are expecting potential higher growth in the future when compared to
companies with relatively lower price to earnings ratio. Stock value communicates the value or
amount that investors are willing to buy or sell at. The Amazon’s stock price is currently trading
at $1,176.75. It is a blue-chip stock due to its high price trading in thousands of dollars per share.

FIN571 - Stock Valuation and Analysis

3

It is expected that the company’s earnings are high thus the higher price to earnings ratio of
299.28. ...


Anonymous
Really helpful material, saved me a great deal of time.

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