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Financial Data Analysis Assignment- Tracking and Analysis of the Company’s Common Stock Price AND the S&P 500 Index

Analysis of the Companys Common Stock Price
Analysis of the Company Common Stock Price

FINANCIAL DATA ANALYSIS ASSIGNMENT

This assignment is aimed at familiarizing you with some sources of published financial data.  It is worth 100 points. This assignment should be neatly typed.  It is due on the last class day (not the final). Five points per day (M-F) will be deducted for late papers.

            First, you need to pick a public company to analyze. You should have already informed me of the company you have picked.  A brief description of the components of the assignment follows:

  1. COMPANY STOCK PRICE ANALYSIS – This will include daily tracking and analysis of the company’s common stock price AND the S&P 500 index from March 25th (Monday) through April 12th (Friday). This is fifteen days of price changes and activities. Markets are not open on weekends or holidays.

Notes on the Sawyer Library:

            A major purpose of this assignment is to acquaint you with the incredible amount of information that is readily accessible in business libraries and on the internet. Sawyer Library is a very good library and the librarians at the reference section are very knowledgeable and helpful. Spend some time looking around, both online and on the shelf in the Business Reference sections.

STOCK PRICE ANALYSIS

            In this section, you will develop time series of DAILY closing prices of your company’s common stock price AND the S&P 500 stock market index.  NOTE THAT THE CLOSING PRICE ON A DAY IS FOUND IN THE NEXT DAY’S PAPER.  FRIDAY PRICES ARE FOUND IN THE MONDAY WALL STREET JOURNAL OR THE SATURDAY LOCAL PAPER.

            A very valuable source for finance students is http://finance.yahoo.com/. The markets close everyday at 4:00 pm Eastern time. I suggest that everyday between March 25th (Monday) through April 12th (Friday), go to the Yahoo website after 4:00 p.m. Search for your company using the ticker symbol and check out the page. Also, check out the page for S&P 500 index (ticker symbol ^GSPC).

            If your stock price AND/OR the S&P 500 market index moves up or down significantly during the period, you should try to determine what caused the change and discuss it in your paper. Writing down the volume of trading on the stock each day may be helpful. A dramatic rise in volume will give you an indication that something is up, indicating the existence of some news relevant to the future of your company.  Note that volume changes reflect an interest in a stock, but are not a cause of a rise or fall in the price.

            Prepare a table of the closing prices of the index and your company’s stock price.  Compute the rate of return on both the index and your stock over the three weeks.

RISK AND RETURN ANALYSIS

            Here you will use the daily data to assess the risk and return of your company and others. As noted earlier, you should find information on your company, its industry, and its competitors in Yahoo Finance.

You can find information on stock betas in http://nasdaq.com/. Look in Summary Quotes.

The assignment is to estimate returns on your company and its competitors.  You will need to calculate the expected return using the Capital Asset Pricing Model (CAPM). You can find the average risk-free rate and the average long-term risk premium from the article by Jeremy J. Siegel posted on Blackboard.

If bs differ across companies in the industry, you should think about why that might be and discuss it in your paper. In addition, you should think about whether the bs are consistent with the knowledge you now have about your company and discuss that as well.

Required Graphs and Tables:

  1. Draw a graph showing the price movements in your stock and the S&P 500 index. Use the secondary axis
  2. Draw a candlestick graph showing the volume-open-high-low-close of your stock
  3. Prepare a table summarizing some of the accounting information for your company and at least two of its competitors
  4. Prepare a table showing your stock prices and S&P 500 prices over the 15-day period. Calculate the 15-day returns
  5. Prepare a table showing the Beta calculation steps for your stock
  6. Prepare a table showing Safety Ratings, Betas, and Average Analyst Recommendations for your stock and at least two of its competitors
  7. Prepare a table showing the expected returns using the Capital Asset Pricing Model (CAPM)

Notes:

To do well in this assignment, I suggest that you do the following:

Financial Data Analysis Assignment- Tracking and Analysis of the Company’s Common Stock Price AND the S&P 500 Index

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