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Conducting security analysis of a publicly listed company

Project's Objective:   Conducting security analysis of a publicly listed company using data retrieved from the Bloomberg terminals and writing a brief report summarizing your analysis and showing your price calculations of the chosen stock to compare your calculations with the actual prices.

Step 1. Get into a team of 3 students and choose a publicly listed company (not a financial institution). You have to verify first that the company paid dividends in the last 5 years. Enter the company of your choice in the Google shared documents until October 31, so that I can approve it before commencing the analysis. Please enter only student IDs, not names in the file. https://docs.google.com/spreadsheets/d/1ZVlknTBU0yDNCPuyoH4wT7WuQDNXfJ pTWXZfPzaiggk/edit#gid=0

Once your company of choice is approved by me, plot the past 5 years of dividends on the Bloomberg terminal and take a screenshot of it and include the screenshot in your report.

Step 2. Write a brief review about the company using the information found on

Bloomberg. Dont copy and paste, use your own words. (one paragraph)

List the main competitor (or competitors) of the company. Compare the ROA, ROE

and P/E ratios for the past year. Put them in a graph and write a paragraph based on the graph.

Step 3. Find the following using the Bloomberg terminal:

-Daily price (for the past year) and,

-S&P 500 (for the past year)

Plot the daily price and S&P 500 in a graph and comment how the company is doing relative to the market.

Step 4. Find the following using the Bloomberg terminal (notice that you may have already gathered some of the following in the earlier steps):

-Historical dividends (past 5 years),

-Expected dividend growth,

-ROE (or net income and total equity),

-Earnings per share,

-Book value per share,

-Payout ratio,

-Price earnings ratio,

-EPS growth rate,

-Price/cash flow ratio,

-Cash flow per share growth rate

-Return on 90-day US T-bills

-Stock beta

Step 4. Using the data youve gathered at previous step, start your calculations.

Calculate:

-Arithmetic average growth rate,

-Geometric average growth rate,

-Sustainable growth rate,

-Discount rate.

PLEASE SHOW ALL CALCULATIONS!!!

Step 5. Calculate the stock price using:

   Constant perpetual growth model using:

-arithmetic growth rate,

-geometric growth rate,

-sustainable growth rate,

-expected dividend growth (as per the Bloomberg)

   Price using the price to earnings ratio

   Price using the price to cash flow ratio

PLEASE SHOW ALL CALCULATIONS!!!

Step 6. Compare the different prices  that youve calculated  using the 3 above models with the actual price of the company (mention date you retrieved the closing price of company) and write a paragraph comparing your results and concluding with your recommendation to buy or sell this stock. End your report with your opinion on how well you believe the company is doing from the different analyses that you conducted.

Step 7. Submit a copy of your project on or before November 29th, 2019 (before 6 p.m.)

RULES

Each team will give me one hard copy of the report ( which should include a cover page with company name and student names & IDs) but each student needs to upload the report and the excel sheet used for calculations on BB in the assignment folder.

Each team needs to provide me with evidence that they retrieved the data from the Bloomberg terminals, so you need to provide me with screen shots of the data retrieved in the appendix of the report.

ALL students need to participate in the data collection, and by submitting your report as a team you are certifying that all of you equally contributed to the report with all participating in the data collection, analysis, and write up stage of the assignment.

You can work in groups of maximum 3 students. No more than 3 students can form a group!

Needless to say, no report should be in any ways similar to another students/groups report. Any similarities will be considered as academic dishonesty and a violation of ZU Honor Code.

Students must be prepared to accept the appropriate sanctions for any dishonest academic behavior. At the very minimum, your assignment will get a zero score.

Note that, I value the way information is presented; which means that I would like to see neat, well?organized, nice looking projects.

Papers will be graded on application of course content and organization of research information.

Please note: Late papers will not be accepted.

  Grading criteria Marks allocated
Entering the company of choice in Google shared documents Plotting the past 5 years of dividends in a graph Review about the company Comparison with competitors -graphs & explanation Plotting the price and the S&P 500 data in a graph & comment Collecting all the information asked (1 per item) Calculating arithmetic, geometric, sustainable growth rate and discount rate (3 per item) Calculating the price using the models (3 per item) Summarizing the calculations and findings & conclusions Including the screenshots from the Bloomberg terminal Showing all calculations 2 5 8 10 8 12   12 18 10 10 5
TOTAL 100

Conducting security analysis of a publicly listed company

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