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Tawny’s Stock Market Project Directions
I am giving you $100k or 100,000 hypothetically
Can buy one stock or as many as you would like
I will charge you a $10 commission
For example if you buy 10 Shares of Apple the cost will be $10
If you buy one share of Apple the cost will be $10
I would like for you to liquidate (sell) your stock or stocks before the deadline to figure out the profit
If you sell one share of stock $10
If you sell 10 shares of stock commission $10
Example of profit
Bought 8 shares of Apple on 11/17/14 at $113.87 = 8 x $113.87 = $ XXXXXXXXXX = $920.96
$910.96 + $10 commission = $920.96 total cost
If you sold 8 shares on 1/19/18. The price when the market closed was $178.43 = Receive 8 shares x 178.43 = $1,427.44
However, you also lost or had to pay a $10.00 commission = $1,427.44 – 10.00 = $1,417.44
Paid $920.96 including commission
Received $1,417.44 including commission
$1, XXXXXXXXXXwhat you received) - $ XXXXXXXXXXwhat you paid) = Profit or Loss = Profit $ 496.48
A few other things to look for when choosing a stock
Higher Net Income:
Good Management:
Popular Products:
Competitors:
Debt
Decreasing Expenses
To look up a stock go to: Finance.yahoo.com or finance.google.com
You can use any source, I like these two because they are easy to navigate and are not full of commercials.
Search Company
Will give you stock symbol or ticker symbol
Not all stocks are going to be publically traded companies
These are the typical ratios, or information that you will see on the first page
Beta: __________ Measures how volatile
isky the stock is. The beta is based on how much the stock price swings up and down.
Beta = 1 as risky as the market
Beta = .50 = ½ as risky as the market
Beta = 2 = Twice as risky as the market
Higher Beta The higher chance you will make a profit
Day’s range: = Price range for the Day
52 Week Range: = Price range for the past 52 weeks
Market Cap: = = Outstanding Stocks x Stock Price______
EPS =_________
The portion of a company's profit allocated to each outstanding share of common stock.
Earnings per share serve as an indicator of a company's profitability.
Calculated as: Net Income- Dividend on Prefe
ed Share/ Average Outstanding Shares
Earnings per share are generally considered to be the single most important variable in determining a share's price (Investopedia.com).
Prefe
ed Stock: Generally, pay fixed dividends, In the event of a bankruptcy dividends must be paid before Common Stock, but after bondholders. Generally, do not have voting rights (Investopedia.com).
PE = Price /Earnings per Share Ratio: = ___________
Things to Remember PE Ratio
· Generally, a high P/E ratio means that investors are anticipating higher growth in the future.
· The average market P/E ratio is 20-25 times earnings.
· However, it is important to compare the ratios to the industry ratios
· The P/E ratio can use estimated earnings to get the forward looking P/E ratio (Investopedia.com).
Dividend Yield: __________
A financial ratio that shows how much a company pays out in dividends each year relative to its share price (Investopedia.com).
Annual Dividends per Share/ Price per Share = Dividend Yield
Dividends are usually paid on a quarterly basis, so we will not calculate dividends for this assignment, since it is shorter than a quarter (a year divided into four parts).
Finance.google.com XXXXXXXXXXClick the tab compare 2.) Look at related companies towards the bottom
Who are their competitors? ______________
List the Beta, PE, EPS, and Net Income for each and state which is the best IN YOUR OPINION
Presentation Requirements If you are choosing multiple stocks, you only have to the analysis for one stock.
· Power Point – Prezi or some sort of visual aide
What to include in your slides? Or, other visual aide
Visual Aide: Power Point, Prezi, or some sort of other visual:___________ (20 points)
Short summary of at least two news articles ______(10 points)
Stock ticker: ____2 points
Price and Date Purchased: _______2 points
Price and Date Sold: ___________2 points
Profit or Loss: _______________2 points
Beta: ______________2 points
What does Beta Mean? :______________2 points
EPS: _______________2 points
Interpretation EPS (what does the EPS mean/ how is your company doing in terms of EPS?) ___________2 points
PE Ratio: _____________2 points
Interpretation PE Ratio/ what does the PE ratio mean/ how is your company doing in terms of PE ratio) _ _________2
Market Cap: ___________2 points
What does Market Cap mean? ___________2 points
Competitors: (two to three) __________________________4
List the Beta, EPS, PE Ratio, Market Cap for two to three Competitors and explain how they compare in each of these ratios: ___________ (10 points)
Why did you pick your stock/s – What was your strategy:? ______________(10 points)
What did you learn from this project?_______________ (10points)
Sources:_____________________________(10 points)
If you are not prepared the day of your presentation it will be – 10 points.
If you do not present your paper it will be – 40 points.