Your assignment is to research and analyze certain stocks of your choice until you find stocks or funds to invest in that you believe will perform the best for the duration of our contest.
Your assignment is to write a 1-3 page paper discussing the financial research and analysis you performed to select some the stocks you purchased. The paper is due October 8th, which is before our class contest ends. The contest continues on through November 23rd.
Step 1 – The first step is always to determine your investment goal. In most real-life cases, your investment goal will be one year or longer. For the purpose of this project, your investment goal has already been determined for you—invest until November 23rd to get the highest possible return.
Step 2 – Log on to our class website on this page: http://www.howthemarketworks.com. Our team name is EKU Financiers 002. More detailed instructions are provided on Blackboard in the Assignments/Project 2 folder.
Create your account that you will use to purchase stock, multiple stocks or mutual fund(s). You can buy and sell as much as you would like during the contest period. There is a $5 transaction fee for each purchase. If you need ideas for stocks to research, you can visit www.kiplinger.com, http://finance.yahoo.com, www.finviz.com, or other personal financial websites.
Step 3 – Begin researching your stocks. Use numerical measures to make stock purchase decisions. As described in your textbook on page 394, look the stock(s) up on Yahoo! Finance (http://finance.yahoo.com) and make note of these ratios: 1) Earnings Per Share and 2) Price to Earnings Ratio. Consult your textbook on page 398 to determine acceptable ranges for these measures. An increase in earnings per share is generally a healthy sign for a corporation. Comparing the PE Ratio to other companies in the same industry, to the market in general, or against the company’s own historical PE ratios is usually helpful.
Step 4 – Continue stock research. Visit the website of the company/companies to obtain the most up-to-date information about the company. Get the company’s corporate earnings from the most recent Annual Report provided on the company website. Have earnings increased over time? Also, research the industry—what are this company’s competitors doing? How does this company’s P/E ratio compare to other companies in its industry?
Step 5 – Purchase your stock or create your stock portfolio on the class stock market game website. You have $100,000 in virtual dollars to spend in your account!
Step 6 – Write a 1-3 page paper that discusses the stock(s) you chose and why.. You may submit the paper in Blackboard through the link provided. The paper must include and analysis with the following information:
• Current Earnings Per Share
• The current P/E Ratio for the stock(s)
• The information you learned from the corporate website of the company, and the most recent annual report (including corporate earnings in 2013/2014 and recent years)