Overview: For your final project, the CEO has asked you, the new investment manager of XYZ Tech Company, to produce an investment analysis report describing how to invest the firm's cash and cash equivalents in the financial markets. You will prepare an investment analysis report for the company, which will include a portfolio analysis template that you will use to outline how you will invest the cash in selected public corporations. Finally, your reasons behind your investment strategies should be noted in an executive summary.
For this first milestone, due in Module Three, you will submit your company profile. Using the investment parameters for XYZ Tech Company along with your own financial database research, you will fill in the portfolio analysis template and write a 2- to 3-page paper outlining the securities that your company will invest in to create a well-diversified investment portfolio. You will analyze each company and its performance in the financial markets over the past five years, include a company valuation for each firm, and identify stakeholders in the company.
Choose Apple Company
Prompt: First, visit Morningstar to retrieve stock and bond information for each of the following companies:
- Apple, Inc. (AAPL)
- Caterpillar (CAT)
- Consolidated Edison (ED)
- Northern Trust (NTRS)
- Macy's (M)
Next, using the portfolio analysis template, provide the specified data to explain the company's growth period (revenues, earnings market share, etc.).
Finally, in a 2- to 3-page paper, discuss the five-year history of each company by visiting the respective websites and databases covering the firm and industry. The paper should briefly discuss the products and services produced by each company that were major contributors to the company's success. It should also discuss each company's strengths given the competitive nature of the industry. Based on the financial items and key ratios of the company that you have researched, include a brief discussion of the company's valuation. (Hint: The Key Ratios on the Morningstar website list competition and industry ratios and could be downloaded directly into Excel for easier comparison.) You should also identify the key stakeholders, particularly common stakeholders, in the company.
Specifically, you must address the following critical elements:
I. Company and Market Analysis: In this section, you will analyze the company and its position in the financial markets.
A. Financial Markets
i. Analyze the five-year performance of the domestic economy relative to the financial markets (using the portfolio analysis template).
ii. Explain specific market performance data based on compiled asset valuation model inputs supported by database research of five-year sector and industry performance and current trends.
iii. Evaluate the impact of the five-year and current macroeconomic data on asset prices.
B. Company Valuation
i. Analyze the company's financial items and key ratios for a comparison to peers and industry (using the portfolio analysis template).
ii. Determine the intrinsic value of assets by inputting data into the various asset valuation models.
D. Stakeholders
i. Identify five key stakeholders and their needs in relation to the company's portfolio.
ii. Identify the common stockholders' primary objective and their required return on equity.
Refer to your text readings and other course resources to support your responses.
In Milestones Two and Three, and for the final project submission, you will be using the portfolio analysis template that you have prepared in this milestone. Be sure to refer back to this (and update and revise it as necessary) as you continue your work throughout the course. You should also be monitoring the portfolio's performance on a daily basis and reading the financial periodicals provided among the course resources to stay current with your investments.
Be sure to apply instructor feedback on this milestone to your final project.