Requirements:
Suppose you are an equity analyst at a small, independent firm that sells investment research to its clients. Part of your job is to make buy and sell recommendations on equity securities. For this assignment, select an industry that interests you. Pick a firm in this industry and complete a comprehensive analysis of the firm, including a valuation and a recommendation (strong buy, buy, hold, sell, or strong sell) for the firm’s common stock.
Project constraints:
The chosen firms must be publicly traded. One easy way to find the firm’s competitors and industry averages is to use an online service such as Yahoo! Finance. Be certain your firm has several years of data. You will need to read many public sources of information such as the SEC filings of the 10-Ks, 10-Qs, and proxy statements. You will also want to compare each firm to industry averages. You may use any software you like for this project.
You will be required to do the following:
1. A written report, due June 18th. Your report should include the following:
a. An executive summary.
b. An analysis overview which includes background information the company and the industry. This should include:
i. A summary of the firm’s history
ii. The firm’s main customers’ and competition
iii. Information on top management and management compensation.
iv. Anything else you feel is important.
c. A summary of the firm’s business strategy.
d. A financial analysis which should include:
i. Analysis of short-term liquidity and longer-term solvency.
ii. Analysis of asset efficiency (e.g., turnover)
iii. Analysis of profitability.
iv. Analysis of cash flow.
e. Prospective analysis to include three to five year’s financial statements, along with a terminal year projection. Include your assumptions used to create these statements.
f. A valuation of the firm’s stock price per share. You may use any method you wish, however you must defend your choice.
g. A conclusion including your recommendation regarding the stock.
h. A bibliography that reveals all sources of information you used. It is perfectly acceptable to use public information, however it must be cited.
Kindly do the necessary changes make it perfect extent and update it
We choose a Turkish company, named Bim Limited. It is a consumer goods company.
Company's Background- This is the consumer goods company. It is based in Istanbul. It was founded in 1995. It is into personal care, baby care, food, beverages and house hold needs business. It is a publicly traded company. It has many home made brands and some brands are advertised and sold by Bim.
Main Customers- Its main customers are the general public like men, women, children and toddlers. It makes products for all age people.
Competitors- Its main competitors in India are Wal-Mart, Caeffour , Colgate, Palmolive and Nestle.
Top level management- Its CEO and MD is Mustafa Latif Topbas.
Business strategy of HUL- Bim's products are most famous among the people. It has wide range products from low, medium to high range. It actually taps all segments when it comes to income. It taps lower income group, middle, lower middle, upper middle and upper income group people.
Financial Analysis- Analysis of short-term liquidity and longer-term solvency (Data of 2016-2015)-
Current Ratio- It is 1.03 in 2016 as compare to 1.05 in 2015. Above 1 is considered good ratio and it tells that company's liquidity position is good. Its assets are liquid and are able to pay the short term obligations in the form of current liabilities.
Fixed asset Turnover Ratio- It is 8.63 in 2016 while in 2015 it was 8.80. This ratio indicates that company's fixed assets are able to meet its long term obligations and assets are efficient.
Analysis of Profitability- Net Profit margin- It is 12.76 in 2016 as compare to 14% in 2015. It has come down from previous year but overall profitability is good.
Return on Equity- It is 110% in 2016 as compare to 115% in 2015, it has come down but shareholders are getting handsome return on their equity.
Analysis of Cash flow- Cash and cash equivalents at the end of the year 2016 is Rs.634.55 Cr. while the net increase and decrease in cash is Rs.-87.42 that is negative and looking that due to heavy financing activities, cash has come down.
Enterprise Value- It is Rs.187086 Cr. in 2016.
Current price per share- It is Rs.1095.40 as on June 1,2017. Fundamentally the company is very good. It has good profitability and solvency. It is having very less debt that shows company does not have to pay much obligation. Bim is the king in FMCG industry in Turkey. It is the top player with the wide range of products. Its stock is recommended to buy for long term perspective.