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Stock Trading 102 Seminar

Stock Trading 102 Seminar. Arlen Novelli, Sesame Chen, Stefan Filipovic and Abby Holtan. Stock Market Success. Understand goal Generate idea Avoid gambling mentally Follow economic indicators. Company Analysis. Management Service/Products Financial Health Stock Price Evaluation

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Stock Trading 102 Seminar

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  1. Stock Trading 102 Seminar Arlen Novelli, Sesame Chen, Stefan Filipovic and Abby Holtan

  2. Stock Market Success • Understand goal • Generate idea • Avoid gambling mentally • Follow economic indicators

  3. Company Analysis • Management • Service/Products • Financial Health • Stock Price Evaluation • LOOK AT YOUR LIST OF TERMS!!! 

  4. AIG – American International Group

  5. Company Overview • Multinational, operates in more than 130 countries. • 88 million customers. 62,000 employees. • “Together, we’re working to help see, build, and secure a better future for everyone.”

  6. Management • Robert H. Benmosche-President and Chief Executive Officer. • 7M Annually • 2009 • Alfred University • New York

  7. Services and Products • Accident and health. • Annuities. • High Net Worth. • Insurance. • Marine and Inland Marine. • Travel. • Warranty.

  8. Competition • Met Life, Inc. $36.43 • Traveling Companies, Inc. $81.46 • Manulife Financial Corp. $14.95 • Aflac, Inc. $51.01

  9. Financial Health • $64B revenue in 2011. • 30% of revenue out of the USA and Canada. • Recently paid off debt with the US government. • Total of benefits, claims and expenses. • $65,302 (2011) $59,590 (2010)

  10. Financial Health cont. • Year-end balance sheet data: • Total assets 555,773 • Total investments 410,438 • Total liabilities 441,444 • Total AIG shareholders’ equity 104,951 • Total equity 105,806

  11. Stock Price Evaluation • Previous close 38.07 • Today’s open 38.28 • Day’srange38.21 - 38.90

  12. Stock Price Evaluation cont. • Earnings growth (last year) -18.48% • Earnings growth (this year) +271.81% • Earnings growth (next 5 years) +10.00% • P/E ratio 2.5 • EPS $1.64

  13. Methods • Public information – Financial • Stocks, Finances, Market, Investments.

  14. Apple

  15. Apple, in the past 6 Months

  16. “you should never invest in any idea that you cannot illustrate with a crayon.” “ The only value of stock forecasters is to make fortune tellers look good. “ --Warren Buffett

  17. Apple: product, service • More innovative • Sleek design • Novel software • Good quality • Product integration • Perfect service

  18. Apple: Management

  19. Analyses for Apple • Fundamental analysis—used for test if you pick the right stock • Technical analysis—appropriate the right time and price to buy it

  20. Analysis for apple • Fundamental analysis • Profitability ratios • ROA may not used for personal computer industry • Valuation Rank • Compares earning, cash flows and sales to market value (intrinsic value & market value)

  21. Apple vs. Google

  22. Apple vs. Industry leader

  23. Technical analysis • Technical analysis • Extremely complicated • MACD, KDJ, BOLL, etc • Affected by psychology of shareholders • Data only, no industry background needed

  24. MACD

  25. Home Depot

  26. Background • What is Home Depot? • Current chairman and CEO • HD Supply • Competitors • Major shareholders • Recent Activity

  27. Key Statistics • Fiscal year ends: Feb. 2nd • Total market capitalization for all publically traded companies: $15,640,707,100,000 • Total market capitalization for Home Depot, Inc.: $103.80B • Price/Earnings Ratio: 23.39 • Number of shares of common stock outstanding: $1,523,263,533

  28. Industry • Sector: Services • Industry: Home Improvement Stores- 11 Stocks • Home Depot vs. the industry leader (KGF.L) • Market Cap comparison • Price per share • Price/Earnings Ratio

  29. Industry Continued

  30. Financial Health • Total Revenue- $70,395,000 • Cost of Revenue- $46,133,000 • = Gross Profit= $24,262,000 • Total Current Assets- $14,520,000 • Total Assets- $40,518,000 • Total Current Liabilities- $9,376,000 • Total Liabilities- $22,620,000 • Total Stockholder Equity- $17,898,000 • Total Operating Expense- $18,755,000 • Total Debt- $10,788,000 • Total Cash Flow- $6,651,000

  31. Determining Financial Health • Total Cash Flow- $6,651,000 • Cash Flow Growth Rate- 10.28% • Earnings Growth Rate- 13.40% • Debt-to-equity ratio- 0.6073(2012)0.6027(2011)0.5161(2010) • Return on equity- 25.42% • Gross Profit Margin- 34.37%(2012)34.27%(2011)33.87%(2010)

  32. Smith & Wesson

  33. Smith and Wesson • History of the Company: • Horace Smith and Daniel B. Wesson • First partnership in 1852 • Second in 1856 • Introduced the Model 10

  34. NASDAQ Dozen

  35. Revenue-Pass

  36. Earnings Per Share-Pass

  37. Return on Equity (ROE)-Fail

  38. Analyst Recommendations-Pass

  39. Positive Earnings Surprises-Pass

  40. Earnings Forecast-Fail

  41. Earnings Growth-Pass

  42. PEG Ratio-Pass

  43. Industry Price-Earnings

  44. Days to Cover-Fail

  45. Insider Trading-Pass

  46. Weighted Alpha

  47. Strength of Company Stock • Pass: 8 • Fail: 4 • 8:4 • Moderate

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