1 / 5

APPLICATION SOFTWARE Christopher Stollar Business Finance 301 Stock Valuation Project 04/20/2012

APPLICATION SOFTWARE Christopher Stollar Business Finance 301 Stock Valuation Project 04/20/2012. Calculations. P/E Ratio : 29.11/1.67= 17.4311 Industry: 17.5 17.5*1.67= 29.23 Undervalued(Buy) Enterprise Multiple : 130.71/15.4= 8.48766 Market Cap : 144.83B

leanne
Download Presentation

APPLICATION SOFTWARE Christopher Stollar Business Finance 301 Stock Valuation Project 04/20/2012

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. APPLICATION SOFTWARE Christopher Stollar Business Finance 301 Stock Valuation Project 04/20/2012

  2. Calculations P/E Ratio: 29.11/1.67=17.4311 Industry: 17.5 17.5*1.67= 29.23 Undervalued(Buy) Enterprise Multiple: 130.71/15.4=8.48766 Market Cap: 144.83B (4.97511B shares outstanding) P/E Ratio: 64.82/4.406=14.7118 Industry: 17.5 17.5*4.406= 77.105 Undervalued(Buy) Enterprise Multiple: 75.46/6.809=11.08239 Market Cap: 79.60B (1.228083382B shares outstanding)

  3. DuPont Analysis • (8.547/35.622)*(35.622/73.535)*(73.535/40.245) • .2399*.4844*1.827 • =21.22% • (4.816/19.925)*(19.925/32.551)*(32.551/17.7898) • .2417*.6121*1.8297 • =27.07%

  4. Dividend Discount Model g: 27.07*60.6= 16.40% Beta: 1.37 Rf: 3.107 Rm: 10.00 CAPM: 12.55% DCF: 19.17% K: 15.86%... Don’t avg CAPM and DCF…only use CAPM…12.55% DDM: When calculated g>K therefore the model is voided. g: 21.22*96.5= 20.47% Beta: 1.24 Rf: 3.107 Rm: 10.00 CAPM: 11.65% DCF: 20.72% K: 16.19%...Don’t avg CAPM and DCF…only use CAPM…11.65% DDM: When calculated g>K therefore the model is voided.

  5. Final Thoughts • A less riskier option with a Beta of 1.24, with a rewarding growth percentage of 20.47%. • Their stock is also undervalued making it a great buy. • Div= 0.06, a lot lower than their competitors SAP. • A good stock to pick up on if looking for growth and not for steady income. • Not an overly risky stock with a Beta of 1.37, but also comes with a lower growth compared to ORCL at 16.40%. • This stock is also undervalued compared to the industry making it a buy as well according to the P/E ratio. • Div= $1.54, higher than ORCL, and can be appealing to investors looking for income.

More Related