Stock Purchase Recommendation for Consumer Defensive Sector

1. Stock Purchase RecommendationforConsumer Defensive Sector By Edmundo, Adrian, Jackson

2. 5 Rules to Evaluate Stocks • Price/Earnings per Share • Earnings per Share • Dividend per Share • Price to Sales • Price to Book

3. Price/Earnings Per Share • P/E=Stock Price/ Earnings per Share • The average P/E ratio is normally from 12 to 15 • A ratio of a company's current price per share compared to its earnings per share

4. Earnings Per Share • EPS= Net Earnings / Outstanding Shares • Investors usually look for companies with steadily increasing earnings per share • A useful measure of profitability

5. Dividends Per Share • DPS=Dividends/ Number of Shares • Investors use DPS to evaluate several stocks to invest in and will prefer to chose companies that pay dividends • Its for investors to be able to determine if a company can produce value for its shareholders

6. Price to Sales • P/S = Stock Price / Sales Price Per Share • A lower P/S ratio is better because investors will pay less for each unit of sales • Used to estimate the worth of a share

7. Price to Book • P/B = Share Price / Book Value Per Share • Low ratio represents a good sign for the company. • Helps investors to compare the market value, or the price they are normally paying per share

8. What three companies are being compared? • Wal-Mart • Target • Costco

9. Wal-Mart • History • Founder Sam Walton opens first Wal-Mart on July 2, 1962, in Roger, AK. • By 1967 Walton family owned 24 stores. • On 1983 the first Sam’s Club is opened in Midwest City, Oklahoma. • On 1988 the first Wal-Mart Supercenter is opened in Washington, MO.

10. Wal-Mart Wal-Mart’s Bad Decisions • Wal-Mart has had various lawsuits for failure to provide adequate rest and meal breaks. • Wal-Mart reserves money for potential lawsuit payouts. • Wal-Mart sued for false arrest and false theft allegations. • Wal-Mart has been accused of locking its night shift workers inside the store, to make sure they do not leave before their shift is over.

11. Wal-Mart 5 Rule Table Chart

12. Wal-Mart 5 Rule Graph Chart

13. Target • Founded on May 1st, 1962 by The Dayton Company in Roseville, Minnesota. • Upscale retail store. • Lost money in its beginning years but reported it’s first gain in 1965. • The first Target store to be built outside of Minnesota was in Glendale, Colorado.

14. Mistakes • In 2013 Target was hacked and over 40 million credit and debit cards were stolen. • Opened and then closed 133 stores in Canada leaving almost 18,000 people out of work.

15. Target 5 Rule Table Chart

16. Target Earnings per share line graph

17. Costco History: • July 12, 1976 – Originally opened under the name “Price Club” in a remodeled airplane hangar located in San Diego, California. • 1983 – Under new ownership, the name is officially changed to Costco. • 1984 - There are now Nine Costcos in Five states. Sales exceed 1 billion dollars. • 1985 – Costco’s first hot dog cart opens. • 2004 - Costco is the 5th largest retailer in the U.S. and 11th largest in the world. • 2013 – Costco opens two warehouses in Sydney and Melbourne Australia.

18. Costco’s Mistakes • Sold counterfeit rings and misinforming the customers that the rings were from Tiffany & Co. • A Costco in California had labeled and placed bibles under the Fiction department of the reading section. • Costco ordered a million jars of peanut butter be dumped in a landfill instead of being donated to the homeless / families in need.

19. Costco 5 Rule Table Chart

20. Costco 5 Rule Graph Chart

21. Our Stock Purchase Recommendation • Wal-Mart • Wal-Mart is a very popular store, that always has business. • Wal-Mart has high numbers in our stock comparisons. • Wal-Mart had a decrease in it stocks, but it shows they can quickly recuperate from decreases in stocks they will have. • Wal-Mart tries to be prepared for emergencies so that stocks wont take huge hits on shareholders.

22. Work Cited • http://www.morningstar.com/stocks/XNYS/WMT/quote.html • http://labor-employment-law.lawyers.com/employment-discrimination/wal-mart-a-target-for-employment-lawsuits.html • http://www.chron.com/news/houston-texas/article/TSU-grad-awarded-9-million-in-suit-against-1718987.php • http://www.dailydot.com/opinion/walmart-labor-unions-bad-company/ • http://www.readyratios.com/ • http://www.financeformulas.net/Dividends_Per_Share.html • http://tradingsim.com/blog/dividend-per-share/

23. Work Cited continued • https://corporate.target.com/about/history/Target-through-the-years • http://iveybusinessjournal.com/targets-big-mistake-mutated-dna/ • http://www.rebelcircus.com/blog/worst-mistakes-target-has-ever-made/ • http://www.theglobeandmail.com/report-on-business/small-business/going-global/four-things-startups-can-learn-from-target-canadas-mistakes/article24027185/ • http://www.morningstar.com/stocks/xnys/tgt/quote.html • http://www.costco.com.au/About/History.shtml • http://www.law360.com/articles/706684/citing-bad-press-costco-wants-tiffany-appeal-fast-tracked • http://blogs.wsj.com/corporate-intelligence/2013/11/20/costco-apologizes-for-a-biblical-mistake/

24. Work Cited continued • https://jonathanturley.org/2014/03/31/costco-orders-a-million-jars-of-peanut-butter-dumped-in-landfill-rather-than-donated-to-the-poor/