Mini Equity Research Report [WLO: 4] [CLOs: 1, 2, 3, 4] Many investment banks employ analysts to write equity research reports on public companies
to advise their clients on their stock investments. In many cases, an initial equity research
report is 20 to 50 pages long! For this class, you will focus on only three of the many important
sections typically included in an equity research report. Thankfully, your Mini Equity Research
Report will be much shorter than those published by investment banks!
In Week 1, you chose a publicly traded company to use throughout this class for the Mini Equity
Research Report. In the first section of the Mini Equity Research Report, you evaluate the
historical financial performance of the company (Week 1). In the second section of the Mini
Equity Research Report, you evaluate the companys performance using common financial
ratios, and you compare the company to the competitors performance with the same financial
ratios (Week 2). Finally, in Sections 3 and 4 of the report, you develop a value for the companys
stock and compare your value to the current market price of the stock (Weeks 3 and 4). Based
on the analysis you present in these four sections, you will develop your recommendation to
buy, hold, or sell the stock of this company.
It is very rare for one company to have only positive facts. Most companies have some good
facts and some weak facts. In Sections 1 and 2 of the Mini Equity Research Report, you will
analyze a variety of financial data for your selected company. As the equity analyst, it is your
responsibility to combine the positive and negative facts into one recommendation (buy, hold,
or sell). It is important to consider the importance of each fact and acknowledge that there is
no perfect answer. Your recommendation should be based on the strength of the positive facts
while recognizing the risks from the negative facts.
This week, you will write the introduction (including your stock recommendation) and the
conclusion of the Mini Equity Research Report. In addition, you will revise the four sections
from the first four weeks of class and combine them into this Mini Equity Research Report.
Finally, you will submit your final Appendices A, B, C, and D with the Mini Equity Research
Report.
Prepare:
Prior to beginning work on this final project,
Complete the Week 5 Learning Activity: Understanding Cost of Capital.
Review the feedback you have received on your assignments throughout this course.
Locate and revise (if necessary) all of your assignments from Weeks 1 through 4.
Write:
In your Mini Equity Research Report,
Write an introduction. In your introduction, include the following:
o State the name of the company and a brief description of what it does.
o State the current market price per share and total market capitalization of the
company.
o State two key historical financial performance facts about your company (you
can ascertain this information from your Week 1 Assignment 3, Section 1:
Financial Statement Analysis).
? Categorize the overall financial performance as strong, neutral, or weak.
? Justify your assessment based on the key facts.
o Summarize (briefly) the ratio performance of the company.
? Categorize the overall ratio performance as strong, neutral, or weak.
? Justify your assessment based on the key facts.
o Determine the valuation conclusion based on the constant growth formula in
Week 4, using the required rate of return derived from the CAPM.
o Determine your recommendation of buy, hold, or sell the stock of your chosen
company.
Include your revised Week 1 Assignment 3, Section 1: Financial Statement Analysis.
Include your revised Week 2 Assignment 3, Section 2: Financial Ratio Analysis.
Include your revised Week 3 Assignment, Section 3: Dividend Analysis and Preliminary
Valuation, Part 1: Dividend Analysis only
Include your revised Week 4 Assignment, Section 4: Valuation Conclusion.
Write a conclusion. In your conclusion, include the following:
o Summarize the analysis that was completed for the Mini Equity Research Report.
o State your recommendation of buy, hold, or sell the stock of your chosen
company.
o Summarize the key facts supporting your recommendation, including your
concluded stock price.
Include Appendices A, B, C and D.
Submission Format:
You need submit a total of five documents to Waypoint:
Mini Equity Research Report
Appendix A
Appendix B
Appendix C
Appendix D
The Mini Equity Research Report,
Must be eight to ten double-spaced pages in length including any tables or calculations
(but not including title and reference pages) and formatted according to APA Style (Links
to an external site.) as outlined in the Writing Centers APA Formatting for Microsoft
Word (Links to an external site.)
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