Stock Portfolio Project - Business Plan Example

Business 101 Investment Project Information Stock portfolio project Table of Content I Page ………………………………………………………………………… 2 II Table of Content …………………………………………………………………. 3 III Stock Portfolio Purchased from the Eight Groups...……………………………… 3 IV Portfolio Daily Performance for the Period October 9 – November 16, 2012…… 4 V Portfolio 52 week High/Low for the Period October 9 – November 16, 2012…... 5 VI Fortune 500 and Global 500 Ranking for Selected Stocks………………………. 6 VII Highlights from Current Press Releases and News articles ……………………... 6 VIII Overview on Company Stock Selected …………………………………………. 9 IX Stock Analysis and Selection …………………………………………………… 12 X Profit and Loss Statement for the Portfolio …………………………………….. 16 Work Cited ……………………………………………………………………………… 18 Stock Portfolio Project III Stock Portfolio Purchased from the Eight Groups Table 1 List of stock purchased for my portfolio from the 8 groups, volume purchased and initial investment Group Number Stock Name Stock Symbol Purchase Price Per Share ($) Number of Shares Purchased Total Initial Investment 1 John Deere & Co. DE 81.73 600 49,038 2 Sprint Nextel Corp. S 4.95 10,100 49,995 3 Citigroup C 34.60 100 3,460 4 Harley Davidson HOG 41.90 1,190 49,861 5 Starbucks SBUX 47.35 500 23,675 6 Toyota Motors TM 76.06 200 15,212 7 Research in Motion RIMM 7.80 6,400 49,920 8 FedEx Corp. FDX 85.58 1,000 8,558 Total 20,090 249,719 Balance 281 Source: Yahoo.com/Historical Prices, 2012 IV Portfolio Daily Performance for the Period October 9 – November 16, 2012 Table 2 Portfolio’s Daily Performance in $ for the Period October 9 – November 16, 2012 Date DE S C HOG SBUX TM RIMM FDX 11/16/2012 85.25 5.48 34.98 46.22 48.76 82.09 9.2 86.13 11/15/2012 85.39 5.54 35.21 46.59 48.43 80.26 8.79 86.54 11/14/2012 84.74 5.49 35.02 45.67 48.84 76.41 8.49 87.12 11/13/2012 85.69 5.58 36.16 45.53 50.31 77.87 8.4 90.46 11/12/2012 85.68 5.61 36.42 45.84 50.68 77.7 8.81 90.08 11/9/2012 84.29 5.55 35.93 45.29 50.96 78.65 8.54 89.73 11/8/2012 83.59 5.61 36 44.97 50.86 78.35 8.2 90.03 11/7/2012 84.13 5.62 36.05 46.51 51.81 79.68 8.24 91.51 11/6/2012 86.1 5.73 38.47 47.61 51.71 81.24 9.06 93.39 11/5/2012 85.89 5.75 37.32 47.34 51.01 81.35 8.9 92.84 11/2/2012 85.6 5.7 37.6 47.29 50.84 77.8 8.71 92.64 11/1/2012 86.87 5.61 37.95 47.61 46.62 78.05 8.7 93.01 10/31/2012 85.44 5.55 37.39 46.76 45.9 77.47 7.93 91.99 10/26/2012 85.47 5.49 36.6 46.12 45.87 77.36 7.57 90.69 10/25/2012 84.69 5.52 37.41 46.52 46.25 78.45 7.71 91.12 10/24/2012 84.31 5.62 37.3 46.34 45.26 77.37 7.52 90.83 10/23/2012 85.03 5.65 36.89 46.89 44.97 77.68 7.62 91.79 10/22/2012 85.89 5.68 37.72 43.53 45.3 78.97 7.69 91.48 10/19/2012 84.99 5.65 37.16 43.88 45.69 77.83 7.76 92.11 10/18/2012 86.86 5.78 38.42 44.53 47.41 78.51 7.84 93.49 10/17/2012 85.81 5.73 38.43 44 48.39 77.99 7.99 92.95 10/16/2012 84.56 5.69 37.25 43.2 48.96 77.32 7.83 91.92 10/15/2012 83.23 5.69 36.66 41.86 47.67 76.21 7.8 90.65 10/12/2012 82.44 5.73 34.75 41.42 47.18 74.67 7.8 90.4 10/11/2012 82.37 5.76 35.52 41.79 47.16 74.85 7.91 90 10/10/2012 81.19 5.04 35.14 41.9 46.95 74.5 7.76 89.99 10/9/2012 81.73 4.95 34.6 41.9 47.35 76.06 7.8 85.58 Source: Yahoo Finance, 2012 V Portfolio 52 week High/Low for the Period October 9 – November 16, 2012 Table 3 Portfolio 52 week High/ Low for the Period October 9 – November 16, 2012 Group Number Stock Name Stock Symbol Hi Lo 1 John Deere & Co. DE 87.50 81.63 2 Sprint Nextel Corp. S 6.04 4.9 3 Citigroup C 38.72 34.17 4 Harley Davidson HOG 47.94 41.21 5 Starbucks SBUX 51.94 44.27 6 Toyota Motors TM 82.28 74.27 7 Research in Motion RIMM 9.3 7.46 8 FedEx Corp. FDX 94.26 85.15 Source: Yahoo Finance (2012) VI Fortune 500 and Global 500 Ranking for Selected Stocks Table 4 Stocks’ Ranking on Fortune 500 and Global 500 Group Number Stock Name Stock Symbol Ranking on Fortune 500 Ranking on Global 500 1 John Deere & Co. DE 97 348 2 Sprint Nextel Corp. S 90 328 3 Citigroup C 20 60 4 Harley Davidson HOG 5 Starbucks SBUX 227 6 Toyota Motors TM 10 7 Research in Motion RIMM 8 FedEx Corp. FDX 70 263 Source: CNN Money (2012) VII Highlights from Current Press Releases and News articles John Deere (DE) According to John Deere’s News Release for November 2012, 4th quarter earnings was $ 688 million while full financial earning reached a record $ 3.065 billion driven by improved sales and revenue. Increasing demand for US farm equipment and recovery of construction industry propelled the sales while global demand saw sales increase by 14 %. Sprint Nextel Corp. News Release on 3rd quarter 2012 financial results on October 25, 2012 showed revenues hit $ 7.3 billion during the quarter which 6% higher than last year. Net loss stood at $ 767 million while operating income before depreciation and Amortization (OIBDA) was $ 1.28 billion. Wireless service revenue growth increased by 14% from the previous year which is the 8th consecutive year of double digit growth annually. Capital expenditure was substantial at $ 1.49 billion. The company also registered increased sales from iphones (40% new customers), postpaid Nextel and prepaid platforms. New 4G LTE network has been successfully rolled out in 32 cities and 115 cities to be connected in the next few months. Citigroup Citigroup reported a net income of $ 468 million and $ 14 billion as revenue for 3rd quarter in 2012 and a pre-tax loss of $ 4.7 billion from previous sale of 14% temporary impairment of the carrying value. The revenue is 3% higher than that of 2011 while book value per share and tangible book value per share increased by 5% and 6% respectively from the previous period. Harvey Davidson Income from continuing operations for the 3rd quarter increased by 12.1% to $183.6 million on consolidated revenue of $ 1.40 billion for the period ending 30 September, 2012. Motorcycle sales and registration in US increased from 231,125 to 239,940 over last one year to 30th September 2012 and decreased in Europe from 241,498 in August 2011 to 223,860 by August 2012. Earnings per share within the same period stood at $0.78. Retail sales increased by 6.2% in the US and 5.4% internationally though unit sales decreased in US. The company installed new ERP system to help increase its productivity and efficiency. Financial and insurance business units also continued to register significant improvements. Starbucks Starbucks announced acquisition of Teavana, a leading tea outlet with over 300 stores worldwide and hopes to replicate it success in coffee business and purchase of Tazo Tea in 1999, which brings in $ 1 billion in annual sales. The company in its 3rd quarter news release announced net revenue increased by 13% to $ 3.3 billion; EPS by 19% to $0.43 and opened 231 new stores globally. Operating expenses stood at $2.86 billion while net earnings were $333.3 million. Fourth quarter revenue is expected to increase by 10-13% and 1,200 new stores opened. Toyota Motor Corporation From the 6 months news release, units sold in first quarter for 2012 increased by 1.490 million units to 4.516 million units. As a result, net revenue increased by 36.1%. Operating income increased to 693.7 billion Yen from a loss of 32.6 billion. Success in marketing has boosted the sales and revenues in all the continents. Research in Motion First quarter results for fiscal year 2013 indicated that, RIM revenue was down by 43% to $ 2.8 billion from $4.9 in the same quarter for 2012. The decline is due to global market challenges and completion. Operating expenses stood at $ 1.43 billion. RIM sold 7.8 million Blackberry smart phones and 260,000 BlackBerry PlayBook tablets. Introduction on BlackBerry 10 in early 2013 is expected to help the company recoup its lost ground given that it has a customer base of 78 million, high infrastructural development and wider network. Heavy investment in CORE program also affected the bottom line but operational and workforce restructuring are also expected to reduce the losses. Net loss in operating income expected in second quarter. FedEx Corporation New Release for first quarter fiscal 2013 showed that revenue increased by 3% to $10.79 billion from $10.52 billion the previous year while operating income increased by 1% to $ 742 million. Operating expenses stood at $ 10.05 billion, net margin was 6.9%, a reduction of 0.1% while net income reduced by 1% to $ 459. FedEx freight increased during the period. EPS is expected to be $1.30 to $1.45 per diluted share. Increase in shipping rate by 3.9% by January 2013 for domestic and export markets are expected to increase revenues. VIII Overview on Company Stock Selected John Deere John Deere is leading global producer of farm and construction machineries and related equipments and is head quartered at Deere & Company World Headquarters One John Deere Place in Moline, 61265-8098 Illinois. Its website address is www.deere.com. The company is over 175 years old and is currently headed by Samuel R. Allen as the CEO while company’s products include tractors, riding mowers, snow equipment among others. Revenue for the company is over $1 billion with about 14% annual increase in sales with prospects of increases in 2013. Sprint Nextel Sprint Nextel Corp is a global leader in telecommunication and technology and offers both wireless and fixed communication services to over 56 million customers. The company has an experience spanning over 120 years in customer satisfaction The company’s head quarter is located in Dallas and physical address is P.O. 660075, Dallas TX 752266-0075. The company’s CEO is Dan Hesse. Web address for the company is www.sprint.com. Products and service range include wireless 4G service, mobile data services and prepaid services. Citigroup Citigroup is a financial service provider to consumer and institutional business all over the world. Company is headed by Vikram Pandit as the CEO and head office is located at Citi, 399 Avenue Park, New York, NY 10043. Its web address is www.citigroup.com. The company offers retail and commercial banking, mortgages, securities and investment banking. Revenue base stands at $ 14 billion annually with over $ 10 billion in expenses and expenditure. Employee base for the company stands at an estimated 400,000 globally. Its competitors include Barclays and JP Morgan. Harley Davidson Harley Davidson is the world leader in heavy weight motorcycle manufacturing, spare parts, apparel and dealership in addition to offering financial and insurance services. The company head office is on 3700 W. Juneau Avenue, Milwaukee, WI 53208 in US. The company operates in US, Europe and Asia with over sales of over 500,000 units of heavy motorcycle. Revenue stands at $ 1.45 billion with operating incomes of about $ 185 million Starbucks The company specializes in sale of high end coffee in US and Europe and is head quartered in US at Seattle and its postal address is 3717, Seattle, WA 98124-3717, web address www.starbucks.com. Its CEO is Howard Schultz who has taken the business a notch higher. The company has over 5,000 coffee and tea stores across the globe. Revenues stand at $3.3 billion and operating expenses at $2.86. Toyota Motor Corporation The company started in Japan and specializes in medium level automobiles and is among the top three producers. Its head office is in Tokyo at 1 Toyota – Cho, Toyota City, Aichi Prefecture 471-8571, Japan. Its website is www.toyota-global.com. Its CEO (President) is Akio Toyoda. Company’s operating income stands at 693 billion yen. Units sold in first quarter for 2012 increased by 1.490 million units to 4.516 million units. Its main competitor is General Motors Corporation. Research in Motion The company leads in wireless technology development globally with is head quarter in US at Waterloo, 5000 Riverside Drive, Irving, TX 75039. The company introduced the black berry technology in 1999. Its website is www.rim.com. RIM President and CEO is Thorstein Heins. Key products include; black berry smart phones, accessories, Black berry 6 OS and 7 OS, black berry App world among others. The company’s revenue stands at $ 2.8 billion and expenses at $ 1.43 billion. Its competitors include; Nokia, Samsung and Apple who are eating into its market share resulting into revenue reduction. FedEx FedEx is a shipping and logistic company with operations globally. It’s headquarter is in US at Memphis, TN, P.O. Box 727, Memphis, TN, 38194. The company specializes in logistics, shipping services, marketing products, and copy and print equipment and services. Its CEO is Fredrick W. Smith. Revenue stands at $10.79 billion and operating expenses at $ 10.05 billion. Major competitors include DHL, UPS, and Well Fargo IX Stock Analysis and Selection John Deere (DE) John Deere is among the leading farm and construction machine manufacturer in the world. According to John Deere’s News Release for November 2012, 4th quarter earnings was $ 688 million while full financial earning reached a record $ 3.065 billion driven by improved sales and revenue. Increasing demand for US farm equipment and recovery of construction industry propelled the sales while global demand saw sales increase by 14 %. Given the firm forecasted sales to increase the stock was selected. Sprint Nextel Corp. News Release on 3rd quarter 2012 financial results on October 25, 2012 showed revenues hit $ 7.3 billion during the quarter which 6% higher than last year. Net loss stood at $ 767 million while operating income before depreciation and Amortization (OIBDA) was $ 1.28 billion. The company also registered increased sales from iphones (40% new customers), postpaid Nextel and prepaid platforms. New 4G LTE network has been successfully rolled out in 32 cities and 115 cities to be connected in the next few months. The rapid growth of the company and telecommunication industry globally made the stock a good buy. The company is a value stock as its lowly priced than the value of the company (Mladjenovic, 12). Citigroup The counter is in the financial segment and reported a net income of $ 468 million and $ 14 billion as revenue for 3rd quarter in 2012 and a pre-tax loss of $ 4.7 billion from previous sale of 14% temporary impairment of the carrying value. The revenue is 3% higher than that of 2011 while book value per share and tangible book value per share increased by 5% and 6% respectively from the previous period. Due to its global spread and diverse business units it was selected as it can withstand global financial shocks. Harvey Davidson The company is a leader in manufacture, supply and servicing of heavy motorcycle in the world as well as being financial and insurance provider. It’s operating for the 3rd quarter increased by 12.1% to $183.6 million on consolidated revenue of $ 1.40 billion for the period ending 30 September, 2012 (News Release, 1). Sales units in US increased from 231,125 to 239,940 over last one year to 30th September 2012 and decreased in Europe from 241,498 in August 2011 to 223,860 by August 2012. Earnings per share within the same period stood at $0.78. Retail sales increased by 6.2% in the US and 5.4% internationally though unit sales decreased in US. Its consistent growth in income and cost reduction approaches made the counter attractive. Starbucks Starbucks specializes in sales of high value coffee. The company announced acquisition of Teavana, a leading tea outlet with over 300 stores worldwide and hopes to replicate it success in coffee business and purchase of Tazo Tea in 1999, which brings in $ 1 billion in annual sales. The company in its 3rd quarter news release announced net revenue increased by 13% to $ 3.3 billion; EPS by 19% to $0.43 and opened 231 new stores globally. The company was selected as a growth stock given its ability to increase in income growth from recent acquisitions and increased outlet roll out (Mladjenovic, 12). Toyota Motor Corporation It’s a leading motor vehicle manufacturer in the world and ranked number 10 on Global 500 Ranking 2012. From the 6 months news release, units sold in first quarter for 2012 increased by 1.490 million units to 4.516 million units. As a result, net revenue increased by 36.1%. Operating income increased to 693.7 billion Yen from a loss of 32.6 billion. Success in marketing has boosted the sales and revenues in all the continents. It ability to grow revenue consistently by withstanding global turbulence made it good growth stock purchase. Research in Motion The company leads in telecommunication innovations especially with BlackBerry technology. First quarter results for fiscal year 2013 indicated that, RIM revenue was down by 43% to $ 2.8 billion from $4.9 in the same quarter for 2012. The decline is due to global market challenges and completion. Introduction on BlackBerry 10 in early 2013 is expected to help the company recoup its lost ground given that it has a customer base of 78 million, high infrastructural development and wider network. Heavy investment in CORE program also affected the bottom line but operational and workforce restructuring are also expected to reduce the losses. Net loss in operating income expected in second quarter. Due to this negative report, the company hit a 52 week low and I decided to buy because it was at its support level the counter is lowly price thus considered for a value stock. FedEx Corporation New Release for first quarter fiscal 2013 showed that revenue increased by 3% to $10.79 billion from $10.52 billion the previous year while operating income increased by 1% to $ 742 million. Operating expenses stood at $ 10.05 billion, net margin was 6.9%, a reduction of 0.1% while net income reduced by 1% to $ 459. Increase in shipping rate by 3.9% by January 2013 for domestic and export markets are expected to increase revenues. The counter was purchased due to its consistency in revenue growth and prospects of high returns once the rate increase is put in place. X Profit and Loss Statement for the Portfolio Table 5 Profit and Loss for the Stock Portfolio Group Number Stock Name Stock Symbol Purchase Price Per Share ($) Closing/ Selling Price Profit/ Loss per Share No. of Stocks Purchased Total Profit/ Loss 1 John Deere & Co. DE 81.73 85.25 3.52 600 2,112 2 Sprint Nextel Corp. S 4.95 5.48 0.53 10,100 5,353 3 Citigroup C 34.60 34.98 0.38 100 38 4 Harley Davidson HOG 41.90 46.22 4.32 1,190 5,140.8 5 Starbucks SBUX 47.35 48.76 1.41 500 705 6 Toyota Motors TM 76.06 82.09 3.03 200 909 7 Research in Motion RIMM 7.80 9.90 2.10 6,400 13,440 8 FedEx Corp. FDX 85.58 86.13 -0.55 1,000 (550) Profit from capital gain 27,147.8 Dividend earnings Citigroup 0.01 100 1 Starbuck 0.21 500 105 Total Profit 27,252.8 Source: Yahoo.com/Historical Prices, 2012 The portfolio made a total profit of $ 27,252.80 where $ 27,147.8 came from capital gain and $ 106 from dividend earnings. The portfolio went up possibly due to election on 4th November since most counters were down before the election due to market uncertainty. Selection of the right counter needs to be supported by good research in technical and fundamental analysis. Diversification of the stocks in a portfolio is also important in minimizing risk. In addition, lowly priced stocks are less volatile and provide huge returns per $ invested. The investment goal at the moment would be to buy and hold the portfolio for the medium term. Work Cited CNN. Fortune500:2012: “Annual Ranking of America’s Largest Corporations.” CNN. Web. 2012. CNN. “Global 500 Ranking 2012.” CNN. Web. 2012. DeGrande, JoAnn.” Starbucks Reports record Third Quarter Results.” News Release. Starbucks Corporation, July 26, 2012. Web. 2012 FedEx. “FedEx Corp. Reports First Quarter Results: FedEx Express Announces 2013 Rate Increase. FedEx Corp. News Release, September 18, 2012. Web. 2012 Golden, Ken.” Deere Reports Record Fourth Quarter Earnings of $ 688 Million.” John Deere. News Release. Web. 23 Nov. 2012 Heins, Thorstein. Research in Motion reports First Quarter Fiscal 2013 Results. RIM. News Release, June 28, 2012. Web. 2012 Klein, Bob. “Harley-Davidson Reports Third Quarter and Nine Month Results. Harley-Davidson, News Release, October 23, 2012. Web. 2012 Mladjenovic, Paul. Stock Investing for Dummies: Managing Everything Made Easier, 3rd ed. New York: John Wiley & Sons Inc. Web. 2009 Ozawa, Satochi. “TMC Announces First Half Fiscal Year 2013 Financial Results. Financial Results, Toyota Motor Corporation, July 26, 2012. Web. 2012 Pandit, Vikram. “Citigroup Reports Third Quarter 2012 Earnings per Share of $0.15; $1.06 Excluding CVA/DVA, Loss on MSSB and Tax Benefit.” Citigroup, News Release, October 15, 2012. Web. 2012 Scott, Sloat. “Sprint Nextel Reports Third Quarter 2012 Results.” Sprint Nextel Corp. News Release, October 25, 2012. Web. 2012 Yahoo. Yahoo Finance”. Yahoo. Web. 2012. < www.finance.yahoo.com/q/bc?s > Read More