Analysis of SEEK Limited, Telstra Limited and Ansell Limited - Essay Example

 Financial Analysis of SEEK Limited, Telstra Limited and Ansell Limited 1. EXECUTIVE SUMMARY This essay discusses about three stock companies (Limited, Telstra, and Ansel). This will be done through, providing a brief background of each company, calculation of its expected return as well as standard deviation using the historical for each company’s selected stocks. The data use will be ending in June 2015. Later, 30different portfolios will be constructed which will entail various weights of the above three chosen three stock companies. This essay will also attempt to determine the expected rate of return as well as standard deviation for every asset. Every result will be justified and the interpreted. To be specific, the following will be the sections of my essay: Introduction (company background, 2. DATA COLLECTION The data used in this article ranged from 2005-2015, that is 10 years. The data is given in the appendix section for every Company. Why 10 year data was most suitable? Projections of stocks are principally valuable for companies to schedule and make priorities of future investments. Within the forecast of stocks upcoming period of after 10 years or over, it’s very important to employ the facts of previous period trends with prevalence rates and in risky markets. In the majority of latest published researches the duration that time range was evaluated was above 10 decades while a few used 3-8 years. This brings the doubt concerning what’s the optimal time duration which must be utilized for evaluation of time changes and forecasts. Another importance why I used the 10 year period data is that if the period is too short, there may be just the data for bull market, for instance from 201-2015. Moreover, a short time period data may result in inadequate information which in turn may result in misinterpretation. Therefore, I used the longer time period to select stock of the three companies to forecast the upcoming rates in order that legitimate forecasts of stocks may be possible. The data used for the chosen three companies: SEEK Limited, Telstra Corporation, and Ansell were for the period of 2005-2015 to assess as well as make projections 3. COMPANY EVALUATION 3.1. SEEK Limited: Business Summary SEEK Limited manages internet/web employment markets inside Brazil, Hong Kong, Australia, China, New Zealand, Malaysia Thailand, Philippines, Singapore, and globally (Yahoo! Inc., 2015). The corporation links employers and job hunters with job openings and equivalent overhauls online; and delivers as well as offers holiday education and university courses. Also, it provides online job marketing functions. The corporation was formed during 1997 and its headquarters are in Australia, Melbourne state (Australian Broadcasting Corporation & Nelvana (Firm), 2006). 3.1.1. Choice of sampling frequency In calculating SEEK Limited’ standard deviation and expected return, I used monthly sampling size which is the optimal allowance sampling frequency founded considerations of cost, and a single sample every month gathered at about similar moment of month in 10 sample design. Thus monthly sampling has the greatest influence, for the reason that it offer the mainly trend data for a particular cost. 3.1.2. Expected rate of Return and SD (Standard Deviation) for SEEK Limited The expected return and standard deviation were calculated automatically using the Microsoft Excel software. It was found that the rate of return for SEEK Company is 0.022926 and the SD was 0.106283126 3.1.2.1. Interpretation of expected return The expected rate of return refers to sum an investor expect to receive after venturing in a investment that has different recognized or anticipate return rates (Nichols, 2011). The higher the rate of return, the more profitable the investment will become. This Seek has an expected rate of return of 2.2926. Since this return it is positive, we can deduce for now that the investing in SEEK limited will be profitable. 3.1.2.2. Interpretation of standard deviation Standard deviation refers to the statistical measure which shed light about historical unpredictability (Standard Deviants & Goldhil Educational, 2005). For instance, volatile stocks will contain a big standard deviation whereas a standard deviation of stable stocks will be lower. For SEEK limited, its standard deviation is 0.106283126 which is less than one. This is much lower and we can deduce that the stocks of SEEK Limited Company are stable. This implies that an investor opting to invest in the stock of SEEK limited; will be at less risk of getting a loss. 3.1.3. Investment strategy: CML SEEK thinks basics eventually drive marketplaces during the temporary-period (one moth), as well as an avant-garde viewpoint that offsets the risk as well as return against marketplace stages is essential towards an active strategy of investment (Australian Broadcasting Corporation & Nelvana (Firm), 2006). SEEK’ investment technique pivots just about its CML (Capital Marketplace Line), that symbolizes its fundamentally-oriented anticipations of comparative risk or profit across investment groups during a avant-garde 10-year duration. This Capital Marketplace Line is created as well as maintained with SEEK limited Board on a monthly basis, as has acted as the company’s key instrument for choices that affect the regulation of its commodities since 2005. Such perceptions get shared via SEEK Limited flagship Monthly Publication (Australian Broadcasting Corporation & Nelvana (Firm), 2006). Using monthly approach, the SEEK Limited forms Multi-Investment Strategy through integrating the Capital Marketplace Line outlook with extra temporary insights as of discussing disparities of views in its international, multi-investment class team environment – a group of sessions spanning flat wages, equity along with substitute investment class professionals. This determines SEEK Limited’s risk segmentation along with confidences towards a near-term venture scope of 12 months. Also, the company carries out asset execution seminars to allow disciplined as well as thorough implementation of its opinions, making sure that they are in line with their goals, investment policies, in addition to risk and return anticipations expectations of every investment (Australian Broadcasting Corporation & Nelvana (Firm), 2006). 3.2. Telstra Company Limited Telstra Company Limited offers telecommunications along with information overhauls to companies, governments, societies, and people within Australia as well as globally (Paul Budde Communication Pty. Ltd, 2001). The corporation works via Telstra Trading, Global venture with overhauls, Telstra activities, along with Telstra segments of Wholesale. It provides telecommunication commodities of different variety, services, along with solutions including phones, fixed as well as portable broadband, pay TV; information and web practice networks; internet apps as well as services, like controlled network, integrated infrastructures, cloud computing, industry services, and unified services; in addition to crossbreed fiber coaxial telecommunication (Yahoo! Inc., 2015). The corporation too offers cable commodities to shippers, transportation service contractors, and online service practitioners; and integrated medical Information Technology system for the health industry. Likewise, it provides electronic media information services; digital Medical services for basic treatment, aged along with residential treatment, care homes, radiology plus pathology, pharmaceutical services, native care, as well as telecare; marketing services; with network solutions, like controlled connectivity services, along with cable, voice, plus satellite services. The corporation serves about 16.7M small scale mobile consumers, six million predetermined voice clients, and 4.2 M small scale predetermined data clients. It discharges its operations via 3721 retail shops, 84 trading centres, along with 138 trade and company partners, and via 19,700 trading points. The corporation was previously called Australia and Abroad Data Company Ltd and adjusted into Telstra Cor. Ltd during 1993. Finally, Telstra Company Limited got established during 1901. It is located in Australia, Melbourne Estate (Yahoo! Inc., 2015). 3.2.1. Choice of sampling frequency In calculating Telstra’ standard deviation and expected return, I used monthly sampling size which is the optimal allowance sampling frequency founded considerations of cost, and a single sample every month gathered at about similar moment of month in 10 sample design. Thus monthly sampling has the greatest influence, for the reason that it offer the mainly trend data for a particular cost. 3.2.2. Expected Rate of Return and SD for Telstra Limited The rate of return and SD were calculated automatically using the Microsoft Excel software. It was found that the Rate of Return for Telstra Company was 0.011595307 and the SD was 0.046103228 3.2.2.1. Interpretation of expected return The expected rate of return refers to sum an investor expect to receive after venturing in an investment that has different recognized or anticipate return rates. The higher the rate of return, the more profitable the investment will become (Nichols, 2011). This Seek has an expected rate of return of 1.1595307%. Since this expected return is positive, we can deduce for now that the investing in Telstra limited will be profitable. But it’s less profitable than that of SEEK Limited. So an investor will opt to invest in SEEK Limited than in Telstra. 3.2.2.2. Interpretation of standard deviation Standard deviation refers to the statistical measure which shed light about historical unpredictability (Standard Deviants & Goldhil Educational, 2005). For instance, volatile stocks will contain a big standard deviation whereas a standard deviation of stable stocks will be lower. For Telstra Company limited, its standard deviation is 0.046103228. Like SEEK, Telstra’s SD is also less than one. This is much lower and we can deduce that the stocks of Telstra Limited Company are stable. This implies that an investor opting to invest in the stock of Telstra limited; will be at less risk of getting a loss. 3.2.3. Investment strategy: CML Telstra believes that basics eventually drive marketplaces during the temporary-period (one moth), as well as an avant-garde viewpoint that offsets the risk as well as return against marketplace stages is essential towards an active strategy of investment (Telstra Sale Company Limited & Telstra, 2007). Telstra’s investment technique pivots just about its CML (Capital Marketplace Line), that symbolizes its fundamentally-oriented anticipations of comparative risk or profit across investment groups during a avant-garde 10-year duration. This Capital Marketplace Line is created as well as maintained with Telstra limited Board on a monthly basis, as has acted as the company’s key instrument for choices that affect the regulation of its commodities since 2005. Such perceptions get shared via Telstra Limited flagship Monthly Publication. Using monthly approach, the Telstra Limited forms Multi-Investment Strategy through integrating the Capital Marketplace Line outlook with extra temporary insights as of discussing disparities of views in its international, multi-investment class team environment – a group of sessions spanning flat wages, equity along with substitute investment class professionals (Telstra Sale Company Limited & Telstra, 2007). This determines Telstra Limited’s risk segmentation along with confidences towards a near-term venture scope of 12 months. Also, the company carries out asset execution seminars to allow disciplined as well as thorough implementation of its opinions, making sure that they are in line with their goals, investment policies, in addition to risk and return anticipations expectations of every investment (Telstra Sale Company Limited & Telstra, 2007). 3.3. Ansell Limited Ansell Limited, along with its ancillaries, devices, creates, and produces defensive solutions globally. The corporation works through Medical, Sexual fitness, industrial, and Solitary markets (Yahoo! Inc., 2015). The Industrial sector offers body, hand, and foot protective services for auto, chemical, design, diving, improvised, life technology as well as electronics, dietary processing, equipment and machines, hygiene, quick responders, domestic products, metal manufacture, military, shipment, along with gas, oil, as well as excavation sectors. The Health sector provides sharps protection goods, personnel and the sick ergonomics, water and trip control overhauls, along with veterinary, surgery, test, along with dental protections for medical doctors as well as the sick (Yahoo! Inc., 2015). The segment of Sexual Fitness offers condoms, lubrications, and tools for different state and public institutions. The Solitary Use sector produces and advertises solitary use leg/hand safety solutions in favour of living technologies and auto aftermarket sectors. The corporation was previously referred to Pacific Dunlop LLTD and adjusted its name onto Ansell LMT during 2003. Ansell LMT was established during 1889 and its headquarters are found in Australia (Yahoo! Inc., 2015). 3.3.1. Choice of sampling frequency In calculating Ansell Limited’ standard deviation and expected return, I used monthly sampling size which is the optimal allowance sampling frequency founded considerations of cost, and a single sample every month gathered at about similar moment of month in 10 sample design. Thus monthly sampling has the greatest influence, for the reason that it offer the mainly trend data for a particular cost. 3.3.2. Expected Rate of Return and SD for Telstra Limited The rate of Return and SD were calculated automatically using the Microsoft Excel software. It was found that the rate of Return for Ansell Limited is 0.010785789 and the SD was 0.064807707 3.3.2.1. Interpretation of expected return The expected rate of return refers to sum an investor expect to receive after venturing in an investment that has different recognized or anticipate return rates. The higher the rate of return, the more profitable the investment will become (Nichols, 2011). This Seek has an expected rate of return of 1.0785789%. Also, since this return it is positive, we can deduce for now that the investing in Telstra limited will be profitable. But it’s less profitable than that of SEEK Limited and almost equal to that of Telstra. So an investor will still opt to invest in SEEK Limited than in Telstra and Ansell because they have low expected rates of return. 3.3.2.2. Interpretation of standard deviation Standard deviation refers to the statistical measure which shed light about historical unpredictability (Standard Deviants & Goldhil Educational, 2005). For instance, volatile stocks will contain a big standard deviation whereas a standard deviation of stable stocks will be lower. For Telstra Company limited, its standard deviation is 0.046103228. Like SEEK and Telstra, the SD for Ansell Limited is also less than one. This is much lower and we can deduce that the stocks of Ansell Limited Company are stable. This implies that an investor opting to invest in the stock of Ansell Limited will be at less risk of getting a loss. 3.3.3. Investment strategy: CML Ansell Limited believes that basics eventually drive marketplaces during the temporary-period (one moth), as well as an avant-garde viewpoint that offsets the risk as well as return against marketplace stages is essential towards an active strategy of investment (Datamonitor (Firm), 2000). Telstra’s investment technique pivots just about its CML (Capital Marketplace Line), that symbolizes its fundamentally-oriented anticipations of comparative risk or profit across investment groups during a avant-garde 10-year duration. This Capital Marketplace Line is created as well as maintained with Ansell Limited Board on a monthly basis, as has acted as the company’s key instrument for choices that affect the regulation of its commodities since 2005. Such perceptions get shared via Ansell Limited flagship Monthly Publication (Datamonitor (Firm), 2000). Using monthly approach, the Ansell Limited forms Multi-Investment Strategy through integrating the Capital Marketplace Line outlook with extra temporary insights as of discussing disparities of views in its international, multi-investment class team environment – a group of sessions spanning flat wages, equity along with substitute investment class professionals (Datamonitor (Firm), 2000). This determines Ansell Limited’s risk segmentation along with confidences towards a near-term venture scope of 12 months. Also, the company carries out asset execution seminars to allow disciplined as well as thorough implementation of its opinions, making sure that they are in line with their goals, investment policies, in addition to risk and return anticipations expectations of every investment (Datamonitor (Firm), 2000). 4. CONCLUSION The aim of this portfolio was to select three Companies, extract their data and use it to calculate standard deviation and expected rate of return. The background or three companies (SEEK Limited, Telstra Limited and Ansell Limited) were discussed. Also, their expected returns and standard deviations were also discussed and interpreted. The data used in this research ranged from 2005-2015 June. The rationale for choosing data for 1o year period as too discussed. Moreover, the advantage of choosing monthly sample size was also justified. Finally, CML (investment strategies) for the three companies were also covered. 5. REFERENCES Australian Broadcasting Corporation & Nelvana (Firm). (2006). Max & Ruby. Australia: Australian Broadcasting Corp. Datamonitor (Firm). (2000). Ansell Limited. New York, NY: Datamonitor. Nichols, E. (2011). Rate of return. Washington: Public Utilities Reports, Inc. Paul Budde Communication Pty. Ltd. (2001). Telco company profiles Australia. Bucketty, N.S.W: Paul Budde Communication Pty. Ltd. Standard Deviants & Goldhil Educational. (2005). The Standard Deviants present statistics. Camarillo, Calif: Goldhil Educational. Telstra Sale Company Limited., & Telstra (Firm). (2007). Annual report for the period ended 30 June. Canberra: Telstra Sale Company Limited. Yahoo! Inc. (2015). Yahoo! [Santa Clara, CA]: [Yahoo! Inc.]. Retrieved on October 16, 2015 from: Yahoo! Inc. (2015). Yahoo! [Santa Clara, CA]: [Yahoo! Inc.]. Retrieved on October 16, 2015 from: Read More