...REIT. Real Estate Investment Trust (REITs) Real Estate Investment Trust (REITs) invests in and own properties by offering investors a highly liquid method of investing in high-density markets. Most REITs earn their revenue from property rent and leases. In order to boost real estate investments, REIT receives special tax consideration for investing in highly liquid market i.e. if more than 75% of their profits are generated through rents from real estate property and they distribute at least 90% of their current period profits as dividend to shareholders, then the trust will not be subjected to corporate tax. Advantages and Disadvantages of Public Real Estate The advantages of a REIT are as follows: a) Liquidity: Public REITs are more liquidate as compared to private REITs. Public REIT shareholders can easily exchange their shares in the stock exchange. b) Low sales commission: Brokers charge low sales commission on public REITs as compared to private REITs, which provides an opportunity for investors to retain high cash flows in order to invest in further shares. c) Information easily available: The information of public REIT is easily available as compared to private REIT; which will benefit the investors in its valuation and in future potential decisions. The disadvantages that need to be considered when investing in a REIT are: a) High agency...
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...The Aim of the Course To develop and apply technologies for valuing firms and for strategic planning to generate value within the firm. • • Features of the approach: A disciplined approach to valuation: minimizes ad hockery – Built on theoretical and empirical findings from scientific research I ‘_ Marries fundamental analysis and financial statement analysis – Exploits accounting as a system for measuring value added – Exposes good (and “bad”) accounting from a valuation perspective L Financial Statement Analysis and Security Valuation • • • Integrates financial statement analysis with corporate finance Focuses on technologies that can be used in practice – Based on real world examples Adopts activist point of view to investing – The market may be inefficient 0-1 What Will You Learn from the Course Part I Financial statements and valuation Ch. 1-7 • How intrinsic values are calculated • What determines a firm’s value • How businesses are analyzed to assess the value they create • How financial analysis is developed for strategy and planning • The role of financial statements in determining firms’ values • How to pull apart the financial statements to get at the relevant information • How ratio analysis is employed in valuation • How growth is analyzed and valued • How to calculate the P/E and P/B ratio and what they should be • The value of operations • How to make forecasts and develop valuations • How to assess the quality of the accounting 0-2 ...
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...Project Number: DZT0517 Stock Market Trading An Interactive Qualifying Project Report Submitted to the faculty of the Worcester Polytechnic Institute in partial fulfillment of the requirements for the Degree of Bachelor of Science by ___________________________________________ Meng-Yu Ni Date: August 2006 Approved by: __________________________ Professor Dalin Tang Project Advisor 1 Abstract Using the information from the internet and published books, a general understanding about stock market and trading strategies was obtained. The knowledge and trading strategies were applied in the market in a stock market simulation to get real-time trading experience. Experiences learned from using trading methods in this simulation will help me to become a better investor in the future. 2 Acknowledgement First, I want to thank my parents who gave me the opportunity to study at Worcester Polytechnic Institute in USA. Second, I would like to thank my advisor, Dalin Tang, who gave me advices, and help me during this whole project time. Thirdly, I want to thank Worcester Polytechnic Institute for giving me opportunity to do this project, which made me to learn more things from outside of classes by myself. Finally, I would like to thank all the people who gave me some help when I needed it. 3 Table of contents Abstract ........................................................................................................................... 2 Acknowledgement...
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...its industry is broken and often under a regulatory change. TeamSystem controls 14% of the market with 28,000 clients and have high customer retention rate. (T-2nd most). Private equity investments are capital invested in public which are not quoted on public exchange and are in private placement basis and are not in public markets. Also, private equity managers use negotiations for holding a large number of shares, joining in monitoring and advising for companies where funds invested in, gain their benefit by premium, bonds earnings. This technique gives them the opportunity to increase returns by openly manipulating the company and ultimately generating value creation and the eventual exit from the investment. Depending on investment goals and portfolio’s size, investors might choose their investment method by investing directly or using funds of funds. Problem Formulation In February 2000, Louis Elson, the managing partner for Palamon Partners...
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...PURWANINGRUM CASE 3-1 Cash Flow Analysis – Orthodontic Centers of America 1. Actual cash collection for year 1998 to 2000: | 2000 | 1999 | 1998 | Total Receivables | 3.535.000 | 87.563.000 | 66.477.000 | net change | (84.028.000) | 21.086.000 | 66.477.000 | | | | | Patient prepayments | - | - | 4.326.000 | net change | - | (4.326.000) | 4.326.000 | | | | | Net Revenue | 268.836.000 | 226.290.000 | 171.298.000 | Less: change in account receivable | 84.028.000 | (21.086.000) | (66.477.000) | Plus: change in advances | - | (4.326.000) | 4.326.000 | Actual Cash Collections | 352.864.000 | 200.878.000 | 109.147.000 | 2. (i) Comparison of cash collection with revenue reported for each year: | 2000 | 1999 | 1998 | Cash Collections | 352.864.000 | 200.878.000 | 109.147.000 | Reported Revenue | 268.836.000 | 226.290.000 | 171.298.000 | % Change | 31,26% | -11,23% | -36,28% | Difference | 84.028.000 | (25.412.000) | (62.151.000) | (ii) Comparison of cash collection with revenue using pre-Januay 1, 2000 recognition method: | 2000 | 1999 | 1998 | ...
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...Value investing is the strategy of purchasing an asset which is trading at a significant discount from its determined intrinsic value. It has long been regarded as a low risk method of providing outstanding investment returns (Klarman 2001). The investment strategy was described by Benjamin Graham and David Dodd in their book, Security Analysis (1940, p. 724). Over subsequent decades the investment approach has evolved utilizing varying fundamental methodologies but always maintaining the principle of investing when a discount to intrinsic value exists. Graham and Dodd (1940, p. 368) referred to this principle as the 'margin of safety'. This essay will explore the various methodologies, expand on the 'margin of safety' concept and discover the factors that have led to the success of the exponents of value investing. Bierig’s (2000) assessment of the Graham and Dodd approach indicated that a value investor doesn’t just follow share market fads but instead ‘searches for stocks selling for less than their intrinsic value’ and after purchasing, waits for market recognition that corrects this discrepancy. Athanassakos (2011b) has illustrated that a search for undervalued stocks is the initial process undertaken. He maintains that these stocks tend to be ‘avoided by large institutional investors’ and are not the ‘glamour stocks everyone wants to own’. Graham (1973, p. 211) describes two methods of searching for fundamentally undervalued stocks; companies selling at a low price to...
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...Executive Summary As a group we plan on using a range of valuations to analysis the food and drinks industry to assist Mr. Richie Rich for considering an investment. We will draw up a short description on the industry as an overall and also provide a background summary on each of the company’s chosen. The valuation methods we will use will be; Cash Flow valuation, Dividend valuation, Price Earnings valuation, Stock Market valuation and Net Asset valuation using these we will draw up a conclusion and provide our recommendation on which company/ companies Mr Richie Rich should invest in. One point to note when investing is that we should have realistic expectations. There's nothing wrong with hoping for the 'best' from your investments, but you could be heading for trouble if your financial goals are based on unrealistic assumptions. Allocation Luke McDonagh X00113375 Kerry Group & Aryzta Clayton Stafford X00111060 Glanbia & Fyffes Background Kerry Group This brief history traces the evolution and growth of Kerry Group from its modest beginnings in the south west of Ireland some 40 years ago into a successful, publicly traded, multinational corporation and leading player in the global food industry. Having commenced operation from a green field site in Listowel, Co. Kerry in 1972, the Kerry organisation has realised sustained profitable growth with current annualised sales of approximately €5.8 billion. With operations established in 26 countries across five continents...
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...Statement Analysis Session #1: Fundamental Analysis and Valuation March 2015 In-Mu Haw (许 仁茂) 1 Create value through acquisition to build brands (over 100) 2 Lenovo vs. HP Stock Price Lenovo created value through acquisitions Poor acquisition (overpaid: $8.8B) $18 million in 2013 3 Deloitte Report Chet Wood, Managing Partner of Deloitte LLP, Merger & Acquisition Services: • • About 70 percent of all health plan M&As fail to create meaningful shareholder value. CFOs and management can take a stronger role in M&A deal evaluation, especially on revenue growth. 4 Use of Financial Statements for Valuation “I am considering to buy a small packing company. They offered me RMB 15 million and gave me their last 2 years’ Income Statements and Balance Sheets. I think it’s overpriced. How much do you think I should pay?” How will you use I/S and B/S to assess the target firm’s fair value? 5 Warren Buffet Emphasized importance of looking at a firm’s Competitive advantage of products Long-term growth potential… for good investment 6 Sound Fundamental Analysis One does not buy a stock, one buys a business. When buying a business, know the business. Good firms can be bad buys (if overpriced). Price is what you pay, value is what you get. Value of firm = Value of Debt + Value of Equity TA = L + SE (BV) on B/S 7 TA – L = SE SE (BV) vs. Market value of equity 8 Stock Price What is intrinsic value? Is the price overvalued? P/E=41: What earnings growth rate investors...
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...Gmo: the Value Versus Growth Dilemma GMO: The Value Versus Growth Dilemma | 1. What is value investing? What is its rationale? What are GMO’s main arguments in favor of value investing? Value investing is a way of investing in company stocks that are considered either undervalued or out-of-favor by the market. In other word, a value investment is one where the intrinsic value of the stock is not accurately reflected in the current market valuation. The underlying reason of too much decreasing in the stock price is that the company may be losing market shares or even in trouble due to market’s panic attributed to negative rumors as well as having management problems. Since the market price has dramatically descended, the book to market ratio of that stock will conversely increase. Consequently, this fraction is an important indicator that value investors will look at in order to justify if a particular stock is value stock or not. The rationale for investing in such value stock is that after the forces that are depressing the stock have diminished, the market price of value stock can only go upward from the bottom position to realize the stock’s hidden potential value at some point in the future. Notably, the key assumption is that once the market finally acknowledges the inefficiency that the price is too low when compared to the expected future returns, it will bump up the price and the value investors will directly benefit from the capital gain on those value stocks. Basing...
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...Gmo: the Value Versus Growth Dilemma Ferret out – reveal Laggard Overlook-ignore GMO: The Value Versus Growth Dilemma | 1. What is value investing? What is its rationale? What are GMO’s main arguments in favor of value investing? Value investing is a way of investing in company stocks that are considered either undervalued or out-of-favor by the market. In other word, a value investment is one where the intrinsic value of the stock is not accurately reflected in the current market valuation. The underlying reason of too much decreasing in the stock price is that the company may be losing market shares or even in trouble due to market’s panic attributed to negative rumors as well as having management problems. Since the market price has dramatically descended, the book to market ratio of that stock will conversely increase. Consequently, this fraction is an important indicator that value investors will look at in order to justify if a particular stock is value stock or not. The rationale for investing in such value stock is that after the forces that are depressing the stock have diminished, the market price of value stock can only go upward from the bottom position to realize the stock’s hidden potential value at some point in the future. Notably, the key assumption is that once the market finally acknowledges the inefficiency that the price is too low when compared to the expected future returns, it will bump up the price and the value investors will directly benefit...
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...to enable the investors for making well informed and conscious investment decisions. Actually, Investing is the act of committing money or capital to an endeavour with the expectation of obtaining an additional income or profit. True investing doesn't happen without some action on our part. A "real" investor does not simply throw his or her money at any random investment; he or she performs thorough analysis and commits capital only when there is a reasonable expectation of profit. Yes, there still is risk, and there are no guarantees, but investing is more than simply hoping Lady Luck is on our side. It is much the same with investing in equities but most of the Saudi investors ignored this basic principle of investment. This is evident from the volatility of the Saudi stock market during the past 12 months which witnessed high speculation, lack of direction, and overall confusion that led to the rise and fall of the Saudi stock market index (TASI) beyond justifiable levels. The aim of investing in equity is to get a healthy return by holding the stock for a longer duration. The return on a stock (dividends and price appreciation over the holding period) is tied to the future performance of the company. Further, an investor should know why he is buying or selling a particular stock and the timing of his buy- and- sell decisions. In other words, investors who are directly investing in the stock market should have the knowledge and skills of stock valuation that is whether a...
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...founded out that investment funds that aggressively push for change at companies substantially outperform stock market indices. • Dave Ramsey suggests that if you've been saving money, trying to get out of debt, investing in mutual funds. • Dave Ramsey urges investors to hold 4 mutual funds in their one Growth fund, one Growth & Income fund, one Aggressive Growth fund and one International fund. • Fidelity.com has given 3 tips for the investors suggesting ways to invest in Aggressive Funds. People who are young for Example in their 20’s and 30’s can invest in Aggressive Funds. This is because they can handle any loss if made because they will be earning in their entire life ahead. People who are in 50’s wont be willing to take much risk as they will be looking for security at the end of their working years and are looking for retirement. Young people are dynamic, enthusiastic and willing to take funds. The second tip it gives is that invest more when you are earning as the benefits will be compounding. The third tip it gives is that you need to make a strategy while investing. Take help from the rating firms to know about the rating of the stocks and their growth and the return and risk involved. • Upgrader funds.com (2011) has given 6 advises for investing in aggressive funds after a detailed research on them. They are as follows: 1. It suggests that we need to set aside a Portion of our Portfolio. They suggested carving out just a portion of your portfolio for...
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...Rabin, Todd & McGrath) under the direction of Kenneth P. Morse and Matthew Utterback of the MIT Sloan School and Howard Stevenson and Michael Roberts, of the Harvard Business School. �2000 MIT Entrepreneurship Center Executive Summary Angel investors are an important and growing source of financing for the start-up and initial growth phases of technology ventures. This study focused on high net worth angel investors with entrepreneurial backgrounds. Many of these angels invest in first time entrepreneurs before the entrepreneurs secure venture capital financing. Besides earning a strong return on their investment, these experienced angels are motivated to “give back” to the community which helped make them successful. Very little published data is available on angel investing and little research has been done on the experienced angel investor. It may be valuable for first time entrepreneurs, venture capitalists, regulators and other members of the venture community to understand, leverage and support this growing class of experienced angel investors. This study introduces and defines the experienced angel investor, outlines the angel investing process, discusses the rise of organized angel groups, and provides advice for high net worth individuals aspiring to become angel investors. The intended...
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...Investment Style Passive Vehicle Style of investment Active Vehicle Investment Style Horizon (Long term Investment ) Life-cycle (often used in retirement plans) Asset Allocation Equities Growth Fixed Income Investments Capital Preservation Asset Allocation Asset-allocation is an attempt to provide investors with portfolio structures that address an investor's age, risk appetite and investment objectives with an appropriate apportionment of asset classes. Balance Fund Life-cycle (often used in retirement plans) Active Asset Selection Active asset selection strategies can be classified fairly broadly into four classes – Intrinsic valuation model relative valuation model technical analysis models Portfolio Optimization model How to Rebalance Your Portfolio Businesses are constantly assembling and adjusting their portfolios of assets in an attempt to increase the returns they earn and reduce the risks they face. For example, a grocery chain opens new locations while closing or selling underperforming stores Record Compare Adjust Conclusion Rebalancing your portfolio will help you maintain your original asset allocation strategy or implement any changes you make to your investing style. Essentially, rebalancing will help you stick to your investing plan regardless of what the market does. Asset...
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...STATEMENT ANALYSIS J P MORGAN CHASE Vs. CITIGROUP TO : PROF FRANK OWARISH BY : RAYAN SEQUEIRA ZHOUXIA WANG HOMAR WRIGHT DARA SIU WAN HO TABLE OF CONTENTS EXECUTIVE SUMMARY 3 INDUSTRY BACKGROUND 4 COMPANY PROFILE 6 RATIO ANALYSIS 8 ANALYSIS OF OPERATING ACTIVITIES 9 ANALYSIS OF INVESTING ACTIVITIES 11 ANALYSIS OF FINANCING ACTIVITIES 13 COMMON SIZE ANALYSIS 19 DEBT AND EQUITY FINANCING 20 INDUSTRY STANDARDS 22 FUTURE PROSPECTS 23 CONCLUSION 26 REFERENCES 27 APPENDIX 28 Page 2 of 33 EXECUTIVE SUMMARY The financial statement analysis of JP Morgan Chase and Citigroup has been conducted and compared with each other to understand how one is performing in relation to the other. Further, the two companies are also compared against the industry standards to know their positions. Since the two companies operate in the banking industry, they have similar components in their financial statements, which facilitate better comparison of their financial health. For the purposes of the analysis, we have considered the cash flow statements, balance sheet, income statement and the notes to the 10K. Further, the ratio analysis has also been conducted to assess its financial efficiency. JP Morgan Chase used in approximately $3.752 billion cash in its operating activities while the Citigroup provided for $35.686 billion cash for its operating activities. In terms of the investing activities...
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