Assignment Question
You are an Investment Analyst at a renowned fund management company. After close to six (6) months of joining the company, you are asked by your superior to produce a comprehensive report on a listed company (in Bursa Malaysia Stock Exchanges) of your own choice. This assignment is critically important in determining your confirmation as an employee of the company. No two (2) groups can choose the same company.
The intended audiences for your report are potential institutional investors who are existing clients of the company. As a guide, your report should comprise at least the followings:
1.Executive Summary
2.Introduction – Purpose and Objectives
3.General Company Description: Ownership structure (Shareholders), Board of Directors, and Management Team
4.Financial Ratio Analysis: Liquidity, Activity, Leverage, Profitability, and Market ratios
5.Payouts Policy
6.Competitors Analysis
7.Scenario Analysis (Good / Average / Poor)
8.Beta calculation
9.Conclusions and Recommendations
10.References
11.Appendices
Guidance:
1.Limit the executive summary to one page; in point form of between 8 and 10 points only. It summarizes the whole report for busy reader who only wants to know the salient points of your report.
2.Be specific on the purpose of your report. Provide some objectives that you think are very relevant and important. A good report will also include scope and limitations.
3.On the company’s description, a copy and paste from the latest annual report will deserve a B. Be resourceful by including major shareholder changes, director changes, or corporate moves that are pertinent to the company.
4.Perform financial ratio analysis for five (5) subsequent latest years. For any annual report of a public-listed company, there will be financial reports for the current year and the previous year. Provide comments on the trend of the ratios. Softcopy of annual reports should be submitted along with report.
5.Review the historical (last 5 years) dividend policy of the company. What type of dividend policy does the company follow? What is the trend in dividend payouts? Did the company practice any stock repurchase? What was the effect on stock price?
6.Select two major competitors from the same industry with your company and compare their financial ratios for latest financial year only. If you just provide the figures, you deserve a B. Provide your comments by comparing the ratios of your company and the competitor.
7.Perform a scenario analysis on three (3) conditions, good, average, and poor. Depending on your company, look at what would be a factor that will have the most significant impact on profitability of the company. For example, for Golden Hope Plantations Berhad, it will be the price of crude palm oil. Forecast the net profit of the company for three (3) different levels of crude palm oil. Then, calculate the prospective earnings per share and prospective price earnings ratio.
8.Calculate CAPM beta for the company and its competitors for 1000-day period. Compare risk of the company with its competitors. Provide your comments.
9.Summarize your analyses in the conclusions and provide your stock recommendations. It can be Buy, Hold, or Sell. Look at broker’s reports for guidance.
10.Provide the full list of the references uses, whether journal articles, textbooks, industry magazines, technical papers, online websites, or else. Use APA style for citations.
11.Include important articles or write-up that you quote in appendices. If you have many of them, prepare a table of appendices.