a stock, considering a specific stock from the list of 2. Return on equity at International Business Machines has risen to 68% this year from 24% in 2005 after the Armonk, New York-based company sold its personal computer business and reorganized stall. Net Income per employee rose to $34,758 in 2010, the highest since at least 1987, according to data compiled by Bloomberg. The stock up 108% since the end of 2005, trades 16% below its average price carnings ratio during the past decade. IBMs example mirrors the Standard & Poors 500 Index, where return on equity has risen six quarters to 23% and may reach 27% next year, the highest annual level since 2000, analyst estimates compiled by Bloomberg show. We've had a phenomenal recovery in corporate profits and productivity on a very subpar economic recovery, said Nick Sargen, chief investment officer at Fort Washington Investment Advisors in Cincinnati, which oversees more than $36 billion. If you agree that's sustainable, then you're willing to pay more for those companies future carnings than the guy who thinks this is just temporary. There is more legs to the rally. When return on equity rose close to its level now in the first quarters of 2003 and 2009, the camnings multiple for the S&P 500 increased 11% and 60%, respectively, in the next six months, data compiled by Bloomberg show. The Indicator shows how much profit investment in workers, plants, technology and raw materials yield, making it a benchmark measure for corporate strategies. Goldman Sachs Groups The S&P 500 reached the highest level since June 2008 last week, gaining 2% to 1,363.61 and bringing the rally that began in March 2009 to 102%. Profits at companies from 3M Co to United Parcel Service topped analysts estimates. Earnings have beston forecasts at 77% of 299 index companies that have reported results since April 11, according to data compiled by Bloomberg. While the S&P 500 must rise 15% to reach its all-time high of 1.565.15 from 2007 Bloomberg i What is the key observation that can be made from above news item about US markets? ii. What is likely implications of above facts on the US economy? Justify your answer ill. As an investment strategist, what would be your advise to the investors? Justify (4-3-3) a stock, considering a specific stock from the list of 2. Return on equity at International Business Machines has risen to 68% this year from 24% in 2005 after the Armonk, New York-based company sold its personal computer business and reorganized stall. Net Income per employee rose to $34,758 in 2010, the highest since at least 1987, according to data compiled by Bloomberg. The stock up 108% since the end of 2005, trades 16% below its average price carnings ratio during the past decade. IBMs example mirrors the Standard & Poors 500 Index, where return on equity has risen six quarters to 23% and may reach 27% next year, the highest annual level since 2000, analyst estimates compiled by Bloomberg show. We've had a phenomenal recovery in corporate profits and productivity on a very subpar economic recovery, said Nick Sargen, chief investment officer at Fort Washington Investment Advisors in Cincinnati, which oversees more than $36 billion. If you agree that's sustainable, then you're willing to pay more for those companies future carnings than the guy who thinks this is just temporary. There is more legs to the rally. When return on equity rose close to its level now in the first quarters of 2003 and 2009, the camnings multiple for the S&P 500 increased 11% and 60%, respectively, in the next six months, data compiled by Bloomberg show. The Indicator shows how much profit investment in workers, plants, technology and raw materials yield, making it a benchmark measure for corporate strategies. Goldman Sachs Groups The S&P 500 reached the highest level since June 2008 last week, gaining 2% to 1,363.61 and bringing the rally that began in March 2009 to 102%. Profits at companies from 3M Co to United Parcel Service topped analysts estimates. Earnings have beston forecasts at 77% of 299 index companies that have reported results since April 11, according to data compiled by Bloomberg. While the S&P 500 must rise 15% to reach its all-time high of 1.565.15 from 2007 Bloomberg i What is the key observation that can be made from above news item about US markets? ii. What is likely implications of above facts on the US economy? Justify your answer ill. As an investment strategist, what would be your advise to the investors? Justify (4-3-3)
