Peter Lynch, a famous American investor, is famous for his investment principle "Invest in what you know".' Lynch uses this principle as a starting point for investors. He recommends individual investors to find good investments in their day-to-day lives. Lynch has outlined many of the investments he found not in his office, but when he was out with his family, driving around or making a purchase at the mall. Lynch believes individual investors are able to do this, too.

Two examples of Mr. Lynch's successful investments are:

Lynch invested in Hanes after his wife expressed satisfaction with their pantyhose. When a competitor introduced a competing brand of pantyhose, Lynch bought samples of each and brought them to the Fidelity office for his colleagues to judge. When Hanes' pantyhose was determined to be of higher quality (for a similar price), Lynch's investment thesis was confirmed.

Lynch invested in Flying Tiger and viewed air freight as the transportation of the future. He profited tremendously when the Vietnam War began and the company began transporting troops and supplies to overseas.

In this report, I want you to make a stock recommendation to the class. It should be stock (of a publicly traded firm) which you happen to know well from your work, your family, or other daily activities. You should include the following analyses to support your recommendation in a clearly written report (with no more than 2 pages): 1. Describe the business operation/model of your recommend firm and how you come across this firm in your day-to-day lives. Provide any knowledge and information you have for this firm, and why you pick the firm to recommend. 2. Investment is a research-intensive endeavor --see Mr. Lynch' quote on stock investment: "The person that turns over the most rocks wins the game. And that's always been my philosophy. a. Find three comparable (peer) firms from the same industry of your recommended firm. b. Go to Yahoo Finance (https://finance.yahoo.com) and enter the name(s) of your recommended firm and its comparable firms in the search box. From the main page for the firm, gather the following information, and tabulate the following numbers in your report The current stock price. The earnings per share (EPS)? The P/E (price-to-earnings ratio/multiple) c. You are going to estimate the value of your recommended stock by using "comparables" approach. This approach is similar to the valuation approach we see in the real estate market. If your neighbor's home just sold for $300,000 ($100 per square foot) and it has similar size, number of bedrooms/bathrooms, and amenity to your home. Your house, being a bit larger with 3500 square feet, is probably worth $100 x 3500 = $ 350,000. In the stock market, we are going to assume that comparable firms will have similar multiples. We are going to use the most common multiple, the price-to-earnings (P/E) multiple (or P/E ratio), and calculate an estimate of the company's stock value using the following formula, Estimated Stock Value (recommended firm) EPS (recommended firm) x average P/E ratio of three comparaple firms 3. Compare your estimated stock value to the actual stock price. What recommendations can you make as to whether your friends should buy or sell the stock based on your value estimate. If you would like to provide value estimates based on other models, please explain the calculation process clearly. In this report, I want you to make a stock recommendation to the class. It should be stock (of a publicly traded firm) which you happen to know well from your work, your family, or other daily activities. You should include the following analyses to support your recommendation in a clearly written report (with no more than 2 pages): 1. Describe the business operation/model of your recommend firm and how you come across this firm in your day-to-day lives. Provide any knowledge and information you have for this firm, and why you pick the firm to recommend. 2. Investment is a research-intensive endeavor --see Mr. Lynch' quote on stock investment: "The person that turns over the most rocks wins the game. And that's always been my philosophy. a. Find three comparable (peer) firms from the same industry of your recommended firm. b. Go to Yahoo Finance (https://finance.yahoo.com) and enter the name(s) of your recommended firm and its comparable firms in the search box. From the main page for the firm, gather the following information, and tabulate the following numbers in your report The current stock price. The earnings per share (EPS)? The P/E (price-to-earnings ratio/multiple) c. You are going to estimate the value of your recommended stock by using "comparables" approach. This approach is similar to the valuation approach we see in the real estate market. If your neighbor's home just sold for $300,000 ($100 per square foot) and it has similar size, number of bedrooms/bathrooms, and amenity to your home. Your house, being a bit larger with 3500 square feet, is probably worth $100 x 3500 = $ 350,000. In the stock market, we are going to assume that comparable firms will have similar multiples. We are going to use the most common multiple, the price-to-earnings (P/E) multiple (or P/E ratio), and calculate an estimate of the company's stock value using the following formula, Estimated Stock Value (recommended firm) EPS (recommended firm) x average P/E ratio of three comparaple firms 3. Compare your estimated stock value to the actual stock price. What recommendations can you make as to whether your friends should buy or sell the stock based on your value estimate. If you would like to provide value estimates based on other models, please explain the calculation process clearly