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Topic: You must write an Equity Research Report. Although there is no universal format for any equity research report, some rules and contents are widely
Topic: You must write an Equity Research Report.
Although there is no universal format for any equity research report, some rules and contents are widely used and covered. Please refer to this document produced by the CFA Institute, here. Also, there are various Equity Research Reports available on the internet. Search for them and become familiar with the most common contents.
Select a company that you like. The only restriction is that you must select a company whose stock is traded in the stock market. Then: Go to yahoo finance, use the selected companys ticker examples: the ticker for Apple is AAPL, the ticker for CocaCola is KO the ticker for Tesla is TSLA in the search engine and access to the companys profile. There, you find pages you can browse, from Summary to Sustainability The datainformation conveyed in these pages is the primary source of information for your project. Use it
These are the aspects that you must include in your report:
Executive summary at the beginning of your report. An executive summary is a brief description of what the reader is about to read once he or she goes through your report. Again, there are many places where you can find information about how to write a good executive summary. Search for it in the CFA document link provided above
The companys financial ratios. You should select the most relevant ones, and you should consider the ones that you have learned in the prerequisite course of Principles of Finance. Make sure that you present the financial ratios for the last years
and
The annual rate of return both arithmetic and continuous for the last five years, the
standard deviation and variance for those five years monthly returns and the companys Beta. Use monthly data, which means that you need to consider prices plus one because you need a base price to compute the first rate of return To estimate the Beta, you need to determine the covariance between the stock returns
and the market returns. Use the SP index prices as a proxy to measure the American stock market. If the stock that you selected is traded in a different country, make sure that you select that countrys market index returns.
You need to apply the following modelstechniques in your work:
a Capital Asset Pricing Model you need the companys beta for such
b Dividend Discount Model GordonShapiro Model
c Multiples Valuation.
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