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FIN 470 Milestone Three Guidelines and Rubric

Overview

Submit an outline of the analysis paper you will complete for Component 1 of the final project. The outline should include the five major sections of the paper: Executive Summary, Portfolio Analysis, Competitive Analysis, Estimated Return and Value, and Conclusions. Although some of your composition may have already been completed at this time, the task being completed is an outline. This differs from a draft, which includes the composition itself. The objective here is to provide adequate detail in bullet point format to your instructor to ensure that all of the necessary criteria have been met. Your instructor will provide feedback regarding any missing criteria.

Directions

Specifically, you must address the following rubric criteria:

1. Executive Summary. Provide a brief overview of the key findings and recommendations from your portfolio analysis and research.
2. Portfolio Analysis. Research and analyze a portfolio of at least five securities using a portfolio strategy (value, growth, etc.) and risk-tolerance level appropriate to the needs and return requirements of your client. For each security in the portfolio, provide a financial analysis covering the associated risk, return, and tax implications. In addition, provide a clear assessment of the strengths, weaknesses, opportunities, and threats of any companies whose stock is included in the portfolio. Assess the alpha, beta, and intrinsic value for each equity security and for the portfolio as a whole based on your analysis. Use the capital asset pricing model (CAPM) to develop the return for each equity security. Provide a well-supported rationale for why each security is included and how it aligns with client objectives, including an assessment of any preferential factors the client might be concerned about such as market share, innovation, and sustainability practices.
3. Competitive Analysis. Research at least one publicly traded, U.S.-based global company in more depth, comparing its performance and value with a close competitor. (If your portfolio includes more than one company that meets these specifications, select the one you think would be of most interest to the client.) The goal is to analyze investment alternatives with a focus on better serving the client. The competitive analysis must include, but is not limited to, the criteria described below.
   1. Compare key ratios of financial performance and health at the selected company and its peer competitor. Consider, at a minimum, the following measures:
      1. Profitability, including return on equity (ROE) and net profit margin
      1. Liquidity, including the current ratio
      1. Debt management, including the debt-to-equity ratio
      1. Market, including earnings per share and price earnings ratio
   1. Analyze what the key ratios for the two companies suggest about their respective organizational goals and objectives both now and in the future.
   1. Compare newsworthy events (such as salient industry or economic events, policy or political changes, and natural disasters) that have affected (or may affect) one or both companies. Discuss how the events affected (or are likely to affect) strategic goals and financial planning within the two organizations and how that, in turn, may affect investor returns.
   1. Evaluate the alpha and beta for each company’s stock.
   1. Assess the merit of the selected company as an investment in the global context as compared to the peer company selected. In other words, which company is a better investment for the client? Why?
4. Estimated Return and Value. Estimate the rate of return for the portfolio as a whole and perform a multi-period net present value analysis based on the client’s investment time horizon. Discuss the expected rate of inflation.
5. Conclusions. Specify any takeaway message for the client based on your research and the securities’ observed performance. Do you stand by your initial selections? Why, or why not? Be transparent about any assumptions you have made, how confident you are in those assumptions, how changes in those assumptions might affect portfolio performance, as well as when it might be appropriate to review the portfolio again to make any necessary adjustments.

What to Submit

Your assignment must be submitted as a 3- to 5-page Microsoft Word document with double spacing, 12-point Times New Roman font, and one-inch margins. Any sources should be cited according to APA style. Your supporting research should be as up to date as possible. Any news stories, press releases, or additional sources must be dated within the last 60 days. Company data should be no more than one year old. Using older data may result in being asked to resubmit your work.

Milestone Three Rubric

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