Investment Risk Management-
Signature Assignment: Financial Investments
Evaluate the relative investment attractiveness of two optional common stock investments. Choose a pair of companies from the list below to undertake an analysis of why you would invest in the common stock of one company over the other.
Selected: American Airlines (formerly US Airways) vs. United Airways
Provide an Assessment of a Potential Financial Investment
Consider the following scenario: A prospective client has come to you for advice on the next financial move he or she should make to more thoroughly diversify his or her portfolio. The potential client has given you the names (see above) of two companies being considered for investment. You will prepare a PowerPoint presentation for the client with detailed information and recommendations.
Your analysis must begin with a financial ratio presentation and assessment of the two companies. Describe what each of the ratios mean. The ratios should include ROE and decomposition, Turnover and other asset utilization ratios, Liquidity Ratios, and Market Price Ratios. Moreover, the decomposition analysis of ROE should extend to the connection with the common-size income statements.
Moreover, your evaluation must make use of at least one common valuation model – ie discounted dividend or discounted free cash flow. Retrieve all your company financial information from sources such as EDGAR or other online sources listed in the textbook. Use both quantitative and qualitative analysis. In your assignment submission, show all your inputs and outputs to your models to justify your investment selection.
Your analysis should be a relative analysis in which your strongest finding would be for one of the companies to have relatively stronger fundamentals (ie financial ratios), while also having relatively low pricing (i.e. PE ratio). More likely you will find the relative attractiveness of one verse and the other to be less well-defined; and in this case it will be especially important to think through the various metrics and form a conclusion that best fits the resulting metrics.
Incorporate appropriate animations, transitions, and graphics as well as “speaker notes” for each slide. The speaker notes may be comprised of brief paragraphs or bulleted lists.
Support your presentation with at least seven (7) scholarly resources. In addition to these specified resources, other appropriate scholarly resources may be included.
Length: 15-20 slides (with a separate reference slide)
Notes Length: 200-350 words for each slide
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