You can find upto ten years worth of financial statement information on FDX Corporation (FDX, traded on the NYSE) (FDX is a global transportation and logistics enterprise, which owns FedEx, RPS and other companies) by going to the Disclosure Database, which can be accessed from the Library's homepage. (You're better off trying this from a Pace University site. If you do this from an off-Pace site, you have to follow the instructions given on the Library site for remote access.) You can find a lot of other information at this site as well. The financial statement information, alone, can also be downloaded from my website. In addition, if you choose to, you can obtain any additional information you wish, either from the Web or from the company itself. Use all available information to value the company as of November 15, 1999 and predict the price of the stock on November 15, 2000. A useful source of information is the company's annual statement (for US companies, this can be obtained, either by writing to the company, from a library, or from the SEC Database), and in trade publications and other news outlets. Also check out Yahoo's Transium service. Provide a three page (double-spaced) analysis of the stock's prospects, taking into account such aspects as the position of the firm in the industry, the firm's debt-equity ratio, the exposure of the firm to international events, the firm's management, the exposure of the firm to new legislation (adverse and otherwise), the current stock price, and any other factors that you think are relevant. If you use data from the web, cite the appropriate URLs.
Any conclusions that you draw must be supported by evidence that is clearly specified. I may ask you for copies of any materials that are used in the preparation of the report. If you use Web materials, provide me with the URLs. The stock evaluation report will be evaluated on two counts: one, and less importantly, the accuracy of the short term forecast; two, and more importantly, the soundness of the arguments made. The accuracy of the forecast is ultimately less important because there is a lot of uncertainty in predicting stock returns--a lot of difficult-to-predict factors impinge upon the final result; it is very difficult to judge based on the accuracy of a single forecast whether the methodology will work consistently or not; that is why the quality of the arguments count more.
The report should have the following format:
Whatever methodology you use, you must also include a spreadsheet analysis, based on one of the three approaches discussed in Chapter 23 of Damodaran's book. Also see my webnotes on Equity Valuation. Templates for these approaches can be found at Damodaran's website. Justify the numbers that you input into the spreadsheet. Your analysis loses credibility without justification.
Please name the different areas of your spreadsheet for easy location. Information on how to name areas of your spreadsheet can be found at my website. All project analyses must be done using EXCEL, or converted to EXCEL format. The report should be presented as a Microsoft Word document, with the EXCEL file embedded and must be emailed to me as an attachment. Name your Word file pveqval.doc. Alternatively, you can turn in the project as a Microsoft Excel document, with the report included directly, or embedded, in a separate worksheet.
Examples of stock valuation reports from previous terms can be viewed at the FIN652 website. However, you should consider these simply as examples, not as ideal reports.
Go
to the FIN 320 Home Page
Go
to the FIN 652 Home Page
Go to Prof. P.V.
Viswanath's Home Page