Financial Investment

Financial Investment

Name of Student

Institution of Affiliation

Introduction

Stock market is a complex system where shares are traded publicly and are bought or sold by various companies existing in the market. It involves the exercise where people involve themselves in gambling with desire to invest in the company presented in the stock exchange market. In most cases it becomes rare to lose the shares which are invested in the company unless the individual company experiences a bust which is a rare occurrence in most trading activities (Chatterjee, 2010).

Usually stock market is a collection of million investors with opposing views and opinion regarding selling of securities which are presented for trading and attracting investors. Since both investors involved cannot have correct information of the company the investment system tends to in adversarial approach. To some extent some investors will suffer loss while other experience maximum profit from the type of investment they are involved into (Chatterjee, 2010).

To investors it wise to realize that there are many factors which determines whether the prices of the stock goes up or experiences drastic fall within unexpected period. Major factors which contributes to the changing of prices may include social unrest, increased risks in the market, changing of demand and supply in the market with more reference to changing political environment in the most countries. It is very hard to predict the changing trends in the stock market since none of the investor can understand the factors that may trigger selloff or the time it will exactly occur (Thomsett, 2015).

In real life situation it becomes very crucial to understand the type of the company as an investor you are intending to investment your money. The most importantly, is to understand how the market has been operating about the company of the choice. The aim is to determine whether the company has been making major profits or operating on losses. Companies operating on profit will be more desirable as there will be reduced risks that one may tend to suffer in case the company suffers a bust in near future. Apparently, understanding the period of the company in stock market exchange is crucial to relate the history of operations and determination of investment risks.

Stock Purchase

In these cases, we will tend to prefer investing in telecommunication industry since the firms that make the industry have recorded crucial and strong investment opportunities for the last decades. AT & T Company is the best in the industry since it pays forward dividend yields of 5.2% and the dividends of the company experience a rise in each of the given years. Over 90% of the total earning of the company and 65% of its free cash flow are paid to the investor. Therefore, the company has a promising future to any investor who may be interested in stock market exchange (Thomsett, 2015).

With allotment of $ 20,000 invested in stock exchange the following will be the yield at the end of one year.

Net income per share = net income/Outstanding shares of the company

NB: multiply the amount by the company’s typical payout ratio, converted to decimal

Dividends = Net income per share * payout ratio of the company.

Company analysis

Samsung Company

Samsung is a major electronic company in the world which commenced their business in 1969 as a low-cost manufacturer of black and white television. Throughout the entire period the company has acquired semiconductor business which would be considered as a major milestone that initiated modern production of electronic products in the world. The company has demonstrated the ability to control large market share edging out their main competitors after the transition into major player in the electronic products and home appliances that are widely available in the market. According to stock exchange analysis it’s recording the highest number of individuals willing to invest in their stock due to increased yields on dividends and constant paying to shareholders (Duguid, 2017).

Despite, recording a negative profit in 1997, the executive of the company has resulted in the effort of restructuring the entire company to some extent retrenchment was conducted to reduce its debt suffered over the last five years according to reported provided by business analysts and economists of the world (Piard, 2014).

AT & T Company

The desire of investing in the company after through research and consideration is that the AT & T Company has paid dividend to its investors continuously since the company featured in stock market exchange. For over 30 years the company dividends have increased significantly thus qualifying to be the champion in giving dividends to their investors. The price of the share is estimated to be $ 33.16 with comprehensive dividend yield of 6.0%. The current dividend is $ 2.00. According to the information regarding financial operation cash flow is estimated to over $6.29 (Duguid, 2017).

The company was established in the late 1879 by Alexander Graham Bell the person who invented the first telephone. Throughout the year the company has been considered to primary phone company in America thus maintaining the monopoly of the services offered by institution. In the recent past the company decided to focus on telephone business as a communication carrier after it sold its subsidiary to the broadcasting company of America. Other services the company deals with ensuring radio transmission connections are provided across the country (Duguid, 2017).

Royal Dutch Shell

Royal Dutch company is well known global gas production firm in the globe which estimates production of over 10 billion cubic natural gas. Over the past decades the company has been able to spread across the globe thus attracting more investors to invest in their stock market exchange. Moreover, their stocks are considered to attract more investors due to their increased dividends which has increased constantly over the last ten years. However, the stock rate of the company currently, is at $ 69.05 which is a reduction of -0.85 in the stock exchange. The major competitors of the company include the china national petroleum corporation which is producing more cubic meters of natural gas thus attracting the major investors in the world. In the recent past the company has considered venturing into solar sector after the completion of the acquisition of major solar company that is currently based in America. These come after series of innovation and consideration to extend their service beyond its core oil and gas business (Chatterjee, 2010).

Personal Response

What did you learn about the investing process? Investing in the stock exchange will involve a game of chance where an individual can incur losses or make profits. The direction will depend on the changing market trends and other factors affecting prices of the stock (Thomsett, 2015).

How do you feel about investing in stocks? The entire process remains exciting especially if an individual remains patient to yield the best result from the market. Moreover, thorough analysis on the function of the company will be useful to determine whether the company is making losses or profit during the entire period of operation (Chatterjee, 2010).

Will you be a future investor? Please explain why you answer yes or no. Yes. This because if offers business opportunity where an individual can be able to make extra income from dividends given.

What are your suggestions for improving this project/assignment? To improve the entire exercise of the project it would be necessary to conduct field experience and study. By doing so, learners will be able to understand mechanisms used in stock market exchange (Piard, 2014).

Form A

Commission should be calculated as follows:

-Less than 100 shares: 1.5% of amount of investment

-100 or more shares: 1% of amount of investment

(These commission rates assume that you are using a discount broker)

STOCK PURCHASED – March 22, 2018

Company Date Price per share # Shares purchased Amount of investment Commission paid to buy Total Cost to purchase
CHUX 10/05/11 $8.07 200 $1614.00 $16.14 $1630.14
1. 11/05/11 $8.00 200 $1600 $16.00 $1600.00
2. 12/05/11 $7.99 200 $1598 $16.18 $1598
3. 24/06/11 $8.07 200 $1614.00 $16.14 $1630.14
4. 13/05/11 $8.00 100 $800 $800
5. 12/05 $8.07 200 $16.14 $16.14 $1630.14

Total Spent: __________________$7288.28_____________

STOCK SOLD (Sell all by close of day on April 26, 2018)

Company Date Price per share # Shares sold Amount received Commission paid to sell Net received Total Gainor (Loss)
CHUX 11/09/11 $8.45 200 $1690.00 $16.90 $1673.10 $42.96
1. 12/09/11 $7.45 200 $1490 $16.90 $1473.10 $16.90
2. 13/09/11 $8.00 200 $1600 $16.90 $16.90 $16.90
3. 14/09/11 $8.45 200 $1690.00 $16.90 $1673.10 $42.96
4. 16/09/11 $7.45 200 $1600 16.90 $1473.10 $16.90
5.   $8.00 200 $1600 $16.90 $16.90 $16.90

Total profit or loss: _net profit $153.58_________________________

Form C

[You may need to add rows to get all your information in. The easiest way to add rows in Microsoft Word is to right click the mouse in one of the cells near where you want to add a row and then select “Insert Insert Rows (Above or Below)]

Company: O’Charleys Inc. (CHUX)

Period Ending Date:10July 2011

Current ASSETS Total ASSETS Current LIABILITIES Total LIABILITIES
$62,473 $422,741 $76,456 $244,507

Reference(s) where you obtained the above information: http://finance.yahoo.com/q/bs?s=CHUX

Company:

Period Ending Date:

Current ASSETS Total ASSETS Current LIABILITIES Total LIABILITIES
$52,000 $145,000 $128,000 $122,000

Reference(s) where you obtained the above information:

Company:

Period Ending Date:

Current ASSETS Total ASSETS Current LIABILITIES Total LIABILITIES
$62,473 $422,741 $76,456 $244,507

Reference(s) where you obtained the above information:

Company:

Period Ending Date:

Current ASSETS Total ASSETS Current LIABILITIES Total LIABILITIES
$45,000 $244,000 $120,456 $45,000

Reference(s) where you obtained the above information:

Company:

Period Ending Date:

Current ASSETS Total ASSETS Current LIABILITIES Total LIABILITIES
$62,473 $422,741 $76,456 $244,507

Reference(s) where you obtained the above information:

Company:

Period Ending Date:

Current ASSETS Total ASSETS Current LIABILITIES Total LIABILITIES
$75,000 $552,000 $79,000 $80,000

Reference(s) where you obtained the above information:

References

Chatterjee, S. (2010). RFID: Scope, viability and company analysis. Place of publication not identified: Mind Commerce Publishing, LLC.

Duguid, C. (2017). The stock exchanges.

Piard, F. (2014). The lazy fundamental analyst: Applying quantitative techniques to fundamental stock analysis.

Thomsett, M. C. (2015). Getting started in stock analysis.