stock track

Stock Track Simulation:

Trades Execution Details:

Six stock were bought during the trading periods investing the 100% of the portfolio value of USD 10 mn. The portfolio was liquidated on 8th April 2021 by selling all the stocks.

Portfolio position at Liquidation:

The portfolio yielded a return of 3.52% underperforming SPY ETF by 2.3%. However, since the portfolio was largely in tech stock, the relevant benchmark is the Nasdaq ETF, which the portfolio outperformed as depicted in the graph below. In Absolute terms, the portfolio generated USD 351,530 over the invested period.

Portfolio performance Vs Nesdaq ETF

10%

18%

20% 23%

15%

14%

Stock Proportion(%)

1 2 3 4 5 6

Rational for buying:

During the trading period the portfolio comprise six stocks namely Tesla, Facebook, FedEx,

Amazon, EBay and Walmart. Below are the rational of making these stock part of the portfolio.

1) Tesla

Tesla in one of pioneer in the electric vehicle industry. As people around the globe are shifting

sustainable energy solutions, they find electric cars as eco friend solution to travel. Tesla’s sales

have witnessed a strong growth in the 1Q2021 with units sold coming in at 184,000 units, up by

109% YoY. The market is expecting tesla to deliver 900,000 units in 2021. Apart from the short

term, Tesla’s vision is to enhance is production capacity to 20 mn vehicle per annum over the

course of the next decade. Tesla is building its manufacturing facility near berlin which is expected

to come online in 1H2021. Moreover, the company has bought 2000 acres of land to develop its

manufacturing facility near Austin which would be Tesla’s largest. The company has reported and

EPS of 85 cent for 1Q2021. The stock was bought at USD 686 per share and sold at USD 727 per

share resulting in a return of 5.9% over the trading period. 

2) Facebook

Facebook is one of the largest social median platforms with 2.8 bn active user, around one third of

the world population. Moreover, among the top social media platform, Facebook owns WhatsApp

and Instagram. Facebook has increasingly been utilized as a marketing and business platform

during the pandemic since the markets are close to minimize the physical contact of people and

curb the spread of the virus. During 2020, Facebook ad revenue witnessed an increase of 31% on

YoY basis triggering an EPS increase of 52% yoy to USD 3.88 per share. Going forward, Facebook

is expanding into the market of VR headset which could be a game changer for the company. The

stock was bought at USD 311 per share and was sold at USD 307 per share resulting into a loss.

3) FedEx

FedEx in one of largest logistical companies in the world. With the rollout COVID19 vaccine,

there will be need to transport them at certain temperature quickly around the globe leading to

increase in demand of logistical service. Moreover, due to logistical crises around the globe, the

freight charges are on rise which could improve FedEx margins. Lastly, the company is expected

to collaborate with Walmart to launch something similar to amazon prime. The stock was bought

at USD 281.5 per share and was sold at USD 287.3 per share resulting into a return of 2%.

4) Amazon

Amazon is the largest online retailer in the world total sales of USD 125.5bn in 2020. During the

pandemic, amazon sales increase by more than 50%. The company plans to enter into health care

business with the launch of amazon care that would provide health care services. More than 75%

of the amazon’s revenue is recurring and with the entry into healthcare business, the company’s

profitability has the potential to grow exponentially. The stock was bought at USD 3306 per share

and sold at USD 3380 per share resulting into return of 2.5%.

5) Walmart

Walmart in one of the largest global chain of departmental store with sales of USD 519 bn. The

company has plans to collaborate with FedEx to launch its online platform for its product. The

company is trading at depressed valuation due pandemic as most of the outlet are close or operating

at suboptimal capacity. With rollout of vaccine, the pandemic will soon be over and on site

shopping will start at a pre-covid rate. The stock was at USD 128 per share and was sold at USD

140 per share resulting into a return of 9%.

6) eBay:

EBay was one of the renowned e-commerce platform, however it lagged behind due to tough

competition in the e-commerce industry. With spread of covid-19, physical shopping has nearly

come to a halt providing opportunity to catch up with it competition which could unlock the

potential value in the stock. The stock was bought at USD 62.15 per share and was sold at USD

64.35 resulting into a return of 4%.