Stock Journal

Finance 100 Stock Journal Week 3

1. Indicate the companies you are investing in Select three (3) US companies that are publicly traded. Please use your knowledge and experience and pick, as many stocks as you’d like. Lastly, make sure you are practicing proper diversification. Jim Cramer, Money Manager, on CNBC, plays a game at the end of his show called “Am I Diversified.” Check out a short clip to get a sense of industry diversification at https://www.youtube.com/watch?v=f3lDxexupcE.

I selected Cisco networking company, Whole Foods together with Walmart stores as my three public companies. The Cisco Company usually produces and sells the networking gadgets together with networking related services. However, recently it was awarded ninety million within the cast for acquisition (McMillan, 2012). The Whole Foods Company is the supermarket that deals mainly with organic foods. However, it has low margin grocery retail and little growth, but always customer service and satisfaction is its priority (Downes, & Goodman, 2003). Moreover, it had an increase of over ten percent after-tax profits in the past two years

The Walmart stores company is usually a group of retail stores globally. However, it always operates in three principal segments and also comprises of the financial services.

2. Indicate the amount you are investing in each company: Decide how you will divide $25,000 across the three (3) organizations; e.g., $10,000 in Company 1, $10,000 in Company 2, and $5,000 in Company 3. You decide the amount you are investing in each company. You do not have to provide any analysis to justify your decisions. You must only give some reason for picking that company. For example, you might invest in Ford because that group gets a lot of your money and you hear that Ford is doing well, and will continue to do well.

The value of Walmart in the last five years increased by 40 percent. However, it recently entered into Asian markets in India, which is considered among the biggest (Downes, & Goodman, 2003). The invested amount in this company is ten thousand dollars.

The Cisco Networking offers its services to network security, wireless, mobile, etc. However, it recently made acquisitions, which may result in a short-term benefit. The value of this company increased by around 20 percent in the past five years. The invested amount in this business is, therefore, five thousand dollars (McMillan, 2012).

The Walmart Company in the past five years increased its value by around one hundred plus percent. However, the amount allocated hear is ten thousand dollars.

3. Indicate the number of shares you are buying, and the price of the shares you are buying for each company: Once you decide the companies and the amount for each company, determine how many stocks you can buy. If Company 1 is selling for $42.16, then you may purchase $10,000/ $42.16, or 237.19 shares. But you cannot buy a part of a percentage, so you decide to buy either 237 or 238. In this example, you buy 237 shares, at $42.16 per share, investing $9,991.92. You won’t be able to buy exactly $10,000, or $5,000, or $25,000, but it will be relatively close.

Cisco Company:

The unit price is 28

The number of shares is 175

The amount invested is 4900

Whole Foods Company:

The unit price is 40

The number of shares is 240

The invested amount is 9600

Walmart Company:

The unit price is 74

The number of shares is 135

The amount invested is 9990

References

Downes, J. & Goodman, J. (2003). Barron's finance & investment handbook. Hauppauge, N.Y: Barron's.

McMillan, T. (2012). Cisco networking essentials. Indianapolis, Ind: John Wiley.