company analysis report

BAFI1042 - Dealing Session 1

“Fundamental & Technical Analysis”

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House Keeping Rules • You have been given access to Eikon online. Eikon contains financial news, equity

prices, portfolio management functions and a wealth of economic data.

• Eikon can be used inside and outside classroom at your convenience.

• The dealing sessions will be running during your usual lecture and tutorial in week 6, 9, 10 and 11.

NOTE: • You will be required to bring at least one personal laptop/tablet (Windows & Mac

compatible) to your dealing sessions. The sessions will contain activities requiring the use of Thomson Reuters Eikon Online (web browser) and Microsoft Excel.

• Cable power charger is needed just in case your laptop runs out of battery.

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Dealing Session Task • You are an equity portfolio manager investing within the ASX and

using Eikon online (web version). • The active portfolio is created based on the selected securities by

your group. Your initial fund to be invested is $100,000,000 AUD. • You must conduct an active style of portfolio management using

fundamental analysis and technical analysis to outperform the benchmark S&P/ASX 20.

• You need to identify yourself as a value or growth investor, a combination of both. You will also need to justify your choice

• You will be using the top-down approach • You must select 9 out of the ASX20 securities (list is on CANVAS) to

create your equity portfolio.

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Dealing Session Task • here is the timeline for your investment analysis:

*Please do not leave the report writing till the due date!!

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Week 6

• Analyse and identify 9 stocks from S&P/ASX20 benchmark (Fundamental and technical analysis)

• Thomson Reuters guest speaker • Stage 1 Report writing (Due in week 8)

Week 9

• Construct Active Portfolio 1 based on your selection by buying 9 stocks • Report writing

Week 10

• Evaluate performance of Active portfolio 1 • Construct Active Portfolio 2 • Report writing

Week 11

• Evaluate Active Portfolio 1 and 2 • Support session + Report writing

Dealing Session Task (week 10 and 11) • At the end of Week 10 and Week 11 you are required to identify

your portfolio total return (gain/loss), the contribution of the top and bottom securities as well as those of the largest positions (weightage) to your portfolio return.

• You will also need to identify whether you are underweight/overweight compare to the ASX20 benchmark. If so, provide the sectors and securities in detail.

• You are also required to determine the total risk/active risk of your portfolio as well as its sources.

• You will also need to provide an explanation as to your securities allocation and selection with respect to value and growth investing strategies.

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Log into Eikon

Please access Eikon online through this web link

https://eikon.thomsonreuters.com/index.html

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Log into Eikon

Click here to sign in

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Logging into Eikon

Then enter Username and Password which is given to you

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Please tick on this option so you don’t need to retype the user ID and password every time

Log into Eikon

• The login account has been emailed to each student directly from Thomson Reuters.

• If you experience any technical difficulty, please contact Thomson Reuters Support directly.

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Fundamental analysis

In order to conduct a more thorough and in- depth analysis of the securities, you can conduct a detailed fundamental analysis. This will provide you with key accounting measures.

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Company Specific Analysis

Type the name of the company or the company RIC code. (Select the company listed on the ASX20)

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CBA – Company details screen

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CBA – News & Research

Click on ‘News & Research’ tab for any public information released to the market

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CBA – Historical Pricing

For historical pricing, click on ‘Price & Charts’, then ‘Quotes History’.

You can export the data into excel by clicking the excel button (right corner of the screen).

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CBA – Financial Statements & Ratios

1. For financial statements and financial ratios, it can be accessed from ‘Financials’ tab.

Tabs to be used: -Income statement, balance sheet, cash flow -Ratios-key metrics, Ratios- profit/value/risk

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2. Examples of financial ratios you can consider are: 1. Dividend yield 2. ROE 3. P/E 4. P/B 5. Leverage ratio (Asset/Equity)

CBA – Peer Analysis

1. For company peer group analysis, it can be accessed from ‘Peer Analysis’ tab.

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2. You can add more variables to compare through ‘Add Column’

CBA – Peer Analysis

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Examples of financial ratios you can consider are: 1. Dividend yield 2. ROE 3. P/E 4. P/B 5. Net profit margin 6. Total debt to total equity ratio 7. Long term growth (it is an estimate of the compound average rate of EPS growth an analyst expects

over a period of three to five years)

CBA – Peer Analysis

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To see the historical graph/chart of the ratio, click on ‘Time Series Chart’

CBA – Peer Analysis

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Selecti peer companies & timeframe to see the historical trend

CBA – Peer Analysis

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To see the historical data and export to excel (if you want), select ‘View Chart Data’

CBA – Forecasted Financial Statement

For forecasted financial statements, it can be accessed from ‘Statement View’ tab.

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CBA – Intrinsic Value

For estimated share price and analyst recommendation, it can be accessed from ‘Recommendations & Target Price’ tab.

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CBA – Valuation Model

For valuation model and result, it can be accessed from ‘Intrinsic Valuation’ tab.

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Technical Analysis

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To select security following technical analysis, you are required to identify bearish and bullish pattern (buy and sell signal) using either the (i)50-day and 200-day moving average line (MA) or (ii) 20-day and 50-day MA lines, along with stock price and trading volume. You can also use other shorter-day MA or longer-day MA line if necessary.

CBA – Technical Analysis

Click on ‘Price & Charts’, then ‘Financial Chart’ tab.

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CBA – Moving Average

To add MA to the chart, click on ‘Add Analysis’ button

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CBA – Moving Average

Selecting ‘Moving Average – Simple’ and input the days for MA period.

Next, click “Add’ and then ‘OK’.

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CBA – Moving Average

To add volume to the chart, click on ‘Add Analysis’ button again, ‘Volume’.

Next, click “Add’ and then ‘OK’.

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CBA – Moving Average

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You can adjust or customize the timeframe below

CBA – Add Event Marker

To add market events (ie, dividends, news, earnings, etc), simply click on the ‘Add Event Marker’ button.

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CBA – Add Event Marker

Selecting one of the options, such as dividends, news, earnings, etc. And the news should be plotted on the same graph.

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Other useful functions

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Economic Monitor

Typing ‘em’ in the search box and selecting ‘Economic Monitor’ app

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Economic Monitor

Select Australia, Timeframe, Economic or Central Bank Events

Click ‘update’ to view the available events RMIT University - BAFI1042 34

Economic Poll

Typing ‘ecop’ in the search box and selecting ‘Economic indicator Polls’ app

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Economic Poll

Select Indicator Polls or Long-term Outlook, then Indicator RMIT University - BAFI1042 36

Select Australia

You can always download the analysis/data into excel files by simply clicking on the excel button

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