Stocks investment

Portfolio Review

Learning Team B

FIN/402

03/09/2020

Troy Mahone

The stocks in this portfolio are the following: PepsiCo, Apple, Microsoft, Aritzia, and Amazon. While investing in stock an investor should consider return, risk, features, stock quotes, and types of dividends. An analysis was conducted to determine if the aforementioned stocks should remain in the portfolio.

Stock Reviews and Discussion:

PepsiCo has a persistent dividend increase over the years and have extensive product line with increasing demand, which means that it will keep growing in the future as well. This stock should remain in the portfolio considering its persistent growth.

Apple’s dividend yield is 1.3% and is expected to increase in May 2020. Its quarterly revenue and profit has increased as compared to its previous yearly report. It is expected that its revenue and earnings will grow from 10% to 11% and 20% to 21% respectively. It shows that its stock will grow in the future so it is a good investment opportunity. Investors who have owned Apple stock over the past decade have been amply rewarded, as its shares are up close to 1,000% over this period. The iconic smartphone company has been at the forefront of the technological era, and its innovative culture and visionary products have captured the hearts and minds of many consumers. As a result, smartphones are now a ubiquitous part of life. Apple literally created a whole new industry from scratch through its iPhone, inviting a slew of other companies to mimic its features. However, other companies have not come close to establishing a parallel level of brand loyalty and status. The decision is to keep this investment due to its expected growth potential.

Microsoft has constant growth and its historical data shows it is a safer investment that provides predictable and constant growth due to its position in the marketplace as a long-time and trusted tech giant. While investment in this stock is not intended to provide immediate and significant returns, it out performs other players in its industry such as Cisco. When reviewing the prior five-year performance of these stocks, Microsoft had better yields and a more stable upward momentum. Hold on to this stock, as it is a less risky investment.

The Aritzia (ATZAF) has stable gross margins and its stock is predicted to be $29 higher this year, which indicates future stock growth so it will be beneficial in term of investment. In January of 2020 it reported positive comparable sales growth for its 21st consecutive quarter. This growth is only predicted to increase due to the company’s recent focus on digital online selling and the use of influencer marketing. It also branched out into the menswear market, which will increase its customer base (Aritzia, 2020). This investment also assists in the diversification of this portfolio. It is an industry separate from the tech industry. As stores are currently focused in Canada and only recently expanding throughout the U.S, it also provides diversification in terms of geographical and political factors that may affect its market price. As it is expecting future growth, this stock remains in the portfolio.

In 2016, Amazon’s gross profit was $47,722,000 and its net income applicable to common shareholders was $2,371,000. While in 2019, its end of year gross profit totals were up to $114,986,000, with net income applicable to common shareholders also increased to $11,588,000. These values indicate a growth trend in the company. It joined the grocery/meal delivery service; and has been investing in computing, transportation, and video services. Amazon is leading the market with their Amazon smart speakers and now offers next day shipping for their prime membership customers. It is constantly joining new markets to expand its available services and to become more competitive. Amazon is beginning to join the transportation market, to offer its own delivery service, and is discussing health/online pharmacy options as well. Ninety-six out of a ninety-nine IBD Composite Rating proves that Amazon is a fantastic stock to invest in, with an 84 Relative Strength Rating (Deagon, 2020). Even though its stock value has slightly decreased, it is expected to bounce back. Continue to hold this investment based on historical trends and potential for future growth.

The stocks discussed above are thought to be good investments as they are either proven to have great return on investment with consistency or are a solid start-up with massive growth and expected potential. The mix of stocks selected offer diversification in terms of industry, geography and political environments. We feel confident that investment in these companies will provide a strong and profitable portfolio.

References Aritzia. (2020, January 9). Aritzia Reports Third Quarter Fiscal 2020 Financial Results. Retrieved from Aritzia: https://investors.aritzia.com/investor-news/press-release-details/2020/Aritzia-Reports-Third-Quarter-Fiscal-2020-Financial-Results/default.aspx Deagon, B. (2020, March). Is Amazon Stock A Buy Right Now? Here's What Earnings, Charts Show. Retrieved from Investor's Business Daily: https://www.investors.com/news/technology/amazon-stock-buy-now/ Smart, S. B., Gitman, L. J., & Joehnk, M. D. (n.d.). Fundamentals of Investing. Pearson.