Why should we buy this stock? (Valuation)

  

 Company 1: Helios and Matheson Analytics Inc (HMNY) 

Write a short (5 page) presentation recommending a stock based on the relationship between the stock’s price and its calculated “value.”  Students will use the Capital Asset Pricing Model and discounted cash flow analysis to determine “value”. 

http://www.moneychimp.com/articles/valuation/dcf.htm?Kc=17.00

Please explain how you selected the relevant inputs for DCF and CAPM.

Please discuss both the quantitative and qualitative logic used to support the recommendation.  The paper should include an overview of the current trading multiples, overview of financials, analysis of future prospects as well as the establishment of price target for the equity. 

Converse why this stock would be a good buy using knowledge on the current financial market

Feel free to include any other brief observations about the equity that may be relevant for your recommendation.

Company 2: K12 Inc. (LRN) 

Write a short (5 page) presentation recommending a stock based on the relationship between the stock’s price and its calculated “value.”  Students will use the Capital Asset Pricing Model and discounted cash flow analysis to determine “value”.

 http://www.moneychimp.com/articles/valuation/dcf.htm?Kc=17.00

Please explain how you selected the relevant inputs for DCF and CAPM.

Please discuss both the quantitative and qualitative logic used to support the recommendation.  

The paper should include an overview of the current trading multiples, overview of financials, analysis of future prospects as well as the establishment of price target for the equity.

 Converse why this stock would be a good buy using knowledge on the current financial market

Feel free to include any other brief observations about the equity that may be relevant for your recommendation.

*******(Please write separate 5 page papers for the two companies, do not incorporate one company into another)******* TOTAL 10 PAGES