Business 2 Part

Security selection is a process which can be used to determine the security and other assets to be included in a portofolio (Quinn, 2012).To make these selections one must always consider the risk, return and other factors since its major aim is to increase profits on all investments’ in a portfolio and ensure minimal or no loss. This process enables an investor to determine the stocks to invest in according to their growth patterns, assets, revenue earnings and more of a company.

With $20,000 to invest in stocks through analysis using security selection the following companies are the best to invest in: CocaCola.co (KO) With its beginning price at $43.92 ,136.612 Shares at a price of $6,000 (msn.money, 2014), Avista Corp(AVA)beginning price $30.95 ,290.79 shares at a total price of $9,00 (Avista Corp, 2014) , Optibase LTD(OBAS) beginning price $6.52 ,766.87 Shares at a price of $5,000 (msn.money, 2014).

After using the analysis to consider which company to invest in Coca-Cola is one best first due to their launch in share a coke campaign which has lead the company in to increased profits which was last seen in 1998 .It offers a direct investment plan giving investors higher returns on equity (ROE) seens the money you invest the returns are higher than the industry average.

With assets been one of the things to consider in stock buying .Avista recent sales of its subsidiary ECOVA to GDF SUEZ and its proceeds been used to repurchase shares lead to its increase in value making every investor have an eye on it .This is one of the best companies to invest in.

Optibase is considerably one of the best companies to invest in with it been in the real estate business which is the fastest growing market it has shown its confidence with investors due to its constant growth since the year 2010. Many reasons are made before an investor can choose which stocks to buy in our case we look at the three companies we invested in:

Coca-Cola

This is the world’s leading beverage company .It was founded in 1886 by John Pemberton and its head quarters are located in Atlanta, Georgia. It is the home to 16 billion dollar brands including four of the top five drinks: coca-cola, diet coke, fanta and sprite. The company also offers other non alcoholic drinks such as water and juice. With the world’s largest beverage distribution, the Coca-Cola Company is able to reach to its thirsty consumers in more than 200 countries. (CNBC, 2014)

Stock information

According to Valstelica (2014) shares of the Cocacola co rose since 1998 on Tuesday.This global leading bevarage company rose 0.7 percent to $43.90 which was last seen in hit that high in July 15,1998.this has lead the company in performing better than other companies like S&P 500’s 5.3 percent rise.This is among the few companies that on the new stock exchange hit a 52 week high on Tuesday compared to the 143 that hit a 52 –week low

Chart

According to the six month chart the stock has been constantly rising to $43.92 per share

Source: (CNBC, 2014)

Forecast

Source: (Nasdaq, 2014)

According to analysts through this diagram it’s expected that the company will have a tremendous growth with its earnings at an average of 7.25%.and that the earnings in the next few years will grow at a rate of 6.47%.

Comparison against industry and peers

With its peers in the industry been Pepsi.co, Coca-Cola Femsa Sab De CV, Monster beverage corporation, Cott corporation its projected that its moat might have a negative impact on their quarterly reports due to Pepsi having a greater ROE AND EPS .But according to the companies preliminary report the profit margins were higher than their peers with a 18.5 percent .Avista corp

The company is engaged in generating and transmitting of electricity through innovative energy solutions for all kinds of customer like residential, commercial and industrial customers. It has two business Segments, Avista utilities and Ecova which engage in wholesale purchases and sales of electricity and natural gas .It was founded in 1889 and has its headquarters Spokane WA.

Stock information

According to market wire the company’s shareholders rose from$25.7 million to $100.9 million thus making it $1.67 per diluted share. (MarketWire, 2014) .With acquisition of Alaska energy in a strategy to serve customers better and increase their base and profit.

Avista performance chart

The chart shows that in the month of October the stock will rise again

Source: (CBNC, 2014)

Forecast

Source: (Avista Corp, 2014)

The 12 month forecast chat shows that Avista has a median target of 32.0 with a high estimate of 33.00 and a low estimate of 30.00. In this the median estimate shows a 2.14% increase from the previous price of 31.33 showing its potential to rise in the coming days.

Comparison against industry and its peers

Its peers are Allette.inc, Alliant energy corporation, Ameren corp. Which are also fairly doing well in the market. Its strategy to buy Alaska energy and adjusting of their prices was to get more customers and serve them better in a long term strategy to beat their peers.

Optibase (OBAS)

Optibase limited is a real estate company based in Herzliva Israel. But it has major investments in Florida, Miami, Texas and Geneva. The real estate market includes the purchasing and operating of real estate properties for leasing and resale primarily for commercial, industrial, office space, warehouse and also residential purposes.

Stock Information

According to (BusinessWire, 2014) fixed income from real estate rose from $3.4 million to $3.6 million .The net income which was attributable to shareholders was $159,000 making it $0.03 per diluted share. Though increase in operating expenses the gross income did not go down.

Optibase performance

According to the chart there is a constant growth from the month of august this is greatly due to the sale of their condominium in Miami Beach.

Source: (CNBC, 2014)

Optibase forecast

Source: (Reuter, 2014)

The company forecast on building more houses especially focusing on residential houses which are on the rise.

Comparison against industry and its peer

S&P 500 is one of the greatest rivals against Optibase with its constant rise of 5.3 percent but with its concentration in building condominiums it’s expected it will have a stiff growth towards the end of the year.

References

Avista Corp. (2014). Retrieved October 2014, from market.ft: http://markets.ft.com/research/Markets/Tearsheets/Forecasts?s=AVA:NYQ

Avista Corp. (2014). Retrieved October 2014, from msn.money: http://www.msn.com/en-us/money/stockdetails/fi-126.1.AVA.NYS

BusinessWire. (2014). Optibase Ltd. Announces Second Quarter Results. Retrieved OCTOBER 2014, from http://www.nasdaq.com/press-release/optibase-ltd-announces-second-quarter-results-20140822-00250

CBNC. (2014). Avista Corp. Retrieved October 2014, from CNBC: http://data.cnbc.com/quotes/AVA/tab/2

CNBC. (2014). Optibase Ltd. Retrieved October 2014, from CNBC: http://data.cnbc.com/quotes/OBAS/tab/1

CNBC. (2014). The Coca-Cola. Retrieved October 2014, from CNBC: http://data.cnbc.com/quotes/KO

CNBC. (2014). THE COCA-COLA CO. Retrieved October 2014, from CNBC: http://data.cnbc.com/quotes/KO/tab/4

MarketWire. (2014). Avista Corp. Reports Financial Results for Second Quarter and Year-To-Date 2014, Raises 2014 Earnings Guidance. Retrieved OCTOBER 2014, from http://www.nasdaq.com/press-release/avista-corp-reports-financial-results-for-second-quarter-and-yeartodate-2014-raises-2014-earnings-20140806-00240

msn.money. (2014). Coca-Cola Co. Retrieved October 2014, from msn: http://www.msn.com/en-us/money/stockdetails/fi-126.1.KO.NYS?symbol=KO&form=PRFISB

msn.money. (2014). Optibase Ltd. Retrieved October 2014, from msn: http://www.msn.com/en-us/money/stockdetails/fi-126.1.OBAS.NAS?symbol=OBAS&form=PRFISB

Nasdaq. (2014). Coca-Cola Company (The) Analyst Forecasts Earnings Growth. Retrieved October 2014, from NASQAD: http://www.nasdaq.com/symbol/ko/earnings-growth

Quinn, B. (2012). Commercial and Investment Banking and the International Credit and Capital Markets: A Guide to the Global Finance Industry and its Governance. New York: Palgrave Macmillan.

Reuter. (2014). Optibase Ltd (OBAS.OQ). Retrieved OCTOBER 2014, from REUTER: http://www.reuters.com/finance/stocks/overview?symbol=OBAS.OQ

Valstelica, R. (2014). US STOCKS-Coca-Cola shares hit highest level since 1998. Retrieved october 2014, from US STOCKS-Coca-Cola shares hit highest level since 1998