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Running head: STOCK PERFORMANCE AND EQUITY INVESTMENTS 1

STOCK PERFORMANCE AND EQUITY INVESTMENTS 4

Stock Performance and Equity Investments

Toni Stewart

Rasmussen College

Author Note

This paper is being submitted on September 6, 2015 for Professor Roundtree’s B230/FIN1000 Principles of Finance course.

Stock Performance and Equity Investments

Investors and stock analysts use the price earnings ratios and the performance of the stock to determine whether the pricing for the stock is average and profitable for both parties. Economists argue that the average price earnings ratios for a stock can help in predicting the performance of the stock of interest (Hafer, 2007). The trends in the past performance can be compared to the current situation to make predictions on investment. This report analyzes the performance of the five stocks selected.

Starbucks Corp (SBUX)

The past performance may not indicate the future success of a business. The Starbucks stock valuation is improving with the SBUX trading at 30 times the forward its earnings. This is a tremendous result which shows a much more expensive than its average for a five year plan which is 25 times. The share prices have increased over the past few months. This has been caused by the increased number of customers in their shops which increase their capital structure. The high tech plans for SBUX delivery plan that has been put into place has juiced up the sales of the coffee shop. This has been a great focus on the changing technology by the company. The promising technology has prompted investors to venture and buy shares from the market thus increasing the demand of the SBUX shares. The preferred shareholders in the SBUX are compensated first in case of any business decision of dissolving it. This differentiates them from the common stock shareholders who are paid last in case of dissolution of the Starbucks business.

Dunkin Brands Group, Inc. (DNKN)

The stock prices of DNKN have been increasing over the months. This has increased the capital base of the company. The stock growth rate has been an average of 15%. The stock price increase was an action caused by the increase in revenues which have grown by 5% in the current financial period. There has been a gross margin increase from 86.49% to 86.78% whereas the net margin of the company gas increased by 4.2%. The DNKN brands do not have preferred shareholders in their share stock market. The dividends have yielded a 2.17% income on the share capital. There was a growth in the revenue by 8.1%. There was an increase in the full year earnings by the company which ranged between 1.87 per share and 1.91 per share as compared to the previous financial statement which was ranging from $1.87 and $ 1.83 per share. The tremendous growth was driven by the positivity in their attitude as part of their organizational culture. This attracted many customers in their branches thus increasing their revenue.

Coach, Inc. (COH)

The stock prices of COH have been decreasing with time over the months, they are bought at a higher price and end up being sold in the market at a lower price thus causing a loss in the shareholders market. COH does not have preferred dividends thus the shares are reimbursed according to the articles of association.

Michael Kors Holdings, Ltd. (KORS)

KORS showed a decline in the value of the stock which made the KORS to trade at a 24% decline. The stock prices went down although there is an anticipation that the company’s stock prices will go up in the next financial year with an estimated increase of between $4.40 and $4.50. The decline in the stock price was as a result of the reduced sales revenues (Gamm, 2015) in the various stores that are located across the country. KORS have preferred stock holders and are given a greater claim of their shares than the common stock holder.

Nike, Inc. (NKE)

The NKE stock has the highest stock prices in the market. This shows an increase in their prices over the weeks. The yields of the dividends are 1.025% on the share capital (Jones, 2015). The stock prices have risen by 2.4% over the months. The goodwill of NKE has caused the stock prices performance to be great in the stock market.

References

Gamm, S. (2015). The street. stock plummet. Retrieved from http://ww.thestreet.com/story/13165676/1/michael-kors-stock-plummets-24-following-a-dramatic-dip-in-same-store-sales.html

Hafer, R., & Hein, S. (2007). The stock market. Westport, Conn.: Greenwood Press.

Jones, D. (2015). CNN money. Financial market. Retrieved from http://http://money.cnn.com/quote/quote.html?symb=NKE