1. Essay: In two paragraphs, explain fundamental stock analysis in your own words. Include in your explanation the multiplier (P/E) valuation model, relative valuation of a stock’s growth rates and how its capitalization affects the appropriate risk premium for the stock. Consider also models for estimating earnings per share, and methods for estimating appropriate P/E multiples.
Bloomberg Part: Use Bloomberg to begin to evaluate Sprouts Farmers Market (Ticker: SFM) using fundamental analysis. Turn in the 2-paragraph essay along with the following items:
1. Using the DES (Description) screen, find:
• Full company description.
• # of employees.
• Any other important, relevant information for your company. (Basic ratios, rates, etc.?)
2. Using the RELS (Related Securities) screen, find:
• What’s relevant to your company’s financial position?
o Example: # of preferred securities, # of bank loans (What are they; how much?).
3. Using the CF (Company Filings) screen:
• Review Latest 10K and summarize the following:
o Products/Services Summary.
o Competition Summary.
o Other company specific relevant data.
4. Using the HDS (Major Holders) and OWN (Equity Ownership) screen, find:
• Top 5 holders: (HDS)
o Amount held.
o % Outstanding.
• Top 5 ownership types (by %). (OWN)
• % of institutional shares held.
• % of insider shares held.
• Are “smart” people holding the stock?
5. Using the SPLC (Supply chain) screen (using company exposure), find:
• # of Suppliers:
o Top 5 suppliers.
• # of Customers:
o Top 5 customers.
• # of Peers
6. Using the DDIS (Debt Distribution) screen, find:
• What does their debt look like? (# issues, total $)
• Maturity schedule.
7. Using the AGGD (Debt Holders) screen, find:
• Do they have “smart” debt holders?
8. Using the BRC (Research on Company) screen, find:
• Relevant recent news:
o New products, services, etc.
9. Using the DRSK (Credit Risk) screen, find:
• Can they afford to pay their obligations?
10. Using the CL (Company Litigation) screen, find:
• Are there any red flags?
