The Price is Right! Utilizing 1 of these public
companies—Target, Coke, Pepsi, Wal-Mart, or J. P. Morgan—determine
the right price for that company’s stock in the following 5 easy
steps: Visit this Web site. Type in your selected company’s name in
the Quote Search box, and select your company's stock symbol. Jot
down the current stock price. Select the Analysis tab, and find the
Analyst Recommendation box. Jot down the stock’s Earnings Per Share
(EPS) Estimate. Select the Price Ratios tab, and jot down the
current Price to Earnings Ratio (P/E) for the industry (not the
company). Using the PE valuation model to determine the right price
for this stock, multiply the industry average P/E ratio by the
stock’s EPS to estimate the intrinsic price of the stock. Answer
the following questions: Is this stock overvalued or undervalued
when compared to the current stock price? What are the analysts’
recommendations for this stock (buy, sell, or hold)? Do you agree
with them? Would you consider purchasing this stock? Why?
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