Running Head: COMPANY & MARKET ANALYSIS
FIN-640 Investment Analysis & Portfolio Management
Final Project: Milestone Two
Company & Market Analysis
Southern New Hampshire University
Jeremy Jacques
January 2021
COMPANY & MARKET ANALYSIS
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Company & Market Analysis
A. Industry Trends: Macroeconomic Data & Relative/Absolute Performance
*" Growth of 10,000" figures used for comparative analysis in this section is a commonly used
chart that highlights the change in value of an initial $10,000 investment in a financial asset
during a given period of time. Often, this period of time is since the asset's inception, or during
the 10-year period since its most recent fiscal year end"
As mentioned in the previous sections, the companies included in the proposed
portfolio for XYZ Tech Co. represent different industries or sectors in the economy, specifically
the finance and banking, energy, construction, retail, and technology industries. Each of these,
industries have their own sets of microeconomic data compiled from previous years that investors
use to gauge the health and performance of the industry as a whole by. This type of analysis can
be useful to conduct prior to choosing specific companies as identifying which sectors are
performing best at that particular time can guide the search for individual securities. Each of the
industries represented in this portfolio are analyzed going back five years, as was done with the
company analysis, and there are some notable microeconomic data points identified which may be
of relevance to the portfolio investments.
Starting with the consumer technology industry, a member of the greater technology
sector, this analysis looks at microeconomic data and some of important data points that are used
in the various valuation models mentioned. By comparing this data in this analysis and utilizing
the S&P 500 corresponding data as a benchmark, it will provide a better idea of the relative
performance of the industry. The industry's average stock performance is up nearly 16-20%
throughout last year, and the industry's average revenue growth is 13.1%, though last year's
revenue growth came in at only 4.41%, illustrating the paradox seen between sales and growth
being down for most companies due to the pandemic, however stock valuations fared much better
COMPANY & MARKET ANALYSIS
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in some cases. The industry's total debt-to-equity ratio for last year is 0.13 and for some
perspective, the S&P500's current total debt-to-equity is 1.16, a substantial amount more than the
industry indicating this industry uses less debt, or leverage, to finance their operations, which can
be considered a positive in most cases. Looking back at historical figures, the industry is showing
an elevated use of debt as the ratio has been 0.05 or less for the last 5 years. The industry revenue
and earnings growth for the industry, shows a current year over year revenue growth of
approximately 12%, and the greater technology sector as a whole had the highest average return
of all sectors with 10.94%. For perspective and to gain insight into the relative performance of
these sectors including the technology one resourc