Question

In: Finance

Where it says week 3 stock prices above the chart that I have posted is the...

Where it says week 3 stock prices above the chart that I have posted is the week three prices. These are all the old prices. I need the current ones based off of the information that I have provided from the previous answer. Everything from the top of this page on down to that chart is the previous anwer to the question. Based off of that information, I will need the new question answered at the bottom of the page.

This is the previous question that I posted to get the answer to the chart below if this helps. The actual question that I need answered now is near the bottom of the page and it plays off of the the previous answer to the question given.

Indicate the companies you are investing in: Select three (3) US companies that are publicly traded. Please use your knowledge and experience and pick, as many stocks as you’d like. Lastly, make sure you are practicing good diversification. Jim Cramer, Money Manger, on CNBC, plays a game at the end of his show called “Am I Diversified.” Check out a short clip to get a sense of industry diversification at https://www.youtube.com/watch?v=f3lDxexupcE.

Sources of Information: There are many ways to find such companies and the stock prices, including the New York Stock Exchange at http://www.nyse.com, Google Finance athttp://google.com, NASDAQ at http://www.nasdaq.com, and http://finance.yahoo.com.   

Indicate the amount you are investing in each company: Decide how you will divide $25,000 across the three (3) companies; e.g. $10,000 in Company 1, $10,000 in Company 2, and $5,000 in Company 3. You decide the amount you are investing in each company. You do not have to provide any analysis to justify your decisions. You must only provide some reason for picking that company. For example, you might invest in Ford because that company gets a lot of your money and you hear that Ford is doing well, and will continue to do well.

Indicate the number of shares you are buying, and the price of the shares you are buying for each company: Once you decide the companies and the amount for each company, determine how many shares you can buy. If Company 1 is selling for $42.16, then you may buy $10,000/ $42.16, or 237.19 shares. But you cannot buy a part of a share, so you decide to buy either 237 or 238. In this example you buy 237 shares, at $42.16 per share, investing $9,991.92. You won’t be able to buy exactly $10,000, or $5,000, or $25,000, but it will be relatively close.

Answer

I will be investing in three companies as below:

• Wal-Mart Stores, Inc (Ticker Code: WMT)

• Alphabet Inc (Ticker Code: GOOGL)

• Tesla Inc (Ticker Code: TSLA)

The decision to invest in these companies is because these are high growth companies and are present in different sectors of the economy. So, the investment portfolio would be well diversified. Investment reasons: • Walmart: Walmart is a leader in retail and provide good scope of growth in the future. Hence it is wise to invest in it. • Alphabet Inc: It is the parent of Google, which is at the forefront of innovation and has delivered excellent value to all stakeholders. High growth expected to continue and hence goo investment option • Tesla: Leader in terms of use of renewable energy for fueling transportation solutions. Huge future potential and hence justified for investment.

Week 3 Stock Prices

​Investment Share price as of 05 April 2017 Total no. of shares to be bought Total investment amount % of investment
Walmart 72.08 1179 $      84,982 34%
Alphabet 854.05 100 $    85,405 34%
Telsa 302.18 263 $    79,473 32%
Total 1542 $    249,861 100%

Use the information listed about the three companies you previously chose to help you answer the question that follows. The question is broken up in three parts. Please note that this assignment is based on a pretend scenario and fictitious money. However, the assignment is based on actual stock pricing in real time situations.

Here Is The New Question

You may be following your stock every day, but if you’re not, you must:

Record the current price of the stock for each company you selected. You may use any price during this week (e.g., day one price, the opening, the low, the high, the close, or any price you find when you check it during the day). Using MS Excel spreadsheet or MS Word document, put your Week 3 and New stock prices side-by-side, to show your comparison.

Then, determine the current value of your total investment. Do not make any changes to your investment at this time. Calculate your total based on the number of shares and the new price per share, for each company.

Last, provide your opinion / assessment of your investments. Evaluate the results of your current investment. Are you happy with the result and the trend? Are you upset because your investment is worth less than $25,000? Feel free to speculate / guess at why you believe the stock increased, decreased, or remained static.

Solutions

Expert Solution

The total investment was $249,861 and the current value of investment is $312,655. Hence the total profit is $312,655-$249,861=$62,794. I am happy with the investment as it gave a return of 25.1% {(312655/249861)-1}.

1.Growth in the digital business of Walmart led to increase in its share price.

2.Growth in Google ad volume helped the increase in price of the Alphabet's shares.

3.Recently, Tesla's share price increased rapidly, due to expansion of its charging network in China.

Investment Share price as of 05 April 2017 (US$) Total no. of shares to be bought Current Share Price (US$) Current Value of investment (US$) Total investment amount (US$) Profit/Loss (US$)
Walmart 72.08 1179 92.44       108,987 84,982      24,005
Alphabet 854.05 100 1,112.08       111,208 85,405      25,803
Tesla 302.18 263 351.56        92,460 79,473      12,987
Total 1542       312,655 249,861      62,794

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