Analysis of the MASCO CORP (MAS) -Comment on the company’s price history -Comment on prospects of...

Analysis of the MASCO CORP (MAS) -Comment on the company’s price history -Comment on prospects of the industry -Estimate the company’s risk measures (beta, volatility) -Estimate the company’s CAPM return and make a buy/sell recommendation?

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Expert Solution

All data taken from https://finance.yahoo.com/quote/MAS/

The stock has a 52 week high price of $ 50 and low price of $ 27. Currently the share is trading in the close vicinity of $ 39 - 40.

The stock had been doin ggood in general in the beginning of the year and had not remain untouched by the crash engulfing the stock markets across the globe. It had seen a meltdown, like other stocks, in the month of March and since then a full fledged recovery is stll awaited.

Company's beta has been estimated to be 1.44 based on 5 years historical data. Annual volatility is close to 11 - 12%.

Expected return = Risk free rate + beta x market premium = 4% + 1.44 x 4.5% = 10.48%

My recommendation: Buy the stock with a target price in the range of $ 50 over the next 6 months. It has a strong market presence with very robust demad for its services. The company had done well except recently and is overall a performer. The compnay has a robust management team and is well poised ti take care of enormous growth in its services.

jeff jeffy answered 1 year ago

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