Portfolio Summary
Executive Summary:
The portfolio which consists of twenty (20) stocks from varied industries has been benchmarked against S& P500 index on weekly basis from 8-4-2014 to 29-5-2014. During the period of our analysis, while the S&P 500 index has earned return in the range of -1.43% to 0.43%, the portfolio performance on the other hand has been bumpy. For Instance, in the beginning week of our investment, the portfolio earned a return of 12.37%, by the end of last week; the portfolio earned a return of -10.99%.
Management Discussion and Analysis:
The portfolio consists of twenty stocks and has been benchmarked against the S&P 500 Index. Below is the detailed description of each stock included in the portfolio:
1)Facebook: Ticker Sign: FB
The social networking giant has been included in the portfolio with the weight of 3.31%. The stock has beta of 1.772 which indicates that it is less responsive to market index(S&P 500) returns. This indicates high volatility of the stock in relative to the S& P 500.
As for the returns from the stock, the stock started with a negative weighted return of -0.08% during first week of the investment. The stock performance improved with coming weeks and during second and third week, the stock earned a weighted return of -0.02% and 0.26%, respectively. However, post the third week, the stock price crumbled and we could not end our investment in a profitable manner and following were the weighted returns of our investment in Facebook stocks after the week 3:
2) TESLA Motor Inc: Ticker Sign: TSLA
The motor design and manufacturing entity had a significant weight-age in our portfolio amounting to 19.64%. Although the stock started off well with a 1.61% return during our first week of investment, however, a week later stock prices trembled and the return achieved entered the negative numbers of -0.83%. However, post the second week poor performance, the stock prices started to improve and so the return from the investment in the company. During third and fourth week of our investment, we were able to earn a return of 0.01% and 3.20%, respectively. However, the volatile stock price of the company again leads to downside trend and the last two weeks of our month ended with the negative returns of -1.56% and -0.50%, respectively. The graphical figure below indicates how volatile the returns from the TESLA stock were:
3) Yahoo: Ticker Sign: YHOO
The internet search engine stock weight-age in our portfolio was merely 1.27% and stock had the beta of 1.13 which indicates that the returns from the stock were near to market returns and was low volatile. The returns from the stock were never attractive, with minimum return of -0.09% offered during the first week of our investment and highest return of 0.10% was earned during fourth week. The graph below indicates the trend in the return earned from Yahoo Stock:
4) EBAY: Ticker Sign: EBAY
EBAY stock carried a weightage of 2.86% in our portfolio and is a low beta stock with the multiple of 0.90. As for the returns from the stock, once again, the performance of the stock was not much profitable for us. The graphical representation of the stock is listed below:
5) Ticker Sign: DIS
The stock carried a good weightage of 4.36% in our portfolio and was a mid-volatile stock with a beta of 1.31. The returns from the stock were not very attractive and followed the trend of upside-downside. IN the first week of our investment, the stock yielded a return of 0.03%, however, thereafter the stock prices trembled and the stock yielded negative return, which continued till fourth week when the stock yielded -0.11% returns. A week later the stock performance improved with the return of 0.08% but could not sustain very long as a week later and after that, the stock again yielded negative returns of -0.12% and 0.09%. The actual trend in the stock performance can be witnessed in the graphical representation below:
6) Starbucks: Ticker Sign: SBUX
The giant coffee house chain earned a 3.79% weightage in our portfolio and is a low volatile stock with the beta multiple of 0.84. The stock performance was very poor with negative return almost every week, except for 1st and 4th week, where it yielded a return of 0.04% and 0.07%. Below is the graphical representation of the stock returns of Starbucks stock:
7) Ticker Sign: PG
The stock had a weightage of 3.34% in our portfolio and had a least beta of 0.40 in our portfolio, indicating that the stock returns did not followed the market returns and were more of a conservative type. As for the returns, the stock yielded negative returns for the first three weeks, followed by a positive return of 0.01% and 0.07% during fourth and fifth week, respectively. The graph below indicates the trend in stock returns over the period of our analysis:
8) Nike: Ticker Sign: NKE
The footwear company owned a 6.34% weightage in our portfolio and is a low beta stock with the multiple of 0.67. During the period of our analysis, the stock returns experienced a bumpy trend and the same is displayed in the graphical figure below, however, for the major period of time, the stock earned negative returns:
9) Ticker Sign: GS
The giant investment bank stock had a high weightage of 11.68% in our portfolio and is also a high beta stock with the multiple of 1.96. As for the returns from the stock, the stock began with negative returns of -0.05% and -.0.26% for week 1 and week 2, respectively. However, post week 2, the stock prices improved and for the three consecutive weeks, the stock yielded positive returns of 0.04%, 0.22% and 0.06%, respectively. However, the positive return trend could not be continued for long and during week 5 and week 6, the stock yielded negative returns of -0.23% and -0.1%, respectively. Below is the graphical representation of stock return trend for the GS stock:
10) Ticker Sign: LULU
The stock had only a 1.84% weightage in the portfolio and with the beta multiple of 1.27. The stock returns for most of the period were positive, except for week 5th and week 6th, when the stock yielded -0.06% and -0.02%, respectively. The graph below indicates the actual trend in the LULU stock:
11) Ticker Sign: WFC
The stock had 3.91% weightage in our portfolio and is a low beta stock with the multiple of 0.86. As for the returns, the stock was never able to yield positive returns, except for week 6 when it yielded a marginal return of 0.02%. Below is the graphical representation of the WFC stock returns:
12) Ticker Sign: C
A small weighted stock with an extremely high beta multiple of 2.27 followed an increasing return trend since week 1 and trend sustained till Week 5 when the stock yielded 0.04% return. Post that period, the stock again entered the negative return region and during the last week, it yielded -0.01%. The actual stock return trend is indicated below:
13) Ticker Sign: NFLX
The stock earned a highest weightage in our portfolio (25.86%) and is a high beta stock with the multiple of 2.02. The stock began with an attractive return of 1.69%, but could not sustain it for long and for most of the remaining period it earned negative returns.
14) Ticker Sign: JNJ
The stock earned a substantial weightage of 5.23% in our portfolio and is a low beta stock with the multiple of 0.56. The stock provided nominal returns ranging from -0.06% to 0.01%. Below is the graphical representation of stock returns for JNJ stocks:
15) Ticker Sign: HSBC
The banking company earned a 3.27% in our portfolio and has beta multiple of 1.53. Just as JNJ stock, HSBC yielded nominal returns ranging from -0.13% to 0.06%. The graph below indicates the actual trend in stock returns of HSBC:
16) Ticker Sign: BAC
The stock had a least weightage in our portfolio and is a high beta stock with the multiple of 1.95. The stock performed as per its beta characteristic, i.e. high volatility in its returns as compared to market returns. The stock began with a high return of 3.04% during week 1 which plunged to -1.29% in week 2. However, the stock yielded a substantial return of 8.28% during week 3. Such volatile return trend is displayed in the graph below:
17) Ticker Sign: WMT
The stock had 3.94% weightage in our portfolio and was a low beta stock with the multiple of 0.40. The stock yielded marginal returns ranging from -0.07% to 0.10%. The graph below indicates the actual scenario related to stock returns:
18) Ticker Sign: PFE
The stock earned a marginal weightage in our portfolio of 1.54% and had a low beta multiple of 0.78. The stock in the beginning week yielded high return of 3.79%. However, in week 2 and week 3, the stock yielded negative returns of -2.04% and -1.39%, respectively. Post that period, for week 4 and week 5, the stock earned positive returns amounting to 5.83% and 0.38%, respectively. The complete trend in the stock returns is indicated in the graph below:
19) Ticker Sign: T
The stock had a low weightage and low beta of 1.47% and 029, respectively. Owing to low volatility nature of the stock, the returns were in the range of -0.05% to 0.07%. The graph below indicates the trend in the stock:
Conclusion:
