Overview of the performance
According to an article published on Market Watch Samsung Electronics reported that the net profit of the company rose by 5.2% which could be estimated to $1.8 Billion. The results were achieved by the successful sales of LCD panels. The sales of the company increased dramatically from 18.1 trillion won a year earlier to 21 trillion won comparatively. This rise which was observed in the share price of Samsung Electronics was 0.8% during the morning trade in Seoul (Kitchen, 2009)
The South Korean electronics giant Samsung Electronics announced an issues which the company was facing regarding the management shake ups. The world’s largest producer of memory chips and liquid crystal display panels was planning to restructure the total outlay of the company. The unit which was being distributed into two would focus more on consumer products and electronic components such as memory chips and displays. This report was reported by Dow Jones Newswires after carefully reviewing the company statement and its reports. The change will affect the senior executives of the company and the businesses with which the company is affiliated too (Market Watch, 2009).
The changes which the company is currently undergoing through are the operational challenges which the company is undergoing. This division of the company does not only produce the products for itself but also does the same for the competitors. The change in the operational systems of the company is also in advent to the downturn in the consumer demand relating to the change in their preferences (Market Watch, 2009).
Profits earned on the portfolio
In order to calculate the gain or loss earned, the returns of the stock from Samsung would be analysed.
The average rate of return for the stock in the market is
The Standard Deviation and the Coefficient of Variance for the stock price is as follows
The returns from the stock of Samsung during this time period is 17.263%. So I have invested $1,000 in the stock of Samsung then I would have received a profit of $172.63 on the other hand, the average rate of return for the stock in the market is
The Standard Deviation and the Coefficient of Variance for the stock price is as follows
The Coefficient of Variance of the stock in the international market is 499562.5392 in the international markets whereas it is -2288.3604 in the Australian Markets. The Standard Deviation of the Stock price is showing a major difference in the figures. The SD of the price of the stock is 86240.74 in the international markets whereas it is 306.51063 in the Australian markets.
The performance of stock price of Samsung has been better than the market. The stock has yielded returns of 17.26% annually in comparison to the overall return of the Australian market that has yielded a loss of 13.39%. Therefore it is recommended to invest in the stock of Samsung.
Conclusion
The Coefficient of variance from the market is negative indicating that the returns are negative. Moreover, the coefficient of variance that indicates risk per unit of return of the portfolio of Samsung is better in comparison to the overall market. Therefore investing in Samsung is more profitable than the overall market. Moreover, it also indicates that the performance of Samsung stock is better than the overall performance of the market.
References
Kitchen, M. (2009). Samsung Electronics profit beats expectations. Market Plus, http://articles.marketwatch.com/2009-07-23/news/30833815_1_samsung-electronics-expectations-strong-sales [Accessed 4 May 2013]
Market Watch. (2009). Samsung Electronics to form 2 business units. Available from http://articles.marketwatch.com/2009-01-15/news/30792758_1_samsung-electronics-consumer-products-memory-chips [Accessed 4 May 2013]
Samsung. (2011). Annual report. Available from http://www.samsung.com/us/aboutsamsung/ir/financialinformation/annualreport/downloads/2011/SECAR2011_Eng_Final.pdf [Accessed 4 May 2013]
Samsung. (2012). Samsung Profile 2012. Available from http://www.samsung.com/pk/aboutsamsung/corporateprofile/ourperformance/samsungprofile.html [Accessed 4 May 2013]
Yahoo! Finance. (2013a). ASX 200. Available from http://au.finance.yahoo.com/q/hp?s=%5EAXJO&a=00&b=1&c=2011&d=11&e=31&f=2011&g=d [Accessed 4 May 2013]
Yahoo! Finance. (2013b). Samsung. Available from http://uk.finance.yahoo.com/q/hp?s=005930.KS&b=4&a=00&c=2011&e=23&d=11&f=2011&g=d [Accessed 4 May 2013]
