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Discussion Topic: Exercise your research skills

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(@ibraheem-shaikh)
Posts: 40
Eminent Member
 

Intel, the well-known chipset manufacturer, has published the following metrics (all of which are TTM, or the "trailing twelve months" data).

Intel has had a revenue of $61.7 billion, with a gross margin of 62.1%. The gross margin is a measure of the percentage of money a company keeps on each sale, which it can then use to service its debts, invest, or pay dividends. The net income was $12.7 billion, for earnings of $2.62 per share (the current stock price is $39.67), of which $1.05 was paid in dividends.

Intel had a Return on Equity of 19.56%, a Return on Investment of 13.58%, asset turnover of .53, and a Net Margin (percent of remaining revenue after deducting expenses, taxes, interest, and special dividends) of 20.6%. Based on these numbers, it seems Intel is a fairly healthy company, with good metrics for potential investors. For those following Intel, its numbers for the following year will be of special interest, as it seeks to compete with Qualcomm in the mobile market and faces increased competition with AMD's Ryzen in the mainstream desktop processor space.

 
Posted : 15/10/2017 7:30 am
(@myton)
Posts: 77
Trusted Member
 

Costco Wholesale Corp.

ROE (Return on Equity: indicative of the return with each shareholder’s equity) – 21.86%
For the past 3 years, according to Investopedia.com, there has been a steady increase in the ROE of Costco. From the fiscal years of 2013, 2014, and 2015, the ROE has been 17.58%, 17.79%, and 20.74%, respectively. This is a good sign because these years marked the recession but despite that economic downfall, the revenue for the company has been steadily increasing.
Liquidity Ratios
For the past couple of years, analysts have seen a slight decrease in the liquidity ratios of Costco. From 2015 to 2016, the current ratio, which shows a company ability to pay its short term debts, went down from 1.05 to 0.98. This means that that Costco Corp has a bit more liabilities than assets.
Solvency
Debt to Equity Ratio – 0.402%
According to Investopedia.com, a low D/E ratio infers a high investor confidence since it shows that the company is running more on investor support rather than through creditors. It can be seen that there is a downward trend in Costco’s Debt to Equity ratio and this is a good sign that the company is becoming more stable.
Net Margin – 2.43%
The net margin represents the amount of net income compared to the company’s revenue. This is an adequate but not amazing value but this shows that there is promise in the state of Costco’s business. This shows that the company is profitable compared to other companies.
Overall, I would summarize that Costco is a healthy business. It has above-average numbers however, there is promise as there is a slight but steady increase in the numbers that it produces. In terms of actual products, I would say that Costco is in good shape because the products that it sells are daily items that are necessities.

 
Posted : 15/10/2017 8:18 am
(@krp76)
Posts: 76
Trusted Member
 

Netflix financials and state of company.

P/E ratio: 244.39
Gross Margin: 31.72
Operating Margin: 4.3
ROI: 3.49
Revenue: 8.83 Billion
Market Cap: 86.13 Billion
Share Price: $199.49
EPS: 0.15 vs 0.16 expected (July 2017)

From these financials it is clear from the P/E ratio and the projected growth of the stock that the company is in a rampant growth phase. With further research into the financial strategy Netflix is expanding it's markets and creating a global user base as it added 5.2 million subscribers based off the July 2017 financial report. Moreover Netflix is focusing on original content and this has led to the speculation and rise in the stock price, along with it's expansion into global markets and tapping new user bases.

Sources
https://www.cnbc.com/2017/07/17/netflix-earnings-q2-2017.html
http://www.marketwatch.com/investing/stock/nflx/profile

 
Posted : 15/10/2017 10:23 am
(@bjv9)
Posts: 61
Trusted Member
 

I did some research on Pfizer. Here are my findings:

Current Stock Price: $36.37
Market Cap: $216.13 Billion
Revenue per employee: $542.46k (I would like to see a larger fraction of this)
Total Asset Turnover: 0.31
Net Margin: 13.63
Current P/E Ration: 31.06

From the data gathered, it would appear that Pfizer is holding steady in a maintenance phase. It is still generating solid margins, keeping the company profitable. The long term health of the company will continue to depend on the various pipelines generating successful products and studies.

 
Posted : 15/10/2017 4:41 pm
(@puneet)
Posts: 80
Trusted Member
 

I looked up Merck & Co and found

P/E ratio - 16.54
Revenue $39.5 billion
Price - $63.39
Market Cap - 172.9 billion
Debt to Equity - .62
Debt to capital -. 38
ROI - 6.54%
ROA - 8.22%
ROE - 9.78%
Gross Profit Margin - 65.1 %

Based on the profits margins and return on investments Merck seems to be doing very well with the potential for a little bit more growth.

 
Posted : 15/10/2017 4:49 pm
(@ao242)
Posts: 43
Eminent Member
 

Becton, Dickinson and Company
Financial Report 2016
Revenues $ 12,483
Gross Profit Margin 48.0%
Return on Revenues 7.8%
Return on Total Assets(G) 5.6%
Return on Equity 13.2%
Debt to Capitalization(H) 57.2%
Net Income 976
Operating Income 1,430
Dividends Per Common Share 2.64
Financial Position
Total Current Assets $ 6,367
Total Current Liabilities 4,400
Total Assets 25,586

2016 annual report shows increase in revenues nearly $12.5 billion compare to $ 10,282 the previous year 2015. But with that said, Net income increase and BD delivered strong on Earning per Shares.

Reference:
file:///Users/afeezolalekan/Downloads/BD_Annual-report-2016.pdf

 
Posted : 15/10/2017 5:43 pm
(@cy268)
Posts: 30
Eminent Member
 

I researched on the company Medtronics for the financial year ending April 2016.

Gross Profit Margin: 68.7%
Net Profit Margin: 31.9%
Current ratio: 1.749
Given the healthy range of current ratio falls somewhere between 1.2-2.0, Medtronics is doing quite well.
Quick ratio: 1.357
Quick ratio gives an index of the company's liquidity position indicating that for every $1 worth of current assets, the company has $1.357 worth of liquid assets available.

Medtronics shows a steady increase in overall growth from 2014 and brief financial analysis for 2017 reveals its profit margins are efficiently utilized.

https://finance.yahoo.com/quote/MDT/balance-sheet?p=MDT
https://www.accountingtools.com/articles/2017/5/14/financial-statement-analysis

 
Posted : 15/10/2017 6:49 pm
(@ala26)
Posts: 76
Trusted Member
 

I researched the company Prudential Financial , Inc (2017)

Revenue: $59, 289
Return on Average equity: 16.0%
Operating Return on average equity: 13.0%
Benefits and expenses: 53, 202
Net Income (Loss): $7,974

Financial position:
Invested assest: $469, 871
Total assets: $831,921
Prudential Financial Inc equity: 54,069

Based on Prudential's 2017 financial report which also included information from 2015, there has been a increase overall. The net income in 2015 was $12.17 and in 2017 it increased to $17.86.

 
Posted : 12/10/2018 7:07 pm
(@krp67)
Posts: 76
Trusted Member
 

I choose Merck for the financial assessment: I found these results base doff Yahoo financial page for companies.
Doing a brief financially assessment off 2016 since some data isn’t up for 2017 yet.
Income Sheet:
Gross Profit : 26,444,000
Net Income : 3,920,000

Balance Sheet:
Total Assets: 95,377,000
Total Current Assets: 30,614,000
Total Liabilities: 50,069,000
Total Current Liabilities: 17,204,000
Net Tangible Assets: 4,621,000

Cash flow Sheet:
Net Income: 10,376,000
Total Cash Flows From Financing Activities -9,044,000

Current Ratio = Current Assets/Current Liabilities = 30,614,000/17,204,000 = 1.77
Debt Ratio = Total Liabilities/Total Assets = 50,069,000/95,377,000 = 0.52

The health of the company as of 2016 seems to be good. The Current Ratio is above 1 which means they keep acquiring assets to help the company. For the debt ratio its below 1 going by a 0-1 scale its good as well. If that ratio was above 1 then I would assume the company is exceeding what it can financially handle.

 
Posted : 13/10/2018 10:53 am
(@rv347)
Posts: 46
Eminent Member
 

I looked up Microsoft to see how they compare financially, these were my findings:

ROI (return on investment)= 10.69.%. This value is calculated by dividing net sales by investments. Its not great, should be above 20%.
ROA (return on Assets) = 6.63. This seems low.
ROE (return on Equity)= 21.37% . This is probably the most important metric to evaluate a company by. It compares the income available to equity investors to the capital owned by equity investors. The average of more than 7,400 publicly traded US firms was 10.38% so Microsoft appears to be doing ok.
source: marketwatch website

 
Posted : 13/10/2018 5:48 pm
 ih37
(@ih37)
Posts: 78
Trusted Member
 

The company I chose to analyze is Novartis since they came out with a breakthrough product known as the KYMRIAH in 2017 that specializes in immunotherapy. A look at Novartis's financial statements show a gross profit margin ranging from 65-67% over the past year, which is not ideal, but implies that the company's costs are only about one-third of the revenue (for every $3 received, they owe $1). The net profit margin from March 2017 to 2018 is only 14-16%, but on June 2018, that value shot up to to 57.75%, indicating that their sales increased almost four-fold. The current ratio as of today is 1.15, though a more in depth look at Novartis's liabilities shows that their quick ratio is at a value of 0.89. Although this value implies that Novartis is currently in debt, it can be attributed to their high GPM and NPM values in that they recently invested in a product that is currently earning them high profit, which can lead to the assumption that the low quick ratio value will increase significantly assuming no unprecedented liabilities in the next few years. The current debt-to-equity ratio is at 0.3, which is considered good (0.4 or below). The overall health of Novartis seems to be very satisfactory with any adverse ratios being temporary as a result of the costs of the investments made.

The recent success displayed by Novartis can likely be correlated to their breakthrough work in cell therapy focused at treating conditions such as cancer, HIV, hepatitis, and other blood-based pro-inflammatory conditions. Have there ever been any breakthrough medical devices or techniques that have had a dramatic impact of the financial ratios of a company? On the other hand, have there been any medical device products that have sunk its company and what would the trends in ratios have displayed?

References:

“FDA Approval Summary: Tisagenlecleucel for Treatment of Patients with Relapsed or Refractory B-Cell Precursor Acute Lymphoblastic Leukemia”
Maura C. O'Leary, Xiaobin Lu, Ying Huang, Xue Lin, Iftekhar Mahmood, Donna Przepiorka, Denise Gavin, Shiowjen Lee, Ke Liu, Bindu George, Wilson Bryan, Marc R. Theoret and Richard Pazdur
Clin Cancer Res October 11 2018 DOI: 10.1158/1078-0432.CCR-18-2035

 
Posted : 13/10/2018 5:51 pm
(@aja38)
Posts: 77
Trusted Member
 

Lenovo End of March 2018 bank statement
Revenue $45,350 million 5% better than 2017
Gross Profit $6,272 million 3% better than 2017
Gross Profit Margin 13.8%
Pre-tax income $153 million
Expense-to-revenue ratio 13%
Total dividend per share (HK cents) 26.5
(Loss)/profit attributable to equity holders of the Company $189 Million lower then 2017 $535 million
Looking at the bank statement of Lenovo there is an increase in revenue and gross profit. Lenovo is increasing and isn't losing more on the contrary it is doing better than 2017.

 
Posted : 14/10/2018 8:36 am
(@jr377)
Posts: 79
Trusted Member
 

I chose to research Tesla Inc.

ROA: -7.64
ROE: -43.63
ROI: -14.25
Gross Margin: 19.15, Net Margin: -16.68
Liquidity Current Ratio: .86
Revenue: about $4 billion

Based off of dh239's numbers the stats are worse than last year. However there was a significant growth in revenue. Tesla has been having issues with getting it's products out, Elon Musk getting forced out, and more. This all may cause people to lose faith in Tesla and sell their shares wanting to have a return on their investment rather than lose it. The technologies they are developing and trying to push out products have caused then to burn through $430 million in cash in Q2. If Tesla doesn't turn around this negative trend, especially on the "return ons", they may want to rethink their strategy before it's too late.

 
Posted : 14/10/2018 9:14 am
(@jr377)
Posts: 79
Trusted Member
 

Duplicate due to upload issues, sorry!

I chose to research Tesla Inc.
ROA: -7.64
ROE: -43.63
ROI: -14.25
Gross Margin: 19.15, Net Margin: -16.68
Liquidity Current Ratio: .86
Revenue: about $4 billion
Based off of dh239's numbers the stats are worse than last year. However there was a significant growth in revenue. Tesla has been having issues with getting it's products out, Elon Musk getting forced out, and more. This all may cause people to lose faith in Tesla and sell their shares wanting to have a return on their investment rather than lose it. The technologies they are developing and trying to push out products have caused then to burn through $430 million in cash in Q2. If Tesla doesn't turn around this negative trend, especially on the "return ons", they may want to rethink their strategy before it's too late.

 
Posted : 14/10/2018 11:17 am
(@jpg32)
Posts: 29
Eminent Member
 

I'm doing my research on Globus Medical, Inc.

From their 2017 annual report:

Revenue: 635.98 million
Cost of Sales: 150.45 million
Net Sales: 169.93 million
Assets: 1078.50 million
Liabilities: 110.72 million
Equity: 765.23 million
Investments: 967.78 million

Gross Margin: 76.3%
Net Margin: 26.7%
ROI: 17.5%
Current Ratio: 9.75

The gross margin is on the upper end of the spectrum meaning they are making a lot of money without the need to spend a lot of money. The net margin still shows a healthy profit even after all the other costs of running Globus. The ROI is fairly healthy as well. The investors earned back 17.5% of their investment in 2017. Their current ratio is way above one so debt is not an issue for them and have a lot of room to spend so we may see acquisitions soon in the future.

 
Posted : 14/10/2018 2:21 pm
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