Research about the valuation of the company to try to determine if its stock price is overvalued or undervalued.
Stock and Bond Valuation
For your second SLP assignment, continue to do research on the company you chose to write about for your Module 1 SLP. This time you will be doing research about the valuation of the company to try to determine if its stock price is overvalued or undervalued. You can use Google Finance, Yahoo Finance, or similar Web pages to find the financial information about this company.
Write a 2- to 3-page paper with the following items:
What is the P/E ratio of this company? How does the P/E ratio compare to other companies in this industry? Based on the P/E ratio, do you think the company is overvalued or undervalued?
Find the company’s balance sheet. Calculate the book value of each share. This can be done by taking the total assets and subtracting total liabilities. Then divide the number you get by the total number of outstanding shares. Is the number you get higher or lower than the current price of the share? Based on what you’ve found, would you say the stock is overvalued or undervalued?
Finally, do a search on what different analysts have to say about your company. Do they generally recommend buying the stock or selling the stock? What reasons to they give for their assessment? Find at least three analyst reports about this company.
………………….Answer preview……………………
It P/E ratio is P/E Ratio (including extraordinary items) -41.61 for the year 2016. Comparing it with general motors for the same period in time, general motors was at 7.17 (GM Company Financials, 2018).The two companies are in the motor vehicle industry hence a great variation in their P/E ratio. Basing the……………..
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