Now that you have chosen a portfolio strategy for your selected client, (Client info is attached) it is time to begin constructing the portfolio. Pick one stock for the client that you intend to include in their client portfolio. Complete a ratio analysis of the stock, calculate the alpha for the stock, and provide the rationale for the inclusion of the stock in the portfolio. Indicate its merit as an investment and its potential for growth and sustainable returns, which will ultimately align with your portfolio strategy. In addition, provide a clear assessment of the strengths, weaknesses, opportunities, and threats of the company whose stock is included in the portfolio. The purpose of this information is to ensure that you are approaching the financial analysis appropriately from a procedural perspective. Your instructor will provide feedback, which will point to any criteria that require additional attention. You will eventually perform an analysis on all of your chosen stocks and submit it in the Module Seven final submission, inclusive of any indications given by your instructor.
Directions
Specifically, you must address the following rubric criteria:
Portfolio Analysis. Research and analyze one stock using the portfolio strategy you identified in Milestone One and a risk-tolerance level appropriate to the needs and return requirements of your client. Provide a financial analysis of this stock covering the associated risk, return, and tax implications. In addition, provide a clear assessment of the strengths, weaknesses, opportunities, and threats of the company whose stock is included in the portfolio. Also, complete a ratio analysis of the stock and calculate the alpha for the stock. Use the capital asset pricing model (CAPM) to develop the return for the equity security. Provide a well-supported rationale for why the security is included and how it aligns with client objectives, including an assessment of any preferential factors the client might be concerned about such as market share, innovation, and sustainability practices.
What to Submit
Submit this assignment as a 1- to 2-page Microsoft Word document with double spacing, 12-point Times New Roman font, one-inch margins, and at least three sources, which should be cited according to APA style. Your supporting research should be as up to date as possible. Any news stories, press releases, or additional sources must be dated within the last 60 days. Company data should be no more than one year old. Using older data may result in being asked to resubmit your work.
Your submission must be supported by a Microsoft Excel file to portray the financial analysis.