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For the stock chosen for this week's discussion, I would like to talk about Sony Corporation's (SNE) value. Sony is a Japanese company that produces and sells electronic devices for entertainment. Before considering buying common stocks in a company, I recommend looking at the financial statements.
After reviewing Sony (SNE) from https://www.nasdaq.com/symbol/sne/financials?query=cash-flow
, I noticed that its Net Income has doubled since last year, its balance statement is in order, but its cash flow is in the negatives. I also noticed that its Retained Earnings have gradually increased over the past four years, which means that Sony has been profitable but has not shared all of its profits with its investors.
As a value investor, I wanted to find some undervalued stocks. Undervalued stocks are attractive to buy because investors hope they will rise in value; moreover, overvalued stocks are best for selling because they might quickly deflate (Lumen Learning, n.d.). I did a Google search for undervalued stocks and came across Sony. There are many methods for valuing a stock. The financial statements also provided the information needed to evaluate Sony. Investors can gauge stocks by looking at the following: Earnings Per Share (EPS), Price to Earnings (P/E), Price Earnings to Growth (PEG) Ratio, and Market Cap (Lumen Learning, n.d.). As of June 2019, Sony's EPS is 4.76, P/E is 11.09, PEG is -0.59, and Market Cap is 63.94B (Yahoo et al.). After considering these numbers, Sony appears to be in good shape, so I would buy stocks because they are undervalued, but I think Sony will rise in value soon.
References
Lumen Learning (n.d.). Stock Valuation. In Boundless Finance. Portland OR.: Author. Retrieved
June 19, 2019, from https://courses.lumenlearning.com/boundless-finance/chapter/stock-
valuation/https://finance.yahoo.com/quote/SNE/key-statistics/
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