Project Portfolio Review Part II
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Jan 9, 2024
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Project Portfolio Review
–
Part II
Ricardo Ramirez
FSMA 6020
–
Investment Analysis
P/L amount and percentages have been calculated as of Friday after closing hours of the
market. Average price paid is calculated in USD.
AAPL:
Based on Apple’s most recent financial statements, the company has ROE of
172%. While on average is 136% and their industry is 3.5%. Therefore, Apple Inc's ROE is better
than 96% of 2,926 companies in the Technology industry. Last ex-dividend date was on Nov 10,
2023, and the company distributed $0.24 per share which represents a 0.51% dividend yield with
a 0.15 dividend payout ratio. Currently Apple has a 2.8% sustainable revenue growth.
Symbol
Name
Average Price Paid
Quantity
Profit Loss
Profit loss Percentage
AAPL
Apple Inc
171.35
100
$1,834.00
10.70%
AMGN
AMGEN Inc.
264.62
10
$7.70
0.29%
AMZN
Amazon.com
Inc.
127.26
100
$1,792.00
14.08%
GOOGL
Alphabet Inc - Ordinary Shares - Class A
130.99
50
$216.00
3.30%
META
Meta Platforms Inc - Ordinary Shares - Class A
301.42
27
$907.74
11.15%
MSFT
Microsoft Corporation
316.12
30
$1,611.90
17.00%
NFLX
Netflix Inc
369.23
10
$966.80
26.18%
NVDA
NVIDIA Corp
435.76
30
$1,716.60
13.13%
SBUX
Starbucks Corp.
92.41
30
$394.80
14.24%
TSLA
Tesla Inc
250.09
100
-$1,579.00
-6.31%
Actual 2023 Price/Earnings Ratio is 30.94, with a 2024 estimate of 28.92 while forecast
P/E growth rates for 2024 is 6.93 and a forecast 12-month forward PEG ratio is 2.62. Growth rates
for 2025 is estimated at 8.52, implying a strong correlation with the previous sustainable revenue
growth calculation.
The intrinsic value of Apple under the base case scenario is $138.35, which comparing it
with the current market price, it makes the stock overvalued by 27%. However, ROE increased in
the last 3 years from 74% to 172%, and ROIC from 30% to 42%. In terms of revenue, Apple has
been growing by 12% per year in the past 3 years and is forecast to growth at rate of 8% per year.
P&V correlation stands at 92%. Value CAGR at 12%.
Market capitalization of Apple shares increased by 233.08% over the past 5 years. The
primary factor behind the change was an increase in P/E multiple from 14.9 to 30.4, leading to a
growth in the market capitalization of Apple Inc by 138.19%.
AMGN:
Amgen Inc ROE currently is at 126.5%, with a positive average of 90% and much
better than their competitors in the industry which averages a -29.7%. Last ex-dividend date was
on Nov 16
th
, 2023, and the company distributed $8.52 per share which represents a dividend yield
of 3.17% with a dividend payout ratio of 0.59. Therefore, history data of dividend increases and a
solid financial foundation, make this company as an attractive option for value investors seeking
stable dividend income, and part of the reason it was chosen for this project based on the portfolio
strategy.
Currently Price/Earnings ratio stands at 21.6, higher than the median of 19.3 but lower than
the industry average of 24.4. Forecasting in 2024 a P/E ratio of 14.2, for 2025 a 12.6, and for 2026
a 12.1.
The intrinsic value of one AMGN stock under the base case scenario is 215.95 USD.
Compared to the current market price of 265.07 USD, Amgen Inc is overvalued by 19% with a
P&V correlation of 16% and value CAGR of 4%. Although ROE has been increasing in the last 3
years from 71% to 126%, ROIC in the past 12 months is positive and equal to 17% with a stable
linear forecast of 3 years of 17% as well.
AMZN:
Based on Amazon.com Inc's most recent financial statements, the company has
ROE of 12.5%. While on average is 18% and is better than the industry value average of 7%.
Amazon have never declared or paid cash dividends on their common stock. Current P/E is 74.7,
higher than the median of 73.6, and much higher than the industry average of 15.3. Amazon
forecasts a PE estimate of 65.1 in 2024, 45.4 in 2025, and 32.6 in 2026.
The intrinsic value of one Amazon stock under the base case scenario is 82.53 USD.
Compared to the current market price of 145.18 USD, Amazon.com Inc is overvalued by 43%.
Historical valuation indicates this stock's market price has continuously exceeded its intrinsic
value. This enduring overvaluation may be indicative of market overconfidence or non-
fundamental influences. Amazon offers a P&V correlation of 62% and a Value CAGR of 15%.
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Market capitalization of Amazon shares increased by 92.47% over the past 5 years. The
primary factor behind the change was an increase in revenue growth from 233B to 554B, leading
to a growth in the market capitalization of Amazon.com Inc by 122.4%.
GOOGL:
Most recent financial statements indicate the company has a ROE of 25.3%.
Alphabet Inc's ROE is better than 84% of 1,718 companies in the Media industry.
Like many
technology stocks, Alphabet has never paid a dividend to shareholders. Current P/E stands at 25.4,
higher than the median of 24, and much higher than the industry value of 18.1.
The intrinsic value of one GOOGL stock under the base case scenario is 112.42 USD.
Compared to the current market price of 135.31 USD, Alphabet Inc is overvalued by 17%.
Indicating a P&V correlation of 63% and Value CAGR of 6%.
The market capitalization of
the company’s
shares increased by 128.26% over the past 5
years. The primary factor behind the change was an increase in revenue growth from 137B to
297B, leading to a growth in the market capitalization of Alphabet Inc by 120.52%.
META:
According to most recent financial statements, META has ROE of 18.5%, better
than 79% of 1,718 companies in the Media industry. Meta Platforms does not yet pay a dividend.
Currently the company has a P/E of 37.1 higher than the median of 26.9, and higher than the
industry value of 18.1. The company forecasts a P/E of 24.5 for 2024, 19.8 for 2025, and 16.8 for
2026.
The intrinsic value of one META stock under the base case scenario is 274.78 USD.
Compared to the current market price of 335.04 USD, Meta Platforms Inc is overvalued by 18%.
Also indicating a P&V correlation of 52%, and a value CAGR of 6%.
Market capitalization of META shares increased by 114.88% over the past 5 years. The
primary factor behind the change was an increase in revenue growth from 55.8B to 127B, leading
to a growth in the market capitalization of Meta Platforms Inc by 123.36%
MSFT:
Using Microsoft Corp’s most recent financial statements, t
he company has ROE
of 39.1% which is significantly better than 90% of 2,926 companies in the Technology industry.
The company’s
last regular dividend was on Nov 15, 2023 (ex-date) with the amount of $0.75 per
share, with a dividend yield is 0.75% (lower than the sector average), and a dividend payout ratio
of 0.26.
Currently Microsoft’s PE ratio stands at 35.6 which is higher than the median of 32.1, and
higher than the industry value of 22.9.
The intrinsic value of one MSFT stock under the base case scenario is 250.46 USD.
Compared to the current market price of 369.85 USD, Microsoft Corp is overvalued by 32%.
Indicating a P&V correlation of 80% and a Value CAGR of 10%.
Market capitalization of
the company’s
shares increased by 246.56% over the past 5 years.
The primary factor behind the change was an increase in earnings growth from 33.5B to 77.1B,
leading to a growth in the market capitalization of Microsoft Corp by 165.11%.
NFLX:
the company has ROE of 20.9%, better than 81% of 1,718 companies in the Media
industry. Netflix does not pay dividends to shareholders; they reinvest profits for growth and
expansion. Current P/E is 45.6, higher than the median of 43.8 and significantly higher than
industry value of 18.1. The company forecasts a P/E of 39 in 2024, 30.8 in 2025, and 24.9 in 2026.
The intrinsic value of one NFLX stock under the base case scenario is 271.14 USD.
Compared to the current market price of 465.91 USD, Netflix Inc is overvalued by 42%. Indicating
a low P&V correlation of 26%, and a value CAGR of 10%.
Market capitalization of
the company’s
shares increased by 65.45% over the past 5 years.
The primary factor behind the change was an increase in earnings growth from 1.2B to 4.5B,
leading to a growth in the market capitalization of Netflix Inc by 171.35%.
NVDA:
Based on NVIDIA Corp's most recent financial statements, the company has ROE
of 17.9%, better than 77% of 832 companies in the Semiconductors industry.
The company’s
last
quarterly dividend of $0.04 per share was on Sep 6, 2023 (ex-date). The annualized dividend
payment of $0.16 per share represents a current dividend yield of 0.03%.
The dividend payout
ratio of Nvidia is 3.8%, which is s lower than the Technology sector average.
The company has a P/E of 278.7, which is remarkably higher than the median of 115.4 and
the industry value of 23.5. Nvidia P/E forecast a P/E of 44.8 in 2024, 28.3 in 2025, and 23.5 in
2026.
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The intrinsic value of one NVDA stock under the base case scenario is 220.38 USD.
Compared to the current market price of 492.98 USD, NVIDIA Corp is overvalued by 55%.
Indicating a significantly low P&V correlation of 4%, and a negative Value CAGR of -1%.
Market capitalization of
the company’s
shares increased by 1,290.69% over the past 5
years. The primary factor behind the change was an increase in P/E multiple from 21.1 to 117.9,
leading to a growth in the market capitalization of NVIDIA Corp by 842.72%.
SBUX:
the company has a current ROE of -49.5%, which is only better than 11% of 999
companies in the Hotels, Restaurants & Leisure industry. Starbucks's latest quarterly cash dividend
of $0.57 per share was issued to shareholders on record before Nov 9, 2023. At an annualized rate
of $2.2 per share, the stock yields 2.08%. The dividend payout ratio of Starbucks is 66.7%, which
is less than the sector average.
Starbuck’s has a P/E of 29.4, lower than the median of 32, but higher than industry value
of 19.2 with a forecast P/E of 25.4 in 2024, 21.7 in 2025, and 18.3 in 2026.
The intrinsic value of one SBUX stock under the base case scenario is 107.064 USD.
Compared to the current market price of 105.975 USD, Starbucks Corp is undervalued by 1%.
Indicating a P&V correlation of 21%, and a value CAGR of 7%.
Market capitalization of
the company’s
shares increased by 48.89% over the past 5 years.
The primary factor behind the change was an increase in revenue growth from 25.3B to 36B,
leading to a growth in the market capitalization of Starbucks Corp by 43.34%.
TSLA:
the automobile company has ROE of 23.1%, which is better than 86% of 150
companies in the Automobiles industry. Tesla has never declared dividends on their common
stock, according to their statement, they intend on retaining all future earnings to finance future
growth and therefore, do not anticipate paying any cash dividends in the foreseeable future.
Tesla has a P/E of 69, lower than the median of 107.4 but higher than the industry value of
13.9. The company forecasts a P/E of 69.3 in 2024, 52.6 in 2025, and 40.5 in 2026.
The intrinsic value of one TSLA stock under the base case scenario is 88.98 USD.
Compared to the current market price of 234.3 USD, Tesla Inc is overvalued by 62%. Indicating a
P&V correlation of 29%, and a Value CAGR of 0%.
Market capitalization of
the company’s
shares increased by 57.37% over the past 3 years.
The primary factor behind the change was an increase in earnings growth from 690m to 10.8B,
leading to a growth in the market capitalization of Tesla Inc by 347.95%.
After reviewing multiple topics such as an in-depth fundamental analysis of each stock,
and valuation against the current market price including target prices set by Wall Street analysts,
we would continue to follow the initial strategy of “buy and hold” until the end of the term since
there is only one stock performing negatively (TSLA) which has been historically very volatile,
with a total P/L of
$7,868.54.
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References
Equity Research & Valuation Platform
. AlphaSpread.com.
https://www.alphaspread.com/dashboard
Stock market, data updates, reports & news
. Nasdaq. https://www.nasdaq.com/
Yahoo!
Yahoo Finance - Stock Market Live, quotes, Business & Finance News
. Yahoo! Finance.
https://finance.yahoo.com/
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