UNIVERSITY OF LA VERNE
BUS 530: FINANCIAL MANAGEMENT
STOCK PRICE TRACKING PROJECT – MEMO
SUMMER 2021
OBJECTIVE
The objective of this project is to reinforce to the student the concepts and principles related to tracking and monitoring stock/investment activity in order to make appropriate financial investment and budgetary decisions. During these extraordinary times in history, stock market activity is more volatile than ever, making it particularly relevant for students to understand and follow the machinations of the stock market.
OVERVIEW
One of the fundamental aspects of finance is the ability to track stock price changes of specific stocks, quantify the changes, and make appropriate investment decisions based on the analysis. In this project the student will select a stock, monitor/track its weekly performance, calculate the annualized return generated over the time period, and comment on its results. The students will be able to compare their expected/forecasted results to actual performance, a simulation, so to speak, of monitoring a budget.
STOCK TRACKING
The student will fictitiously invest $10,000 in the Company’s stock (the Company must be related to/member of the Healthcare market sector) at the current stock price on the Friday of the 1st week of class. They will record the closing stock price on that Friday. They will also forecast what they expect the closing stock price to be on the last Friday of the assignment (August 7th in this semester). This information will be recorded in the Stock Price Tracking – Template excel file, in the tab titled “Stk Price Track Temp – Expected” (cell inputs are highlighted in yellow).
In the same excel file using the tab “Stk Price Track Temp. – Actual” the student will record the actual closing price on the Friday indicated, and track the weekly change in the stock price and calculate (1) the weekly gain/(loss) in dollars and percent, and (2) the cumulative gain/(loss) in dollars and percent. Finally, on the last week of the semester the student will show the total gain/(loss), and the annualized percent return “earned” on the investment.
In the “Expect vs. Actual” tab, the student will be able to see how the stock is performing compared to their expectation. The results shown in this tab will help the student prepare their report (see Deliverables section below).
DELIVERABLES
The student will submit to the instructor via email the completed tab “Stk Price Track Temp – Expected”, including (1) the name of the Company, (2) its stock Ticker Symbol, (3) the closing stock price on 6/11/21, and (4) the expected stock price on 8/6/21, on or before Thursday 6/12/21.
The student will submit the following on the last meeting day of class:
performance, including gain/(loss) calculations.
A one-two page report describing and summarizing the results, including by not limited to some or all of the following:
Company Name & Ticker Symbol
Why selected
Expectations of performance at the beginning of the assignment.
Compare/contrast expected performance vs. actual performance
Comment on results of actual performance (include dollar amount gain/(loss) and annualized % rate gain/(loss).
Comment on long-term vs. short-term performance results and corresponding investment strategy (long-term vs. short-term).
Lessons learned about stock selection and tracking of performance, including expectations compared to real performance.
Application(s) of this assignment to tracking a forecast to actual (variance analysis).
A weekly diary of things learned, emotions felt, etc. as the stock price changes (the diary is not part of the report – it is separate).
Overall recommendation on buy/hold/sell stock.
The assignment is worth 10.0% of the student’s overall grade.
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