Security Analysis

Description Security Analysis Project You are writing this report about Exxon Mobil Corp. (NYSE: XOM) as an equity analyst, preparing this report for your superior, a portfolio manager for a mutual fund company. The Value Line Investment Survey that we will use has $101.36 as the current closing price for Exxon’s common stock. That was the stock closing price on May 27, 2014. Therefore, you will write this report as if you were on May 27, 2014. While there is no required length to the project, a good project will have a length of about 6 pages (Times New Roman or similar font, 12-point font size). Therefore, be as objective as possible. Teams must submit the sections with references, tables and appendices in only one document by uploading it to a Blackboard “Drop Box”. Please name your file as ”SAP_Last_Name” with one of your team members’ last name. Section I a) Description of the Firm’s Business Lines – you need to find a correct balance from too little and too much information in this sub-section as you provide a quick overview of the firm and a description of the various lines of business of the firm. b) Macro-Economic Analysis – Provide me with a thorough overview of the current state of the domestic economy with an eye on the areas most relevant for the firm’s business prospects. You will find valuable information about the economy in the Fed’s Beige Book most recently released as well as in the Survey of Current Business. Based on the Domestic / International split of the firm’s revenues, you must also discuss the global economic environment with emphasis on the regions important for the firm. You can find such information from the IMF’s World Economic Outlook publications among other resources. c) Industry Outlook – recommended check, among others, the following resources available at the University Libraries to direct your industry research – (a) Business Source Complete, a comprehensive business database with material from different publications, (b) IBIS World, a data source that includes vital information on every industry in the U.S. Economy, and (c) Mergent Archives, an extensive coverage of corporate and industry related documents. The goal of the Industry Analysis is to determine what the outlook is for primary industry the firm is engaged in. d) Firm Position – you need to document the position of the firm within the context of the industry based on news reports, management discussion as well as analysts’ reports (these are available in the databases made available by University Libraries) from a size / revenue / expansion point of view, i.e., you should be comparing the firm with its closest competitors which you need to name. e) Firm’s Economic Advantages – in view of its current industry position and its abilities to capitalize on industry trends or its incoming inabilities to do so, you should talk about company’s innovations, contracts, business relationships, position vis-à-vis current and projected industry regulatory changes, patent protection situation, … In this section, the analysis need not be too detailed but must emphasize the main economic factors in the current economy. It matters more that you describe the economic activity of the firm and the current climate in the specific industry: orders falling, new technology, consolidation or other important developments affecting the industry. MAIN SOURCES: • Read Chapter 12 in the textbook by Bodie, Kane, and Marcus • You will find management discussions on 10-K filings in the SEC’s EDGAR database (http://www.sec.gov/edgar/searchedgar/companysearch.html). You can enter the company name (or part of it) in the field under “Company Name” and then click ‘‘Search”. Alternatively, you can enter the ticker symbol in the field under “Fast Search” and then click ‘‘Search”. After that, enter 10-K (using a dash between the 10 and the K) in the ”Form Type” box to filter your results. • Find background information about the company and industry and the important events that occurred over the period of your historical financial analysis, • OTHER SUGGESTED SOURCES: • Federal Reserve’s Beige Book @ http://www.federalreserve.gov/FOMC/BeigeBook/ • Survey of Current Business @ http://www.bea.gov/scb/index.htm • FreeLunch.com @ http://www.economy.com/freelunch/default.asp • Websites for the selected firm and other financial-related sites (e.g. MoneyCentral.com, Bloomberg.com, Reuters.com, etc.)