摘要:The financial risk and operation risk of Qantas was increased in 2009 and the growth rate of its share price is still negative. There is no obvious signs that performance of Qantas will be largely improved this year. BHP, by contraries, is increasing steadily and BHP has strong profitability because of its status in the industry.
Report on security analysis
Executive Summary
Security analysis is the fundamental for creating a reasonable and profitable investment portfolio. And share price analysis is the first step of security analysis. This report will describe the price trend of four selected shares and investigate the factors impacting the price trend. The dividend and risk of the shares will be analyzed for proper estimate of the future share price. Trend and determination of the Interest rates and exchange rates of Australia will be researched for a better understanding of the economic environment.
1. Introduction
Four companies are selected for the security analysis. They are all giant enterprises in the world. Among them , Qantas Airways Limited (Qantas) is an airline company based in Australia, and BHP Billiton plc(BHP) is an Australian natural resources company. Oracle Corporation (Oracle) is an American enterprise software company. BP p.l.c. (BP) is an international oil and gas company. Australian interest rates of 30 days and 90 days will be described. Exchange rate of the Australian dollar to the US dollar and Chinese RMB will be checked. For the bonds analysis , government bonds of 2 years and 3 years are selected.
2. Security analysis
2.1 Price & dividend
Figure 1-4 shows the price trend of the four companies.
Figure1: price trend of Qantas from 2005 to 2010
Source:《Qantas Airways Limited》,https://www.google.com/finance?q=Qantas
Figure 2: price trend of BHP since 2005
Source:《BHP Billiton Limited》,https://www.google.com/finance?q=ASX%3ABHP
For the two Australian companies, their share price trend has shown significant difference compared with the index of S&P/ASX 200. The share price of Qantas has fluctuated nearly the same with the index of S&P/ASX 200 since 2005, which means that the share performance of Qantas is close to the average level of the Australian stock market. On the contrary, the stock price of BHP has grown more quickly than the index of S&P/ASX 200, fluctuating between 50% and 150% in the last three years.
Figure3: price trend of Oracle between 2005 and 2010
Source:《Oracle Corporation 》,https://www.google.com/finance?q=Oracle
Figure 4: price trend of BP since2005
Source:《BP plc.》,https://www.google.com/finance?q=LON%3ABP
The stock price of Oracle, like that of BHP, has risen steadily since 2005. And it went up more quickly than the index of Nasdaq. It has increased by 123.5% while the index of Nasdaq only 25.05%. BP has seen its share price exceeds the index of FTSE100 from mid-2006 to the third quarter of 2008 and then its share price fluctuated nearly the same with the index.
Figure 5 shows dividends per share of the four companies from 2005 to 2009.
2005 2006 2007 2008 2009
Qantas(cents) 9.35 11.0 20.98 32.23 9.93
BHP(cents) 23.0 32.0 38.5 56.0 82.0
Oracle(cents) - - - - 5.00
BP(cents) 34.85 38.4 42.3 55.05 56.00
Source: Cited form Annual Report of Qantas, 2010,BHP,2010,Oracle,2010,BP,2010
Yakov Amihud& Maurizio Murgia(1997) pointed out that dividend is informative. Martin Feldstein & Jerry Green(1983) said that dividend was often
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