Relative Performance Analysis Paper

Topics: Stock, Bond, Security Pages: 4 (1265 words) Published: October 10, 2008
Relative Performance Analysis PaperUsing the stock market to invest in securities can be risky but with a little research and a carefully thought out investment strategy the road to financial security can be successful. In this paper, Team A will 1) determine the five-year average return for Walt Disney, Wal-Mart, Time Warner, Dell, Motorola, and US Treasury Bonds, 2) identify the industries of each of these six securities, 3) determine the average five-year average return for each industry, 4) identify three additional stocks in each industry and determine the five-year average return for each security, 5) compare the selected securities' performance to those in the same industry and to the industry average, and lastly, Team A will determine whether or not changes will need to be made to our investment portfolio.

Walt DisneyWalt Disney (DIS) belongs to the Media Conglomerates industry. Disney has had its highs and lows but has remained well above its peers in the industry with a five-year average return of 18.62%. The industry average five-year return is 12.32%.

Three industry peers of Walt Disney are Time Warner (TWX), CKX, Inc. (CKXE), and Viacom, Inc. (VIA). Time Warner has experienced a five-year average return of 7.74% which is only slightly higher than CKX, Inc. average five-year return of 7.38%. Viacom, Inc. has not proved as successful in the industry with an average five-year return of 1.94%.

Wal-MartWal-Mart (WMT) is part of the Discount, Variety Stores industry. Wal-Mart's returns have fluctuated greatly over the past five years with an average return of .18%. Wal-Mart still remains above the industry average of -1.98%.

Three industry peers of Wal-Mart include: Target (TGT), Costco (COST), and Family Dollar Stores (FDO). The average five-year return for Target is 12.96% which is much less than Costco with an average five-year return of 21.60%. Family Dollar Stores lags behind in the industry with only an average five-year return of -5.70%....

References: ederal Reserve. (2008). Federal Reserve Statistical Release - Historical Data. RetrievedAugust 17, 2008 from: http://www.federalreserve.gov/releases/h15/data.htmMorningstar. (2008). Industry Peers. Retrieved August 17, 2008 from:http://quicktake.morningstar.com/StockNet/IndustryPeers.aspx?Country=USA&Symbol=QCOMYahoo Finance. (2008). Bonds Center. Retrieved August 11, 2008 from:http://finance.yahoo.com/bondsYahoo Finance. (2008). Motorola, Inc. Historical Prices. Retrieved August 17, 2008 from:http://finance.yahoo.com/q/hp?s=MOT&a=07&b=18&c=2003&d=07&e=18&f=2008&g=d
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