Security Analysis of Fmcg Sector
ANALYSIS :-
In this era of high volatility in markets, investors look at several parameters before investing in stocks for example EPS, earning growth rate, debt/equity , p/e ratios. These parameters will no doubt help us to select the best companies but beta is one such parameter which can tell us about the returns with the volatility of a particular stock with respect to market.
The concept of beta is actually very simple - it 's a measure of individual stock risk relative to the overall stock market risk. Beta analysis can provide great insights into the movements of a particular stock relative to market movements
Before investing in a company 's stock, the beta analysis allows an investor to understand if the price of that security has been more or less volatile than the market itself.
In our assignment we have worked on five companies ITC, Dabur,HUL, Nestle, and Britannia and calculated Rate of Return(%), Standard Deviation and Beta value. Result of calculation is below:-
PERIOD RATE OF RETURN(%)
HUL ITC DABUR BRITANNIA NESTLE NSE(STOCK)
Boom period
(2003-2008)*
Recession
(2008-2009)*
Recovery(may 2009 onwards)*
Expected rate of return(%) 0.007 2.148 2.34 0.176 0.072 0.624 0.002 0.033 1.15 0.013 0 1.340
0.004 4.211 4.27 0.003 -0.127 1.82
0.013 6.392 7.76 0.0192 -0.055 3.784 STANDARD DEVIATION (%)
Boom period
Recession
Recovery
0.087 8.38 11.32 0.070 0.450 7.34 0.084 7.69 11.63 0.122
In this era of high volatility in markets, investors look at several parameters before investing in stocks for example EPS, earning growth rate, debt/equity , p/e ratios. These parameters will no doubt help us to select the best companies but beta is one such parameter which can tell us about the returns with the volatility of a particular stock with respect to market.
The concept of beta is actually very simple - it 's a measure of individual stock risk relative to the overall stock market risk. Beta analysis can provide great insights into the movements of a particular stock relative to market movements
Before investing in a company 's stock, the beta analysis allows an investor to understand if the price of that security has been more or less volatile than the market itself.
In our assignment we have worked on five companies ITC, Dabur,HUL, Nestle, and Britannia and calculated Rate of Return(%), Standard Deviation and Beta value. Result of calculation is below:-
PERIOD RATE OF RETURN(%)
HUL ITC DABUR BRITANNIA NESTLE NSE(STOCK)
Boom period
(2003-2008)*
Recession
(2008-2009)*
Recovery(may 2009 onwards)*
Expected rate of return(%) 0.007 2.148 2.34 0.176 0.072 0.624 0.002 0.033 1.15 0.013 0 1.340
0.004 4.211 4.27 0.003 -0.127 1.82
0.013 6.392 7.76 0.0192 -0.055 3.784 STANDARD DEVIATION (%)
Boom period
Recession
Recovery
0.087 8.38 11.32 0.070 0.450 7.34 0.084 7.69 11.63 0.122