Joshua Machicado

FIN331
Professor: Jaworski
Stock Portfolio
#1 WHAT WAS YOUR ORIGINAL PORTFOLIO STRATEGY?
I chose a conservative investment strategy for my portfolio because it
was the most secure way to get a return from my investment. I took many
points in consideration for my strategy:
- Diversification I thought it was the safest way to have better outcome from
the investment. Therefore, I decided to invest my money in different sectors.
My stock sectors cover, Technology, warehouses, Oil, Multinational Software,
Restaurants and Automobile Industry.
- I did not buy stocks from new companies or new technologies. New
companies face many challenges and are usually a risk. They typically do not
pay dividends or have much growth that can affect their bottom line
adversely. All of my stocks came from the most mature companies, such
Chipotle, Amazon, Toyota and Sony
- Stock must have reasonable P/E. The P/E reflects the relative ability of a
company to make money. choose the stock which has the reasonable ration
around 10-20 because the EP represents the number of investment dollars
required to earn for one dollar
- I analyzed their growth for the previous 3 years and made sure that every
stock had at least one year of consistent growth. The graph was very useful
for determining when choose a stock, because it reflects the performance of
company in current period.

#2 LIST ALL STOCK TRANSACTIONS FOR ANY STOCKS THAT WERE/ARE HELD IN
YOUR PORTFOLIO SINCE THE BEGINING OF THE PROJECT.
Company

Return

Costco
(COST)
SAP
SE( SAP)
Adidas (ADS)
British
Petroleum
(BP)
Sony Corp
(SNE)
Chipotle
Mexican
Grill, Inc.
NYSE: CMG
Toyota
Amazon

Company
Chipotle Mexican
Grill

Purchase
Sales Price
Price
10/27/15
(10/17/2015)
5.63
152.5

Ending
Date(11/4/15)
161.09

6.40

74.37

79.13

21.71
-2.90

76.75
34.82

93.41
33.81

-6.93

27.29

25.4

-8.21

715.2

1.82
17.95

123.49
573.15

656.49

125.74
676.01

Date
Selling price price paid
shares
profit or loss
10/27/15
656.49
715.2
40
-2348.4

3 GIVE THE REASONS WHY YOU TOOK YOUR INITIAL POSITION IN YOUR STOCKS.
YOU NEED TO GO THROUGH THIS EXERCISE FOR EIGHT (8) STOCKS. SEPERATE
EACH STOCK INTO A UNIQUE PARAGRAPH.
I invested in Costco because I noticed that a lot of customers seem
more than pleased with Costco's smart business strategy and customercentric focus. They have been doing very

well

during the last

past 6

months . The company has strengths in multiple areas, such as its revenue
growth, growth in earnings per share with a current EPS of 5,41 and notable
return on equity and good cash. Their sales during the 16-week period ended
on August 30 grew 6% year-over-year, and adjusted sales growth over the
year was an even stronger 7%.
My investment SAP was mainly influence for the fact that Sap has
been dominating the ERP space, and it is getting better by moving into rivals'
territory with the help of its cost-efficient products. The growth was led by a
56% spurt in Cloud Subscriptions and Support Revenue, which touched 1.1
billion in 2014.SAP had an steady growth during the last 2 years and also
they are smartly growing its business by cross-selling its newly-acquired
products to its old customers, SAP is now focusing more on cloud-based
software technology
I thought that the Adidas stock price was very cheap for a top sporting
apparel business. based on its stock price from last year. I believe that there
will be a bigger growth

for the following years based on its EP of 29,08. it

seems that the demand for its products keep increasing with the years.

Furthermore, In the US, Adidas remains the most important sportswear

market by size,
I invested in Sony for the following reasons. Sony has had a forward PE
of just 19.05, which means that investors are paying $19.05 for each dollar
in expected Sony earnings this year. I also took in consideration that they
have impressive record of earnings per share growth of .20 when I bought
the stocks. Somehow, I feet that the strengths and that the capability of
Sony outweigh the fact they have low profits. In addition the website The
Street say that its not bad idea to buy their stick since since their stock
does not reflect significant decrease in their stock price
I Invested in British Petroleum mainly for two reasons. The first, the
primary strengths of the company is its solid financial it had and increase of
almost 6.74 it stock price in Q2 . However, I was aware of the weaknesses
including deteriorating net income, disappointing return on equity and weak
operating cash flow but its a very stable company
I Invested in Chipotle Mexican Grill because is a medium age company
that has a lot of future. Chipotle Mexican Grill's (CMG) revenues grew at
a 20%compound annual growth rate), Over the last 12 months ended
September 30, 2014, the company had revenues of $3.9 billion, which grew
26% year-over-year from $3.1 billion. So, I assumed that they growth is going
to continue because is really popular among a broad range of demographic.
I invested in Toyota Motors because its one of the top competitors in
the automobile industry. The EPS from the company has grown from 6.5 to

11.65 in 3 years which show a constant growth . They have experienced

some decrease in their stock market but its always stable thanks to the size
and experience of the company in the automobile industry. Therefore, I
thought it was a safe investment.
I invested in Amazon because their stock has crushed the market,
outpacing the S&P 500 by more than 28,000% since 1997. Amazon is
company that the revenue has been increasing yearly and reaching different
market such as the electronics market. Therefore, I feel that amazon will is a
good long term investment since they are trying to reach new markets such
as electronics, music and video stream.
#4 CALCULATE THE PORTFOLIO'S OVERALL RETURN (to two decimal places, i.e.
+7.34%).
RETURN = (END VALUE as of December 4 - BEGINNING VALUE) / BEGINNING
VALUE
Please note: The END VALUE will automatically include any dividends you received.
BEGIN VALUE = Cash you had in the account when you began trading.

Company

Costco (COST)
SAP SE( SAP)
Adidas (ADS)
British Petroleum
(BP)
Sony Corp (SNE)
Chipotle Mexican
Grill, Inc.
( CMG )
Toyota (TM)

Purchase
Price

Sales Price
10/27/15

Ending
Date
(12/03/15)

Return

$ 152.5
$ 74.37
$ 76.75
$ 34.82

$ 161.09
$ 79.13
$ 93.41
$ 33.81

5.63%
6.40%
21.71%
-2.90%

$ 27.29
$ 715.2

$ 25.4

-6.93%
-8.21%

$ 125.74

1.82%

$ 123.49

$ 656.49

Amazon (AMZN)

$ 573.15

$ 676.01

17.95%

#5 CALCULATE PORTFOLIO's REQUIRED RETURN. For this you need to compute

your ENDING (as of December 4) portfolios beta and its required rate of return (Assume
Rf is 2.75% and the market risk premium is 5%).

Stock
COST
SAP
ADS
BP
SNE
CMG
TM
AMZN
total

Investment value
$22,875
$7,437
$3,070
$1,045
$1,365
$28,608
$11,114
$114,630
$190,143

Beta

Weight
0.8
1.26
0.85
1.34
1.69
0.27
0.56
1.49

Beta* Weight
12.03%
0.096243252

3.91%
1.61%
0.55%
0.72%
15.05%
5.85%
60%
100.00%
Port. Beta

0.04928191
0.013723867
0.007361631
0.012127728
0.040622857
0.032732677
0.898263519
1.1504

2.75% + (5%)(1.1504)
=0.08502*100
Portfolio Required Return = 8.50%
#6 DISCUSS HOW SUCCESSFUL YOUR STRATEY WAS.
My strategy for my stocks was successful. The majority of my stock increased with the
exception of Chipotle which I had to sell it due due to the E.coli problem they are currently
experiencing .I examined my portfolio and sometimes found some issues during my processing:
However, I was always cautious and constantly checked my portfolio in order to to take
decisions depending on the market.
I was always tried to be inform about current events that could have influenced the stock
price of my investments. I tried to learn as much as I could about the stock market and how stock
trading works. I was almost aware aware with relevant information in the U.S. economy and
politics.
I had a solid plan before investing for my portfolio. Because, I did a research for every single
investment that I made by checking finance websites such as Yahoo Finance. Probably, that was
one of the main reason why my portfolio had positive established investment strategy.
#7 WHAT WOULD YOU CHANGE IN YOUR STRATEGY IF YOU COULD?

If I take this assignment again, I will change some of my strategies based on my return profit.
Reduce money invested in Restaurants. I lost money investing in restaurant I did not take quick
action when I found out about the E.coli problem with Chipotle . Next time I will try to act fast
and analyze the different outcomes.
I did not diversify my portfolio enough. I invested a large amount of money in amazon because
the market was really positive for AMZN stock. It counted for 60% in my portfolio. Which it was
the highest compare to the other ones. The results from that investment

were good the return

from that investment was 17 Percent in only 2 months. However, next time I will try not too put
all my eggs in one basket for economy safety reasons.