-
Essay / Student Managed Investment Fund Rebalancing
Question 1: The company assigned to me was Exelixis Inc. The organization is a small-cap growth company in the healthcare industry and should underperform the market over the next six years. very high risk months (http://www.investing.money.msn.com). Based on this stock's value line report, short-term gains are achievable. Having a Technical Score of 2, which was raised recently, Exelixis Inc. is likely to see growth in the near term. However, in the long term, this stock performs poorly with a 4 news rating. This rating is likely related to the significant decline the stock suffered in 2000. The stock price peaked at $47.50 and fell dramatically to around $11.00 that same year. Since then, the stock price has yet to reach the heights it once had. This lack of increase is likely the reason for the low technical and safety scores. The safety rating itself is 5, meaning the stock is as risky as any stock. Exelixis Inc. also has a heavily debt-weighted capital structure. The debt is probably necessary due to their poor financial situation, but in ten years it would make sense to have a larger capital structure to be elsewhere. Additionally, cash flow per share has not been consistent. This likely means that Exelsis Inc. is not using debt to grow but simply to maintain operational expenses. Earnings and earnings per share have also fluctuated significantly, which could potentially mean that the organization does not have an effective business strategy and/or product line. There are articles online that discuss the benefits of buying Exelixis Inc. at this time, given how low a price poi...... middle of paper ...... hangs at a low value and makes even more money when the value of these securities appreciates. Having the chance to hear Tyler, Martha and Doug talk about their investment strategies and opinions was a fantastic experience. Each individual brought to the class their own view of the financial markets and how best to move forward with rebalancing the Student Managed Investment Fund. Works Cited • David Swensen Insight. (nd). Overview by David Swensen. Retrieved April 15, 2014 from http://david-swensen.comPiper says it's time to buy Exelixis stock. (nd). Yahoo Finance. Retrieved April 15, 2014 from http://finance.yahoo.com/news/piper-says-time-buy-shares-101803604.html• Value Line - The most trusted name in investment research. (nd). Value Line - The most trusted name in investment research. Accessed April 15, 2014 from http://www.valueline.com