Cornering the
Information Market |
Market Analyst
Technical and Professional Communications 12 |
Lesson Idea by: Heather Leask, School District #83
(North Okanagan-Shuswap)
In a world as hectic and fast-paced as an investment house, communication is critical. Financial markets can change in a second, so it's essential for investment houses to be on top of every development.
When you think of getting good investment advice, you may think of going to a stockbroker. Where do stockbrokers get their information? From various sources, including the people who work as market analysts.
Market analysts use a variety of methods to get their information to the stockbrokers. Conference calls and meetings in crowded boardrooms are a way of life. In these meetings, market analysts provide a flood of documents, including handouts and written reports. Many investment houses also provide a monthly newsletter.
Market analysts spend a lot of time researching the market and following the performance of various companies. They receive data from a multitude of different sources, including newspapers and the Internet.
They also rely on industry tools that provide financial statistics and ratios on individual companies. One such tool used by the B.C. investment house Odlum Brown Inc., is a service supplied by Bloomberg, a company based in New York. Subscribers to the service receive extensive information on companies over a PC terminal. The cost is about $1,200 US a month, a price that prohibits most individuals from subscribing.
You're a market analyst for a large investment firm, and one of your stockbrokers has requested information about Intel Corporation.
Using what resources you have available, research the Intel Corporation and find the answers to these questions:
1. What were the company's net revenues in 1996, and how does that compare with the 1995 figures?
2. What were the earnings per share in 1996 versus 1995?
3. At the end of 1996, what was the total cash investments, short-term investments and long-term investments?
4. What was the return on average stockholders' equity in 1996 as compared with 1995?
5. How much did the company spend in research and development in 1996?
6. What was the geographic breakdown of revenues in 1996?
7. On what market is Intel's Common Stock traded?
8. What is Intel's stock ticker number?
9. Which independent auditors does Intel use?
10. Today, what is a share of Intel's stock trading for?
11. Over the past 52-week period, what is the high and low range for Intel stock?
12. As of today, are most stockbrokers recommending to buy, sell or hold Intel stock?
13. Your client wants a copy of Intel's annual report. How does the client get a personal copy?
14. Who is the president and chief executive officer of Intel Corporation?
Break into groups and discuss the following:
- The terms used in the questions above. What do these terms mean?
- Why would a market analyst need the answers to such questions?
- How would the market analyst use the information?
- Is the answer to every question equally important?
Now brainstorm where you could find answers to the questions.
What did you come up with? Did you think of looking in the financial section of newspapers, business magazines, libraries, the Internet, calling an investment firm or contacting the Intel Corporation? What are the most reasonable sources of information for this exercise?
Break the class into a number of groups equal to the number of reasonable sources of information. Assign each group to one of the sources. Each group must find the answers to the questions using only the source assigned to it. For example, the newspaper group may use only newspapers to research their answers.
Note that there may be quite a difference in the amount of time needed to complete this exercise, depending upon the resource used. As well as answering the questions, keep a log of your research activities. It should indicate what you did to try to find answers and how much time you spent on it.
Once every group has completed the assignment, have a series of class presentations. Each group should present answers to all the questions and a description of its activities. Share your insights into what worked, what didn't work and how long it took to do the research.
Create a chart that summarizes the results of each group. As a class, discuss the findings. First, discuss what makes a source of information effective. Is it effective because it is:
accurate?
complete?
cheap to use?
fast?
reliable?
or some combination of the above?
Were some sources better suited to providing different sorts of information?
As a class, brainstorm a list of research activities, preferably ones you are interested in pursuing for a formal report you will be writing throughout Technical and Professional Communications 12.
Now, independently:
1. Pick 10 research activities from the list. Make sure one is your own research idea.
2. For each activity make a list of appropriate research sources and place an asterisk beside the two you believe will be the most efficient.
3. For your own research activity, explain why your two preferred research sources are more efficient than the others. Keep this explanation to a paragraph or two in length.
Assessment
Evaluate student performance based on the following criteria:
- can identify several appropriate sources for each research activity
- discriminates between sources, that is, the same list should not appear for all activities
- understands that "efficient" has different meanings for different people in different circumstances
- can make reasonable judgments about what sources may be more efficient than others
- can explain their reasoning in a clear, concise, well-organized way.
| Course/Grade: Technical and Professional Communications 12 |
Curriculum Organizer(s):
Reading Viewing and Listening (Research 1 and 2) |
Curriculum Sub-organizer(s):
employ a variety of research tools and resources including Internet services, library cataloging systems and experts. Independently compile information and ideas from print and computer-based sources. Determine when research is required and devise strategies to conduct it. |
Prerequisites:
None |
Resources:
Internet access; access to community resources like library and individuals.
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Solution to Practice
The Internet is a vast storehouse of information for many market analysts.
"I have people here who do a lot of research on the Internet," says market analyst Murray Leith. "You can get a company's financial statement, annual reports, and quarterly reports off the Internet. We generally will get hold of those documents that the company has to file every year or quarter and we read them."
For this exercise, the answers were obtained from Intel Corporation's Web site www.intel.com and from Yahoo! Finance quote.yahoo.com/.
Similar information could have been obtained through the public library, newspapers, investment firms or from the corporation itself.
1. In 1996, the company's net revenues were $20 billion, compared with $16 billion in 1995.
2. Earnings per share in 1996 were $5.81, compared with $4.03 in 1995.
3. At the end of 1996, total cash and short- and long-term investments totalled $9.3 billion.
4. In 1996, the return on average stockholders' equity was 35.6 per cent, compared with 33.3 per cent in 1995.
5. In 1996, Intel spent $1.8 billion on research and development.
6. The geographic breakdown of revenues for 1996 is as follows:
42% North America
28% Europe
18% Asia Pacific
12% Japan
7. Intel's Common Stock is traded on the NASDAQ Stock Market.
8. Intel's stock ticker number, or symbol, is INTC.
9. Intel's independent auditors are Ernst and Young LLP of San Jose, California.
10. At the time of this writing, a share of Intel's stock was trading for 94 7/8.
11. Over the past 52-week period, at the time of this writing, the stock ranged from 49 9/16 to 102 per share.
12. At this writing, the majority of stockbrokers were strongly recommending to buy Intel stock.
13. Intel's annual report can be obtained at Barron's Annual Reporting and Earnings Service or by calling 1-800-965-2929.
14. Dr. Andrew S. Grove is Intel's President and CEO. |
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