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Mary Seacole Stock Performance and Recommendation Report

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MARY SEACOLE STOCK PERFORMANCE AND RECOMMENDATION REPORT

Prepared for
Mary Seacole
Halifax, Nova Scotia

Prepared by
Kieren Yu
Financial Analyst Assistant
Melmoth Financial Group
Halifax, Nova Scotia

December 3, 2018


TABLE OF CONTENTS

Page

EXECUTIVE SUMMARY        4

INTRODUCTION        5

Purpose        5

Scope & Limitations        5

Background        5

Methods        5

Key Terms        6

FINDINGS & DISCUSSION        6

Industrials        8

Air Canada (AC.B)        8

Bombardier Inc. CI B (BBD.B)        9

WestJet Airlines Ltd. (WJA)        9

Telecommunications        9

BCE Inc. (BCE)        10

Rogers Communications Inc. (RCI.B)        10

TELUS Corp. (T)        11

CONCLUSIONS        11

RECOMMENDATIONS        12

REFERENCES        13

LIST OF ILLUSTRATIONS

TABLES

  1. Weekly Values of Mary Seacole’s Stock and of the S&P/TSX Composite Index        7

FIGUES

  1. Weekly % Change of Mary Seacole's Total Portfolio Value vs. Weekly % Change of the S&P/TSX Composite Index        7

  1. Weekly % Change of Mary Seacole's Total Industrials Value vs. Weekly % Change of the S&P/TSX Composite Index        8

  1. Weekly % Change of Mary Seacole's Total Telecommunications Value vs. Weekly % Change of the S&P/TSX Composite Index        10

EXECUTIVE SUMMARY

This analytical report is to summarize Mary Seacole’s portfolio performance, inform her of the industry and company news associated with the portfolio, and offer her effective recommendation on the additional 200-share investment. With our continuous researches about Seacole’s portfolio, some findings are accumulated in order for Seacole to make final decisions about her future 200 shares investment.

Key Findings

Over the course between September 18 and November 6, there was a recession in the market, as the downward-sloping tendency in the S&P/TSX Composite Index shows.

Industrials performed much worse than telecommunications. The eight-week period witnessed drastic decreases by 31.19% and 6.09% in stock prices of Bombardier and WestJet respectively. Compared with industrials, telecommunications stocks displayed milder declines: the stock price of TELUS fell by 7.49%; BCE Inc.’s price surprisingly increased by 2.03%, and that of Rogers only dropped by 2.96%.

It is noticeable that Air Canada, Bombardier, and TELUS shared a pretty similar downward trend—their prices all fell continuously over the period in spite of a few recoveries. However, the pattern was different with WestJet and BCE whose prices fluctuated. As for Rogers Communications, its share price suddenly declined to only $65.31 on October 2. Nevertheless, it experienced a gradual recovery to $67.95 at the end of the period.

Conclusions

The Industrials sector was highly affected by the market dynamics, while the telecommunications industry was less sensitive to market changes. That is to say, facing the rising costs of raw materials including petroleum triggered by the international trade disputes, Air Canada, WestJet, and Bombardier’s share prices went down. However, trade turmoil did not shock telecommunications too much because of the technological revolution in the industry, namely the research and development of 5G made the industry more prosperous.

Recommendations

  • More shares of telecommunications should be purchased, because of the lower risks and expected long-term growth

  • More shares of Bombardier should be invested. Its share price was overestimated, though it is the most money-losing stock in the portfolio

  • For portfolio diversification, other industries should be considered for buying as additional investment

MARY SEACOLE STOCK PERFORMANCE AND RECOMMENDATION REPORT

At the request of Ms. Mary Seacole and on behalf of Melmoth Financial Group, this analytical report evaluates the historical performance of Mary Seacole’s portfolio, which includes six stocks: Air Canada, Bombardier Inc. CI B, and WestJet Airlines Ltd. from industrials as well as BCE Inc., Rogers Communication Inc., and TELUS Corp. from telecommunications.

In accordance with Ms. Mary Seacole’s request to invest 200 shares more on her portfolio, this report is created to provide Ms. Seacole with details of the eight-week performance of her portfolio and a professional analysis of each stock’s fluctuation. It also gives Ms. Seacole recommendations on which stock to invest it further, on the basis of dependable information of relevant industries.

Scope and Limitations

The ups and downs of share price, to a great extent, rely on investors’ expectations towards the broad market, industries, and companies. “There is no way to predict the price of stocks and bonds over the next few days or weeks” (“The Prize in Economic,” 2013, para. 1). Ms. Seacole’s portfolio was monitored for only eight weeks. Therefore, the overall performance of each stock and the S&P/TSX Composite Index cannot be fully assessed in spite of some reliable industrial news and information as references. Furthermore, press releases are usually regarded as indicators to predict a long-term fluctuation of stocks; therefore, some errors might appear if using this method to forecast short-term price variations.

Background

Mary Seacole became Melmoth Financial Group’s client in September this year and authorized Melmoth Financial Group to purchase 600 shares of stock for her. Based on Seacole’s requirement, six stocks were purchased on September 18, 2018. As her investment advisor, I recorded these stocks’ performance over the eight-week period (from September 18 to November 6) and conducted research aiming at her portfolio. On November 7, Ms. Seacole intended to increase her investment by 200 shares and asked for recommendations on her follow-on investment.

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