Comment on stock/analyst report - Essay Example

Stock analysis report: al affiliation:  Stock analysis report The report about United Technologies lacks fundamental analysis that can offer insight on the performance of the company and comparison to competitors. The report should include a structural analysis that dictates the organization’s competitors, market environment, and comparative advantage. If the report had done a fundamental analysis, it would be possible to evaluate the stock market price of the organization. The idea is that stock exchange often place the intrinsic value of a stock incorrectly compared to the equilibrium value.

If the report analyzed financial reports of united technologies in correlation with other companies, it would, be possible to determine the market value and compare it to the intrinsic value of the organization. The report offers a fuzzy indication of the real value of the organization’s stock because it vaguely incorporates vital elements used to evaluate it. The factors include; earnings, profit margins, return on equity, price to earnings ratio, and price to book ratio. Investors often look for the earnings per share to assist in making a decision on whether the organization realizes profits in the future.

The earnings per share included are not comparative with leading competitors against United Technologies. Instead, the comparison is on the revenues of competitors alone, which is not sufficient. The non-comparative nature makes it intricate for investors to evaluate long-term returns after purchasing the shares. The profit margins included are over a period, but are not indicative of the net profit margins (New York Stock Exchange, 2015). The non-inclusion of net profit margin makes it intricate to determine the earnings realized upon every dollar of the organization revenue.

The return on equity, price to earnings ratio, and price to book ratio included in the report do not offer comparative analysis. Therefore, it is intricate for an investor to determine whether it is viable to purchase the stocks. The included ratios focus on United Technologies, and comparison offered only relate to the revenue earnings. The necessary information is the determination of the actual value of United Technologies stock and the market value. If the organizations intrinsic value is below the market value, then an investor can purchase the stock and gain profits when the intrinsic value hits the market value.

On the contrast, if the market value is above the intrinsic value, then shareholders should cash out on the stocks and realize profits before the market value reduces to the intrinsic stock value. ReferencesExchange, N. Y. (2015). UNITED TECH NYSE-UTX. New York, NY: Value Line Publishing LLC.