Author: kkb5847

As I sit down to write this final blog, all I can think about is that first post from all those months ago. The point of this blog was to offer some insight into a topic that I find quite interesting and to hopefully open your eyes into something you’ve never looked at before. Having chosen to continue this blog into the second semester, I was given the opportunity to see a larger sample size of time so that these analyses that we have done can hold more weight.

Before we dive into the individual stocks that we looked at, I would like to take the time to talk about the market as a whole. Through these 8 months or so, we nearly saw a complete meltdown of a number of banks, which experts predicted would tank the stock market as a whole. Despite all of this, many of the larger index funds have seen growth over the past few weeks, with the S&P 500 almost returning back to its share price that was seen at the beginning of this blog. Rather than looking at the bad, I am choosing to take you all back to my best picks of the year.

Our biggest riser of the year was quite a large one. Boeing was analyzed on the 13th of October and has done nothing but impress since. At that time, it was trading for around $133 a share, today it sits at just over $210 a share. This is an increase of 58%. That is outrageous. A good year on the market sees a 10% growth. Boeing nearly double any of the other companies that we looked at, in terms of growth. It was by far the biggest home run that was hit with this blog.

Coming in as the second largest earner was Sony. It was analyzed just two weeks after Boeing, making that two week stretch the strongest of this blog. Sony has grown by 30% since the end of October.

Now not all of our companies have grown like the two above. The other companies range from right around 10% growth, all the way down to a 35% loss on Big Lots. I don’t know of any other tell tale sign of the stock market. Sometimes you are going to guess right and win big, other times you are going to guess wrong and lose a lot of money.

Despite all of the ups and down of the companies we analyzed, we still saw growth of near 5%. With a few more companies going green rather than red, that number could be much higher. Looking back at the companies we analyzed, all I can think about is how well I fell that we did. I hope that you learned something along the way, and that maybe you listened on Boeing and made some money from it as well.

Following the past few weeks of a few different posts, this week will be a true turn to what this blog was built on. We are going to be looking at a company and doing a simple analysis and I will end by giving my thoughts on the matter. Today we will be looking at Wells Fargo. Wells Fargo is one of the biggest names in the financial services in America. Wells Fargo was founded in New York, New York in 1852. They currently have offices all over the world, but they are now run out of San Francisco, with their headquarters residing there.

As always we will begin with the Firm Foundation look at our stock. The P/E ratio of Wells Fargo is currently sitting at 12.15, which is a buy signal as it is below the historical average of 14. The next statistic is the PD multiple, which is currently at 31.1, meaning it is a small sell signal as it is above the historical average of 27. Finally, the yield is currently 3.16%, which is another small sell signal as it is below the historical average of 4.5%. While this isn’t a particularly strong buy or sell signal, Wells Fargo’s current price is down from where it normally sits, so it has the potential to rise in the near future.

Following the Firm Foundation is the Castle in the Air analysis. This is more of a conceptual look at a company as we look at the graph and try to make sense of trends. Like I mentioned above, Wells Fargo is currently trading lower then it normally does. This has led to the formation of trend lines that are downward sloping. The slope doesn’t change any of our analysis, but it does imply a downward trajectory. As always, we will want to keep an eye on where we draw our lines and if it breaches through the upper trend line, it tends to indicate growth in the near future, and vice versa if it goes below the bottom trend line.

As the year has gone on it has become harder and harder to find good companies to offer analysis on, mostly due to the state of the market as a whole. Despite this, we have seen growth from a number of companies that we have covered and I could see this for Wells Fargo as well. With this being the second to last post of the year, I will continue to keep an eye on the companies over the summer and hopefully they will begin to go up as a whole.

For the past two weeks I have decided to take a break from our normal analysis to take a look at some other parts of the market, but that will not continue. For this week’s post, we will be returning to our normal weekly analysis of a randomly selected company and analyzing them in two different ways.

However, we won’t be straying too far from our post last week as I will be choosing to analyze one of the banks that were involved in the banking crisis, First Republic Bank (FRC). First Republic Bank was founded in 1985 and is currently headquartered in San Francisco. They have spent a lot of the recent weeks in the news as they are in some turmoil as the fear of them going under began to surface. They avoided complete catastrophe, like the rest of the market, and have seen some rebound since.

We will begin as always with Firm Foundation. As a refresher, Firm Foundation is an analytical analysis in which we look at three different statistics, the Price to Earnings Ratio, the Price to Dividends Multiple, and the Yield. The P/E ratio for First Republic Bank is currently quite low, sitting at 2.63, far below the historic average of 14. The reason why I chose this company was not due to their strong Firm Foundation, but more due to their interesting drop in price and their connection to the recent banking crisis. With that in mind, First Republic Bank does not currently have a PD Multiple or a yield.

Now we move onto a more conceptual way of analysis, Castle in the Air. Castle in the Air is built on finding patterns in the graph of the company and making predictions based on historic trends. The graph for First Republic Bank is an interesting one to say the least. Not even a month ago the stock was trading at a price north of $120, in contrast to it sitting now at below $13. Like I stated above, this was less about analyzing the company and more above bringing light to an unusual situation. There are hints of trend lines forming, but given its recent past, I wouldn’t put too much weight into them.

I am going to be honest and say that I don’t know what to make of a company that is in this state. They have recently seen an event that nearly shut them down and saw their stock price fall by over 75%. All of that being said they are still open for business. There is a possibility that they can return to their old price and put all of this behind them, which would be a great opportunity to make profit, or they could simply keep going down. I believe that the latter is more likely, but they have had a few good days since the fall.

Normally following the recap that we discussed last week would come another analysis, but given the recent events of the last week, I feel that our attention would be best suited focusing on this. If you don’t know, a bank in the Silicon Valley went under at the end of last week, causing a panic in its customers, which would have led to a run on the bank had it not been for intervention by the government. Many of the bank’s customers were that of small businesses, meaning that they had large amounts of funds in the bank. After the Great Depression, a system was set in place so that any funds in a bank that went under, up to $250,000, were covered by the government, a type of insurance.

According to his TikTok account, Rep Jeff Jackson of North Carolina, there was a zoom call of a large number of high officials in the government that stepped in to stop this panic and to stop the run on the bank all together. When the banks began to go under, it kept going until intervention had been enacted, and in that time it had grown to be the second largest bank failure in US history, only behind that of Black Thursday. After the fall of the first bank, the news spread of the uncertainty, which led to many other small banks seeing their customers with draw their money and put them into larger banks. The ultimate end to this is that the banks are being held responsible to cover all of the money in the left over accounts, no matter the balance, rather than the government stepping in and covering the $250,000 maximum discussed above.

@jeffjacksonnc

Rep. Jeff Jackson (NC): Stopping a bank run #fyp #nc #charlotte #raleigh #greensboro #asheville #durham

♬ original sound – Jeff Jackson

All of that being said, the economy is still in a rough place even without the run on these banks. For the past few months or so, the US has been in a rather large period of high inflation. The government stepped in to combat this and to try and lower the inflation as to slow down the economic decline. This backfired however, as we are now beginning to see deflation. There have been 4 instances in American history where the money supply has shrunken, all three of which correspond to recessions, the most noticeable of which was the Great Depression. Now we haven’t reached the level of the Great Depression, as that saw 25% unemployment and a 12% decrease in money supply growth, we are currently at 2%. That 2% is in line with the other 3 large depressions during the late 19th and early 20th centuries, making this the 5th instance.

With hindsight being 20/20, it is not hard to assume that we are going to fall into some sort of recession, which would be coupled with a rise in unemployment most likely. All of that being said, the government did step in and has put measures in place to avoid recessions and depressions like the past, so the future is still uncertain, but it could have been far worse without the intervention.

https://www.nytimes.com/2023/03/14/us/politics/inside-silicon-valley-bank-rescue.html

To wrap up the first half of the semester, I am choosing to take a look back at our analyses from the past two months or so. I am going to include some of the better performers from the last semester as well to provide some longer term examples as well. While many of the recent companies have been down since we have looked at them, there are a few things to consider. First, these are long term analysis, and second the market as a whole has been down recently.

We will begin with the top performers of last semester. The shining star of last semester is by far Boeing. I originally pitched Boeing at a share price of $133.15, since then it has only continued to rise. It has increased by a staggering 55.65%, which is outstanding. It is quite the drop off until the next company, and yet the next one is still quite impressive in its own right. The second greatest earner is Sony, seeing an increase in share price of just over 24%. With the average index fund returning 10% on a slightly above average year, these numbers are outstanding as they are running laps around this figure.

This semester hasn’t been quite as lucrative as the past. So far this semester, we have covered 4 companies, and 1 of the companies is up, 2 are down, and 1 has seen no change. The company that has seen no change is Cisco. Looking back at the analysis, this is not that surprising as all of the Firm Foundation statistics were not far off of the historical averages. I would still keep an eye on it going forward though. The lone company that has increased is Lazard. This was the company that I had never heard of but offered a very strong Firm Foundation and was the first instance of Castle in the Air where we saw the formation of a head and shoulders pattern. Finally the two companies that have gone down are U-Haul and Nokia. As for U-Haul it has only been a week so there isn’t much to say here. We simply need to give it more time. As for Nokia, it has seen a very small dip of 1.2%, which is quite arbitrary for the time period.

All together, we hit two home runs in the first semester with Boeing and Sony, while many of the others have been quite average. This second semester has been riddled with ups and downs with the market as a whole, so it is not surprising to see an almost even split with growth and regression. Following spring break, we will get right back to our weekly analysis, but I hope this offered some insight into the results of our analysis.

The past week for the market as a whole has been a bad one. The main market index funds have seen quite the dip, especially compared to the few weeks prior. The S&P 500 has dipped 2% while the Nasdaq has seen a similar fall. This comes after a rise of near 3.5% from the end of January. It would seem that we are starting to feel the effects of the inflation again.

That being said, this week is going to be business as usual when it comes to our analysis. The past few weeks we have taken a look at various companies that have to do with telecommunications, so this week I decided to change it up a bit and stay away from the sector. This week I chose to analyze U-Haul (UHAL). U-Haul is a moving company that offers rental trucks and storage for people moving across the country. U-Haul is an American based company that was founded in 1945 in Ridgefield, Washington.

As always, we will begin by taking a more analytical approach with our Firm Foundation analysis. U-Haul is interesting in that we only have access to one of our key statistics. The one that we have access to is the P/E ratio. U-Haul’s ratio is currently at 14.23, which is right in line with the historical average. U-Haul isn’t currently paying any dividends, which makes them not have a yield as well. This could be due to a number of reasons, the two most common being that they either aren’t making money, or they are reinvesting all of their profit back into the company rather than paying it out to their stakeholders.

Now onto the Castle in the Air analysis. Similar to last week, you could come to 2 conclusions while looking at the graph of U-Haul. There seems to be the beginnings of a head and shoulder pattern again, or you could draw trend lines as usual. The head and shoulders pattern is more telling of future growth, but we will have to wait and see if it will fully develop. As always with trend lines, it could go either way as it is just as likely for it to break through the upper or lower line.

Given the state of the market as a whole, I am not too confident with any of the companies that I recommend these days. However, now would be a time to invest into an index fund if you are willing to let it ride out for a long time. Being that the prices are down, you could buy in and wait for them to rise. This approach is safer, but also less likely to boom like an individual company would.

As the weeks pass I am finding it harder and harder to find good companies that we have not covered before. I have resorted to typing in random letters and seeing what comes up and this week it paid off.

This week we will be looking at Lazard Ltd (LAZ). Lazard is a financial advisory and asset management firm, essentially they do what I am doing here. They were founded in 1848 and have headquarters based in New York, Paris, and London. They deal with primarily institutional clients and are the largest independent investment bank in the world.

Now onto our analysis, beginning with Firm Foundation. This may take the spot as the strongest Firm Foundation company that we have looked at yet. All three of the key statistics fall into the category of a buy signal, thus making Lazard a strong buy. First we will begin with the P/E ratio, which is currently at 10.6, which is below the historical average of 14. Next the PD multiple, which is currently at 18.6, again which is below the historical average, but this time of 27. Finally the yield, which is comfortably above the historical average of 4.5%, currently sitting at 5.28%.

Now onto the Castle in the Air portion of our analysis. The current graph for Lazard is offering two different interpretations at the current moment. There were trend lines that were formed between the end of October, 2022, and the middle of January, 2023. The graph burst through the upper trend line and continued to grow until the beginning of February. Secondly, there seems to be the beginning of a head and shoulders pattern. As we have not seen this yet, I will add a further explanation. Head and shoulders is one of the main patterns we look for to try and foresee growth. Essentially, when looking at the graph you see a spike go to a certain point, a shoulder, it falls, rises again but to a higher point, a head, and then falls and repeats a second shoulder. This would be a good place to buy as the end of a head and shoulder pattern tends to indicate future growth.

Lazard seems to be the strongest company that we have analyzed in a long time. It is especially strong due to both of our types of analysis coming to the same conclusion, that of a strong buy. I will be keeping an eye on the share price for the weeks to come and I urge you to do the same as well. Finally, as always I get all of my information from yahoo finance and have added the company to the ever growing spread sheet.

This week was an interesting one when it comes to the stock market. The beginning and end of the week have seen lows while the middle of the week saw a small rally. That being said, the market is still recovering from the past year or so, so a week in the red isn’t the end of the world.

For the analysis this week, I am choosing to look at the telecommunications company Nokia Oyj (NOK). Nokia is a Finnish based company that was founded in 1865 and is still based out of Finland to this day. Similar to last weeks post, they provide services in wireless and cell phone plans. You may know Nokia for their phone that is nearly indestructible. Now onto the analysis itself.

As always, I will begin with Firm Foundation, and just as a reminder Firm Foundation is an analytical approach to predicting what will happen to a stock’s price in the future. To begin we will take a look at the P/E ratio. Nokia’s P/E ratio is 5.84 at the current moment. This is the main reason why I chose to cover Nokia this week. This ratio is far below the historical average of 14 and I find it hard to find anything near this in the market recently, making this a strong buy signal. The second statistic is the PD multiple, which is currently sitting at 58.38, which is far higher than our historical average of 27. Finally, the yield is currently sitting at 1.76%, which again isn’t quite where we want it to be with the historical average of 4.5%. All in all the Firm Foundation isn’t too strong for Nokia despite that outlier of 5.84.

For Castle in the Air, we are going to take a look at the graph of Nokia and look for a pattern. It seems that Nokia has gone through some recent volatility, meaning that its price seems to jump up and down without much warning. Despite this I can still see the inklings of two trend lines forming with the current price being in the middle of them. This currently isn’t a strong sign in either direction, but it is something to keep an eye on.

I had an interesting conversation this week in regards to the stock market. It was brought to my attention that the price of gold tends to rise as the stock market goes into a recession. I looked at the graph for the two and it seems to hold true. Gold prices have began to rise recently which isn’t a good sign for the months to come. With that, this analysis is going to become a little weaker as I won’t be too sure with the future of some of the companies we analyze. Hopefully, in the coming weeks I can find some lights in a dark time.

And as always, the spread sheet.

Coming into the new year, it can be hard to tell what is going to happen with the stock market. With inflation still posing a problem to much of America, the stock market is still showing signs that it is still in recovery. The year 2022 saw drastic highs and very low lows. Coming into the year, the S&P 500 was at its all time high at just over $4700 a share. That number fell to its year low in the middle of October at $3500 a share. The final two months of the year saw growth, which is a good sign going into 2023, and so far 2023 has shown nothing but improvement. Now with that out of the way, we can move onto our analysis of an individual company.

For this analysis I am choosing to do Cisco Systems. They are an American based tech company that wireless throughout the country. The ticker symbol for Cisco is CSCO.

Our first form of analysis will be in Firm Foundation, which takes an analytical approach to a stock. We will be looking at three key statistics to make a prediction about future growth. The first of these is the P/E ratio, or the price to earnings ratio. All three can be found on Yahoo Finance. The P/E ratio for Cisco is currently sitting at 17.81, which is slightly higher than the historical average of 14. The next of these statistic we are going to be looking at is the PD multiple, which is the price divided by the dividends. For Cisco, the PD multiple is currently 32.45, which again is higher than we would like it to be, with an historical average of 27. The final statistic we will look at is the yield, which is how much income a stock generates when compared to the price. The yield for Cisco is 3.13%, which is lower than the historical average of 4.5%. While none of our three key statistics are exactly where we would like them to be, they are all around there, which is a good sign.

For the second half of this analysis, we will be looking at Castle in the Air, or looking at the graph of the stock to look for a trend. When looking at the graph for Cisco, I see two trend lines forming and it seems that it is about to breach through the upper trend line, which is a very good buy signal.

Cisco may have a weak Firm Foundation analysis with all three of our statistics coming in just off of what we would like, but the Castle in the Air is really strong. Overall I would keep an eye on Cisco to go up in the near future and hopefully continue to rise for awhile.

Here is the link to the spread sheet again.

Coming into the second semester of the year, I am choosing to keep the same topic as I covered in the first semester. There are a few reasons in that decision, the main of which is that for an analysis of the stock market to be considered thorough, you have to allow time for the stocks to ‘marinate’. Having another few months to continue to analyze the stock market gives both me and the reader the ability to see the analysis come to fruition. Another big reason being simply that I enjoy sitting down every week and writing this.

In this first post I am going to go briefly over what we covered in the first semester and offer an update on the stocks that we looked at in the past. If there is something that you don’t understand that I go over in this post, there are posts available that cover the key concepts in more depth.

In future posts I will be using two different forms of analysis, Firm Foundation and Castle in the Air. Firm Foundation is more of an analytical look into stocks as we look at a number of factors to make a judgement on the future of the stock. There are three key statistics that we look at, all of which we then compare to historic averages. The first of these is the Price to Earnings ratio, or simply the P/E ratio. For this ratio we are looking for anything under 14. The next of our statistics is the Price to Dividends multiple, or simply the PD multiple. The PD multiple is historically around 27, so we are looking for anything below that. Finally, the third statistic is the yield, which we are looking to be above the historic average of 4.5%. All of these are found on the Yahoo Finance page for each individual company.

The second of type of analysis that I will be using is called Castle in the Air. The idea behind this is finding patterns in the graphs of the companies themselves. This is done by seeing specific tells as to what could happen in the future. The nitty gritty of this was covered in a former post, so for simplicity sake, I will keep this one short and simple.

Finally, I have put together an Excel spreadsheet with the stocks from last semester and some other stocks that I found interest in. Here is the link to the spreadsheet Stocks.xlsx. It is programmed to update automatically and I will continue to update it throughout the semester.