Investing in the stock market Investing in the stock market Introduction Investing in the stock market may be profitable as well as loss bringing, depending on the stocks that a client chooses to invest in. Past financial information is used to analyse the performance of a company thereby predicting its future financial position. In so doing, an investor will be able to predict the expected price of the company’s stock in the near future thereby making good investment decisions. Only stock in an IPO may be tricky to predict a future price; however, the financial report of the firm will help predict.
The following three companies are listed on the NYSE and are potential investment destination for you. Discussion Nike is a well established company listed in NASDAQ. It is a company that has grown its capital base to greater height through earning profits. It is a brand name recognized worldwide increasing the value of its stock through wide market coverage. An analysis of its past financial report shows a positive trend in the profit the firm has earned over the past years.
The firms net income has grown steadily from 2133.0 million US dollars in May 2011 to 2693.0 US Dollars in may 2014 (Business week, 2014). The firm has also seen a reduction in the amount of revenue spent on production thereby increasing its profit margin. An analysis of the share price of Nike shares on NASDAQ also shows an upward trend in the price of the shares. The prices of the shares have been rising steadily as visible in the record of the day’s trading (NASDAQ, 2014). Moreover, the volume of the stock traded on a daily basis is substantial indicating a lively company with the potential of higher stock price caused by demand.
Therefore, Nike is a viable potential investment destination. Nokia is another potential investment destination for you. This is a company that has its shares listed in the NYSE and NASDAQ. Though in the past Nokia was an economic giant, it faced a major challenge of counterfeit products in the recent few years. However, the firm’s management has regained total control over the challenge and is working towards eliminating counterfeit goods with positive changes observable already. The financial report of Nokia has indication of an upcoming company with the company’s net income increase from last year’s income (NASDAQ, 2014).
The price of the share is also showing a positive trend with the share price increasing gradually over the days. The main reason for recommending Nokia is because it was a financial giant that went down for various reasons and is being revived. The share price of its stock had gone down substantially but with the revival of the firm, the prices are going up and are expected to rise further in the near future.
The history of the firm indicates a firm with a bright future if the recent trends are maintained. Bank of America is the third firm that I would recommend for investing in. the bank is a well established institution offering financial services to the American market. The shares of this firm are traded in the NYSE for the public to trade in them. The value of the firm’s shares has been slightly fluctuating but show more stability than shares of competing firms in the industry.
The firm is among the leaders in its industry giving it a competitive advantage over its competitors. Information in the financial statement of the firm indicates a profitable firm with its profit margin increasing over the years (bank of America, 2014). The historical stock chat also shows a firm that its shares are actively being traded and whose value is rising over the years. Going by this information, bank of America is a viable investment from the data point towards a firm that is growing financially. Conclusion Though the three firms have the potential of being good investment opportunities they have strong points and weak points as well.
Nike is a well performing firm in the stock market with its shares showing an upward trend. However, due to increased competition in the market, the firm may experience an unexpected fall in the market share due to competitor’s action. This will come the as a big blow to investors who stand a chance of losing greatly on their investment. Nokia is a firm that is picking up its pieces after a fall and chances of another fall is not that inevitable.
As much as it is showing positive trend, it might as well fall back to the low position as before. Bank of America is also showing a good trend in the stock market. However, the fluctuation of the share price of this firms stock is a risk to investors as the price may fall unexpectedly. The fluctuation will require that the investor be monitoring the share price more frequently to be able to trade at an optimum point that reduce loss.
With this, my most recommended firm to invest in is Nike since the benefits exceed the risk involved. References Bank of America, investor’s relation: annual report and proxy statement, Retrieved on 21 October 2014 from http: //investor. bankofamerica. com/phoenix. zhtml? c=71595&p=irol-reportsannual#fbid=Jy2iNGzucw0 NASDAQ. NASDAQ Company listing. Retrieved on 21 October 2014 from www. nasdaq. com NYSE, NYSE Company listing A-Z, Retrieved on 21 October 2014 from http: //www. advfn. com/nyse/newyorkstockexchange. asp