MAF307 – Equities and Investment Analysis - Trimester 2 2021

Assessment Task 2 – Equity Research – Group Assignment

DUE DATE AND TIME: Friday, 17 September 11.59 (AEST)

PERCENTAGE OF FINAL GRADE: 25% (Part A: 15% , Part B: 10%)
WORD COUNT: 3000 words

Description
1). In this assessment students will apply their knowledge of Fundamental Analysis and Equity Valuation to
create an equity research report and also a video presentation of the report. Through this task, students will
critically analyse the strengths, weaknesses of a business and will assess its investment worthiness.
2). Each group of students will produce one Equity Research Report and also create a short video
presentation based on their report. Equity reports should be prepared as formal documents for advising
the clients (i.e. fund managers, investors). The group video presentation should be also prepared as a
formal presentation to convince the investors about your group’s investment ideas in the report.
.

Specific Requirements
Part A: Prepare equity research report for one of the following ASX listed firms.

Table 1.
SL No Code Company
1 ALL Aristocrat Leisure Ltd
2 APT Afterpay Ltd
3 BHP BHP Group Ltd
4 CSL CSL Ltd
5 FMG Fortescue Metals Group Ltd
6 GMG Goodman Group
7 NCM Newcrest Mining Ltd
8 REA REA Group Ltd
9 RIO RIO Tinto Ltd
10 TCL Transurban Group
11 TLS Telstra Corporation Ltd
12 WES Wesfarmers Ltd
13 WOW Woolworths Group Ltd
14 WPL Woodside Petroleum Ltd
15 XRO Xero Ltd
Assessment 3 Part A Description:

Equity analysts prepare equity research reports for investors. In these reports, analysts provide expert opinion
about investment opportunities in companies that they analyzed. These reports also provide clear “buy” or
“sell” recommendation to investors with target equity price. For assessment 3, students should select one of
the stocks listed in Table 1 above and write an in-depth equity analysis. The equity research reports that
student groups are required to prepare for this assessment should at least include following information:

• Basic information about the company: such as - Company name, Industry, stock ticker, market
capitalisation, past 52 weeks price range, P/E, etc.
• Recommendation summary – “Buy” / “Sell” ; Target Price / Price Range
• Analysts’ Details (i.e. details of student group members)
• Report Summary
• Detail Report including -
o Description of the firm’s business activities
o Evaluation of the prospect of the business sector based on macro-economic and industry level
factors
o Analysis of firm’s strategic position in the industry. (use porter 5 forces model, industry life
cycle, and peer group comparison)
o Financial Analysis - Carry out ratio analysis to explain financial health/ strengths/ weaknesses
of the firm. At least past 5 yrs financial history should to be analysed.
o Valuation Analysis– Use valuation models (discounted cash flow and relative valuation
models) discussed in the lectures to find out intrinsic value of the firms. Carry out scenario
analysis for valuation in various market conditions such as pessimistic, normal, optimistic etc.
(Details of the valuation calculations needs to be provided in a Microsoft Excel file for
examination, assumptions of the valuation should be clearly mentioned in the MS Excel file.)
o Risk Factors – Potential risks associated with investing in the firm, industry and market as a
whole.
o Clear Investment Recommendations with explanations.
 Reports should effectively display data using graphs and charts.
 Sources of data and information should be mentioned.
 Report should include a list of references.

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Resources Provided:

In Assessment 3, under Assessment Resources section of unit’s Cloud Deakin site following resources are
provided –

• Examples of equity research reports.

• Documents on equity research process followed by Morning Star and Standard and Poor.
• Documents / Presentations – on essentials of equity research report writing.

Students are encouraged to read, understand and use those resources wisely in their group assessment.

Part B:
Based on your group’s written equity research report, prepare a 5 to 8 minutes video presentation
addressing following:

• Introduce the firm; discuss the investment thesis of your group (i.e. in brief manner discuss the main
reasons why you give a “buy” or “sell” recommendation); What is your group’s recommended target
price & why?
• Analysis of macro-economic factors suggests this firm is (is not) a good investment because…?
• Analysis of the industry dynamics suggests this firm is (is not) a good investment because…?
• Analysis of firms financial performance suggests this firm is (is not) a good investment because…?
• Discuss Valuation Analysis - The stock is overvalued / undervalued / fairly priced because
• Final recommendation for the stock is …

 Each group member should present facing the camera.

 Presentation should be made in a formal and coherent manner.
 Dress code for presentation - Formal.

Learning Outcomes
This task allows you to demonstrate achievement towards the unit learning outcomes. The ULOs are aligned
with specific graduate learning outcomes – that is, the skills and knowledge graduates are expected to have
upon completion of their studies – and this assessment task is an important tool in determining achievement
of those outcomes.
If you do not demonstrate achievement of the unit learning outcomes, you will not be successful in this unit.
It is good practice to familiarise yourself with the ULOs and GLOs as they provide guidance on the
knowledge, understanding and skills you’re expected to demonstrate upon completion of the unit. In this
way they can be used to guide your study.

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 Unit Learning Outcomes (ULO) Graduate Learning Outcomes (GLO)

ULO 3: Evaluate securities using GLO1: Discipline-specific knowledge and capabilities

fundamental analysis GLO2: Communication
GLO3: Digital Literacy
GLO4: Critical thinking

Submission
You are to submit your assignment in the individual Assignment Dropbox in the MAF307 CloudDeakin unit
site on or before the due date.

This is a group assignment, students should complete this assignment in a group of 4 members. No submission
from individual students or small groups will be accepted.

• Students need to create their groups / enroll themselves in their groups – on Cloud Deakin “Group”
section.

• Assessment 3 submission date is Friday, 17 September 11.59 (AEST).

Part A:

• The assignment should be submitted electronically though the Cloud Deakin Group Assessment
Dropbox. No hardcopy assignment submission required/accepted.

• Groups need to provide the data used for preparing the report along with the calculations.

• Each group should submit 1 MS-Word file for the written report, 1 MS-Excel file for data, valuation
models / calculations.

Part B:

• Group should upload the video presentation on Deakin Air platform and submit the group video
presentation link on the Cloud Deakin Group Assessment Dropbox, using the template provide on
Assessment 3 section.

Each group should upload only one copy of the assessment files on Cloud Deakin Group Assessment Drop Box.
Please take care before uploading final assessment. If multiple copies of the assessment are submitted
markers may mark any copy the assessment at his or her discretion.

You must keep a backup copy of every assignment you submit, until the marked assignment has been returned
to you. In the unlikely event that one of your assignments is misplaced, you will need to submit your backup
copy.

Any work you submit may be checked by electronic or other means for the purposes of detecting collusion
and/or plagiarism.

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When you submit an assignment through your CloudDeakin unit site, you will receive an email to your Deakin
email address confirming that it has been submitted. You should check that you can see your assignment in
the Submissions view of the Assignment Dropbox folder after upload, and check for, and keep, the email
receipt for the submission.

Marking and feedback

The marking rubric for this task is below and also available in the MAF307 CloudDeakin unit site - in the
Assessment folder (under Assessment Resources).
It is always a useful exercise to familiarise yourself with the criteria before completing any assessment
task. Criteria act as a boundary around the task and help identify what assessors are looking for
specifically in your submission. The criteria are drawn from the unit’s learning outcomes ensuring they
align with appropriate graduate attribute/s.

Identifying the standard you aim to achieve is also a useful strategy for success and to that end,
familiarising yourself with the descriptor for that standard is highly recommended.

Students who submit their work by the due date will receive their marks and feedback on CloudDeakin
15 working days after the submission date.

Extensions
Extensions will only be granted for exceptional and/or unavoidable circumstances outside the student’s
control.
Students seeking an extension for an assignment prior to the due date should apply directly to the Unit
Chair by completing the Assignment and Online Test Extension Application Form. Requests for extensions
will not be considered after 12 noon, 15th September, 2021. Applications for special consideration after the
due date must be submitted via StudentConnect.

Late submission
The following marking penalties will apply if you submit an assessment task after the due date without an
approved extension: 5% will be deducted from available marks for each day up to five days, and work that is
submitted more than five days after the due date will not be marked and will receive 0% for the task.

'Day' means working day for paper submissions and calendar day for electronic submissions. The Unit Chair
may refuse to accept a late submission where it is unreasonable or impracticable to assess the task after the
due date.

Calculation of the late penalty is as follows: this is based on the assignment being due on a Thursday at 8:00pm
• 1 day late: submitted after Thursday 11:59pm and before Friday 11:59pm– 5% penalty.
• 2 days late: submitted after Friday 11:59pm and before Saturday 11:59pm – 10% penalty.
• 3 days late: submitted after Saturday 11:59pm and before Sunday 11:59pm – 15% penalty.
• 4 days late: submitted after Sunday 11:59pm and before Monday 11:59pm – 20% penalty.
• 5 days late: submitted after Monday 11:59pm and before Tuesday 11:59pm – 25% penalty.
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 • Dropbox closes the Tuesday after 11:59pm AEST time.

Support
The Division of Student Life provides a range of Study Support resources and services, available throughout
the academic year, including Writing Mentor and Maths Mentor online drop ins and the SmartThinking 24
hour writing feedback service at this link. If you would prefer some more in depth and tailored
support, make an appointment online with a Language and Learning Adviser.

Referencing
Any material used in this assignment that is not your original work must be acknowledged as such and
appropriately referenced. You can find information about plagiarism and other study support resources at
the following website: http://www.deakin.edu.au/students/study-support

Academic misconduct
For information about academic misconduct, special consideration, extensions, and assessment feedback,
please refer to the document Your rights and responsibilities as a student in this Unit in the first folder next
to the Unit Guide in the Resources area of the CloudDeakin unit site.

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RUBRIC

Discipline-specific
Unacceptable / Not
knowledge and Poor Good Excellent
attempted
capabilities
1.5 points
1 point
0.75 points
Demonstrates an outstanding
Demonstrates an appropriate
0 points Demonstrates an understanding of understanding of most of the
understanding
some of the Business and Industry Business and Industry
of most of the Business and Industry
Business and Industry Does not demonstrate an analysis tools, such as : analysis tools,
analysis tools such as :
Analysis understanding of 1. Porter's 5 forces model such as :
1. Porter's 5 forces model
Business / Industry 2. Industry Life Cycle Analysis 1. Porter's 5 forces model
2. Industry Life Cycle Analysis
Analysis. 3. Peer Group Comparison 2. Industry Life Cycle Analysis
3. Peer Group Comparison
Discussions/analysis lacks 3. Peer Group Comparison
Discussions/analyses are
relevance. Discussion/analysis is
relevant to a certain extent.
relevant.
0.75 points
1.5 points
1 point
0 points
Demonstrates some understanding Demonstrates outstanding
Demonstrates appropriate understanding understanding of the Financial
Financial Analysis Does not demonstrate an
of the Financial analysis tools, such as analysis tools such as
understanding of of the Financial analysis tools,
understanding Financial Statements & understanding
Financial Analysis. such as understanding Financial
Ratio analysis. Financial Statements &
Statements & Ratio
Ratio analysis.
analysis.
0 points

Does not demonstrate an 1 point 1.5 points

understanding of
Valuation models. 0.75 points Demonstrates an appropriate Demonstrates outstanding
Valuation, Risk
Does not provide an understanding understanding of the Valuation
Factors and
understanding of risk Demonstrates some understanding of the Valuation analysis. Clearly analysis & business risk
Recommendation
factors. of valuation, risk factors. identifies and discusses business risk factors.
Does not provide factor. Provides appropriate Provides appropriate
appropriate Recommendation. Recommendation.
Recommendation based on
Valuation.
Communication Poor Good Excellent
0 points 0.5 points
1 point
Context , Audience
No understanding of Good understanding of the context,
and Purpose Excellent understanding of the context,
context, purpose and purpose and audience of the
purpose and audience of the reports.
the audience of the reports. report.
0 points 0.5 points 1 point
Presentation
No understanding of Good understanding of the context, Excellent understanding of the context,
context, purpose and purpose and audience of the purpose and audience of the reports.
 the audience of the reports. report.
0.5 points 1 point 1.5 points

English
Poor English & grammar. Good use of the English language. Excellent English.

Digital Literacy Poor Good Excellent

0 points
1 point 2 points
Appropriateness of
Data Collection Inappropriate /
Poor data collection. Good data collection and reporting.
unacceptable data.

0 points
0.5 points 1 point

References Inappropriate /
Good referencing. Excellent referencing.
Unacceptable referencing.

Unacceptable / Not
Criticle Thinking Poor Good Excellent
attempted
1 point
0.5 points 0.75 points
Excellent Industry Analysis.
0 points
Poor Industry Analysis. Good Industry Analysis. Outstanding use of relevant
Inadequate use of : Good use of: tools
Business and Industry
Inappropriate/unacceptable 1. Porter's 5 Forces Model 1. Porter's 5 Forces Model such as:
Analysis
Industry Analysis. 2. Industry Life Cycle Analysis 2. Industry Life Cycle Analysis 1. Porter's 5 Forces Model
3. Peer Group Comparison 3. Peer Group Comparison 2. Industry Life Cycle Analysis
Discussions lack relevance and Discussion is mostly relevant but lacks 3. Peer Group Comparison
insight. insight. Relevant & Insightful
discussion.
1 point

Excellent Financial Analysis.

0.5 points 0.75 points
Outstanding interpretation of
0 points
the
Poor Financial Analysis. Good Financial Analysis.
ratios.
Poor interpretation of the ratios. Adequate interpretation of the ratios.
Inappropriate / Outstanding analysis of the
Financial Analysis Poor analysis of the time trend of Adequate analysis of the time trend of
Unacceptable Financial time
the ratios. the ratios.
Analysis trend of the ratios.
Poor comparison of the ratios Adequate comparison of the ratios
Outstanding comparison of the
against some benchmark. against some benchmark.
ratios
Poor financial forecasting. appropriate use of financial forecasting.
against some benchmark.
Excellent use of financial
forecasting.

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 0 points 0.75 points 1 point
Valuation, Risk 0.5 points
Factors and Inappropriate /
Recommendation Unacceptable Valuation Poor Valuation Analysis. Good Valuation Analysis. Excellent Valuation Analysis.
Analysis.
Video Presentation
Unacceptable / Poor OK Good Excellent
0 points
1 point 3 points
2 points
Demonstrates no
Demonstrates some understanding Demonstrates Excellent
understanding of : Demonstrates Good understanding of :
Discipline Specific of : understanding of :
Business activity of the firm Business activity of the firm
Knowledge Business activity of the firm Business activity of the firm
Macro-Economic factors Macro-Economic factors
Macro-Economic factors Macro-Economic factors
Industry dynamics Industry dynamics
Industry dynamics Industry dynamics
Financial Analysis of the Financial Analysis of the firm
Financial Analysis of the firm Financial Analysis of the firm
firm
3 points
0 points
1 point
2 points Demonstrates excellent
Demonstrates no / poor abilities to
Demonstrates some abilities to
ability to analyse: Good demonstration of abilities to analyse:
analyse:
* Strength & Weakness of analyse: * Strength & Weakness of the
* Strength & Weakness of the
Critical Analysis the business * Strength & Weakness of the business business
business
* Future opportunities and * Future opportunities and threats based * Future opportunities and
* Future opportunities and threats
threats based on on economic factors and industry level threats
based on economic factors and
economic factors and competitions based on economic factors
industry-level competitions
industry level competitions * Financial ratio and
* Financial ratio
* Financial ratio industry-level competitions
* Financial ratio
1 point 3 points
0 points 2 points
OK communication. Excellent communication.
Communication Poor communication. Good communication.
Some demonstration of positive body Excellent body language.
No use of graphs and Good body language.
language. Excellent use of graphs and
charts. Good / some use graphs and charts.
Some / no use of graphs and charts. charts.
Fail (N) - less than 12.5 Distinction (D) - less than 22
Pass (P) - less than 15 but Credit (C) - less than 18 but High Distinction (HD) -
Overall Score but but
12.5 or more 15 or more 22 or more
0 or more 18 or more

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