Nintendo Ntdoy - mandatory paper, analyzing 2 companies PDF

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mandatory paper, analyzing 2 companies...

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Professor Jack Clark Francis, PhD

Anton SUKAJ 1

Nintendo Co., Ltd., (NTDOY) Nintendo Co., Ltd., (NTDOY) together with its subsidiaries, develops, manufactures, and sells electronic entertainment products internationally. Nintendo provides video game platforms, playing cards, and many other products. Handheld and home console hardware and software. Nintendo was formerly known as Nintendo Playing Card Co., Ltd. founded in 1889 and is based in Kyoto, Japan and changed its name to Nintendo Co., Ltd. in 1963. The company has a Market Cap of 4,547,748.6 with 120.1 million shares outstanding. It is traded on OTCMKTS at about $43.05. It has a Beta of 0.7, the company pays a dividend of $0.18 per share on March 26th, it has never had stock spits, and it has an active management style. As of today the president of the company is Tatsumi Kimishima, who started as a designer in the company but made his way through the ranks. As the President of the enterprise today his biggest goals are the Nintendo Switch, a hybrid/TV game console which launched in March 2017. The system has three platforms, TV Mode, Tablet Mode and Handheld mode. An awesome feature of the product is the battery life, somewhat between 2.5 hours to 6 hours depending on the game played. This is Nintendos latest project. Since its introduction in March, Nintendo’s gaming console has sold over 4.7 million units as well as 13.6 million games. In fact, demand is so strong for the Switch that Nintendo has been unable to keep up and has been struggling to maintain the console on shelves. Switch biggest competitors as of today are Xbox of Microsoft and PS4 of Sony. All three of them are priced the same, $299. The advantage of Nintendo Switch is the fact that it is easier to carry anywhere at any time while the two other competitors are more fixed devices.

Professor Jack Clark Francis, PhD

Anton SUKAJ 2

The Japanese electronics giant operating profit during the first fiscal quarter was Yen16.2 billion on Yen154.1 billion in revenue, nearly 150% year-on-year rise, a turnaround from a Yen5.1 billion operating loss a year earlier when Nintendo was phasing out the unsuccessful Wii U console. Net profit was Yen 21.3 billion, compared with a Yen 24.5 billion net loss a year ago. As president Kimishima said in one interview later, the company started also focusing on mobile phone games such as Pokemon GO last summer. The global trend over the Pokémon Go smartphone game brought a net-profit bonus to Nintendo Co. in the latest quarter, but its lagging hardware business was an operating-earnings drag. Nintendo recorded an operating loss of Yen812 million ($7.8 million) in the July-September quarter. Considering all the changes on Nintendos operation, the stock price for the company changed too. As of March 3, 2017, the stock was priced at about $26.16, and as of September 12, 2017, closing price was at $43.05. The launch of Nintendo Switch and boost Nintendos performance. We see a 22% growth prior the first quarter of 2017 and a total of 30.2% YTD growth. The net income for the 2017 2Q was Yen 148,368.00 with a 25% growth from the prior quarter. The trend keeps going as Nintendo has more demand for the product than actual stock. The production is at its highest levels. The goal of the company is to get back at its glory year 2006, where its system Wii sold over 101 million units, holding 37% of the market share placing them before Xbox and PS3, climbing their stock price at about $78 per share. As many Wall Street analyst estimate an increase in companies revenue and stock price, Nintendo is on the right track to a long, fruitful future. The company has been in the business for over a century, and there is strong data that shows they have the potential to continue their existence and dominate the markets.

Professor Jack Clark Francis, PhD

Anton SUKAJ 3

Vanguard 500 Index Investor (VFINX) Vanguard S&P 500 ETF – Vanguard Index Funds is an exchange-traded fund launched and managed by The Vanguard Group, Inc. The fund invests in the public companies of the United States. It seeks to participate in stocks of firms operating across diversified sectors. The fund invests in stocks of giant-cap companies. It aims to replicate the performance of the S&P 500 Index, by investing in stocks of corporations as per their weightings in the index. Vanguard Index Funds - Vanguard S&P 500 ETF was formed on August 31, 1976, and it is resident in the United States. The company’s headquarters are located in Pennsylvania, and the current CEO is Willam McNabb. The company has a passive management style. The index fund became public as of January 1st, 1980, placed at $13.80 and today as September 12, 2017, closing price, is traded at $231.39. Through the years the Index fund has grown. The YTD return as of June 30th, 2017 is 9.26% according to Morning Star while a 10-year investment return is about 7.06%. The best yearly return the company had on January 2013 to January 2014 with an average return of 32.18% while the worst year was 2008 with a loss of 37.02% where their stock price dropped from $140.61 to $73.44 during the 14 month recession. The company has a total of 511 stocks and three bonds holdings with a total asset of $341.2 B, where the top 10 stocks make up 18.94% of the index. The top 10 colossal companies that Vanguard Index Fund holds are: Apple 3.6%, Microsoft Corp 2.6%, Facebook Inc A 1.9%, Amazon.com Inc 1.8%, Johnson & Johnson 1.7%, Exxon Mobil Corp 1.6%, JPMorgan Chase & Co 1.5%, Berkshire Hathaway Inc B 1.5%, Alphabet Inc A 1.3% and Alphabet Inc C 1.3%. Turning over the portfolio means buying and selling securities. The Fund pays transaction fees, such as commissions when it “turns over” its portfolio. That being said, a higher portfolio

Professor Jack Clark Francis, PhD

Anton SUKAJ 4

turnover rate may show higher transaction fees and might result in more taxes. These costs are not reflected in yearly fund operating expenses or in the previous expense examples, decrease the Fund’s performance. Throughout the most recent fiscal year, the Vanguard Index Fund’s portfolio turnover rate was 4% of the average value of its portfolio. The minimum investment amount is $3000, either stock or IRA. The company charges the management fees include the component profit over and above companies’ cost of providing services. It offers share for regular investors and also Admiral Shares, which have lower fees, but the investors have to meet certain requirements such, having:

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$10,000 for most index funds and tax-managed funds.

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$50,000 for most actively managed funds.

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$100,000 for certain sector-specific index funds.

The management fees for investors shares are 0.12% and 0.03% for Admiral Shares, there isn’t any 12b-1 Distribution Fee neither a load fee, but there is another 0.2% and 0.1% ‘Other Expense Fee’ for Investor Shares and Admiral Shares respectively. Vanguard charges a $20 account service fee on fund accounts that have a balance below $10,000 for any reason, including market fluctuation.

Overall, the index fund has brought a positive return to most of its investors throughout the years. Investing in the biggest companies has brought the risk down with a good average payout, traded at NASDAQ holding a 72.4 B Market Cap with 316 MM shares outstanding with a BETA of 1.00 making it possible for anyone to invest....