The Coffee Bean & Tea Leaf(CBTL), Business strategy case study
Investment Proposal
1. Brokerage #3
Your Perfect Choice
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2. Our client would rather lose some money to help his
interests in innovation and social responsibility than gain
money from a company that does not follow his desire
Diversifying our portfolio by investing in companies from different industries that
have a potential to increase their price
Initial Options
1.Alternative energy ETF/Stocks
2.Innovative companies we admire
3.Companies that treat well their workers
4.Companies that are socially responsible
Thursday, October 17, 2013
3. Our objective:
Invest 3000 USD with a risk greater than 10%
Willing to help companies that are socially responsible, companies that treat well their workers and
companies that aim to expand the good use of alternative energy.
We want to be aggressive but smart
Be able to earn a decent amount of money by investing in risky stocks
Place to work
Our
Cummins
Social Responsibility
Tesla
Company we admire
Procter and Gamble
Alternative Energy
ICLN- Diversified because of
countries and types of
alternative energy
choices:
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Vestas- Wind power
First Solar- Solar panels
4. Options Faced:
Stocks
Stocks are primarily
Bonds
Mutual Funds
Not the correct option in Usually you give your
ETF’s
Currency Exchange
Probably the most
An innovative way to
invest your money. At
used over a period of at this case. Long term
money to a brokerage
secure way of investing
least 3 years. They might investment option with
and they have different
your money over a short this point, we do not
be volatile and
low risk. At present, with options on how to invest period of time. At least, it have the experience to
unpredictable over a
interest changes
short period of time,
changing, this might not portfolio by investing in
unless you have reasons be a good decision. In
that support your
several stocks and
bonds you pay the debt industries. By doing this
assertion on why things of a company, and you
might happen.
it. They diversify your
the risk decreases
are not part owner of the because you do not only
company.
depend on one stock’s
performance.
Thursday, October 17, 2013
has become the easiest play with different
to predict so it will be an exchange rations and
option to consider.
gain money, so it might
be not secure because
we do not know much
about it.
6. “Because it is more expensive to screen for
socially acceptable investments, they tend to
under-perform the broad index funds owning
everything. Author and advisor Rick Ferri has
good advice: he recommends buying the
whole market and using the extra returns to
make a financial contribution to whatever
Earth-friendly cause you believe in.”
Thursday, October 17, 2013
9. Why ICNL?
Supports the environment and foster innovation by providing and getting energy in sustainable ways which do
not affect the environment and its surroundings.
After three years in the index, it has started increasing after falling significantly during the first two years
so it might be the moment to buy
This ETF is our highest risk, but at the same time it introduces a new industry into our portfolio and balances it
geographically.
Thursday, October 17, 2013
14. Vestas
Stock Key Data
•
Stock history: VWDRY is one of the few stocks that holds a different pattern
than all of the rest of the alternative energy sector. Yes, it plummeted during
2011, but the price of this stock has already started to increase. Their price
increased by 367% in the past 52 weeks, and it is about four times larger than
its minimum value in the past three years.
•
Beta: Once again, as being a single alternative energy stock which depends
simply in wind energy, this company is really risky and has a beta of 2.07 which
shows their high volatility.
•
P/E ratio: Their P/E ratio isn’t stated, but most of the energy stocks stand near
10, and their recent performance proofs that this shouldn’t be an outlier, so if
this is how many financial advisors predict, it is another reason to invest in the
stock.
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15. Forecast
•
At present, they are about to expand their production of energy through wind
from wind farms to offshore wind turbines. As seen in the video, giant wind
flaps, a diameter of about 160m (larger than London Eye), will increase their
production significantly. Aside from being a great source, it is vital because in
the middle of the sea the wind is much more constant. The only problem
would be maintenance of the system, but they have developed a way of
accessing them each 27 hours. In this case, workers get intrinsic and extrinsic
motivation, because they really need to love engineering to work in this and
they get paid high wages and they work under the most secure system.
Thursday, October 17, 2013
18. FSLR
Stock Key Data
•
Stock history: At present, their value is less than a third than their 3 year
maximum. Similarly to every alternative energy stock, it plummeted during 2011
but in the start of 2012, if settled down and it established a price of about 30
dollars.
•
Beta: According to several sources such as Google and Yahoo, the Beta of FSLR
stands in between 1.70 and 1.80. Clearly, it is a risky and volatile choice, and
that’s why we are not investing just in this single stock but we have decided to
split our money to have a final investment that is balanced, with risky stocks and
a secure ETF.
•
P/E ratio: With a PE ratio between 10 and 11, it stands really near one of the
most stable and large energy entities in the world: Exxon Mobile. This is a
neutral factor, it doesn’t impact significantly beneficially or negatively our choice.
Thursday, October 17, 2013
19. Forecast
•
Thursday, October 17, 2013
First Solar is the only company in the industry of solar energy that uses
Cadmium Telluride for their solar panels. This material, aside from being much
more environmentally friendly than silicone of the classic solar panel, it works
as a better conductor and it is much more effective. Because the use of this
product in their process of extracting the energy, they are one of the few
alternative energy that compete in price with normal energy producers, one of
the main reasons of their success. In the future, as we run out of resources,
these will become vital and the price will maintain and become lower that
other types of energy, so people will start to get energy from first solar and
their price will certainly increase.
21. Evidence & Support
•
•
Exchange traded funds that hold alternative energy stocks are among some this year’s top-performing non-leveraged sector ETFs.
•
•
Japan, China and the U.S. combine for nearly 55% of ICLN’s
•
‘New Chapter’ “Today marks the beginning of a new chapter in offshore wind, a market segment with significant growth potential,”
Marika Fredriksson, Vestas’s chief financial officer, said at a press conference in Tokyo today.
•
The pace of offshore wind installations has slowed this year, with the industry struggling to make grid connection in Germany and
tap government support in China. Bloomberg New Energy Finance forecasts 1.7 gigawatts of turbines at sea will be installed this
year, compared to 1.9 gigawatts in 2012. The market may grow to about 8 gigawatts in 2020.
•
The partnership bolsters Vestas’s ability to compete with Siemens AG (SIE) of Germany, the largest manufacturer of offshore
turbines by capacity installed last year, said Kasper Larsen, a credit analyst at Danske Bank A/S (DANSKE) in Copenhagen.
•
“From a strategic point of view, this JV is becoming more capable of competing with Siemens in the offshore wind turbine market,”
Larsen said. “You can now address utilities in a different manner than Vestas was able to do before.”
Imagine the potency of an ETF that can offer exposure to alternative energy stocks as well as Chinese and Japanese equities.
Investors do not need to imagine that alluring proposition because the iShares Global Clean Energy ETF (ICLN) delivers on all
three fronts. Up 27% year-to-date, ICLN has allocations to more than 10 countries,
ICLN is more focused on biofuels, ethanol, geothermal energy, solar and wind energy names. However, in a year where solar ETFs
such as the Guggenheim Solar ETF (TAN) are among the best-performing sector ETFs, ICLN has enough solar exposure to have
benefited from that industry’s resurgence.
Thursday, October 17, 2013
22. Best Place To Work
Cummins INC - CMI
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Thursday, October 17, 2013
23. They “design, manufacture, and distribute products. It
also services engines and related technologies, including
fuel systems, controls, air handling, filtration, emission
control and electrical power generation system.”
Build the best engines
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24. 2-B8CDD666/1$E4'6,/0$%D#'+,5('D>?FGDF?D?HD05%%+4,I4'6I;JI9+','#I9'<.+#'9D
Get to know them better
The new ISV5.0
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5.0 liter V8 diesel engine
Not only professional with a further vision to improve vehicles and
engines, but INNOVATIVE.
Thursday, October 17, 2013
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25. Cummins INC - CMI
Testimonials - Employee Reviews
“My time at Cummins was one of the best experiences for me. I worked under a very supportive manager
who gave me the tools and resources I needed to do my job. I was not micromanaged. Work life balance was
above average. The company is one of the few that really embraces diversity and career development.”
“The culture at Cummins is great. They value putting out the best products available, while also making sure
all the workers have a good work/life balance. They stress living healthy and being active outside of work.
Everyone I have worked with has been incredibly helpful, and makes sure I either get my questions answered,
or points me in the right direction.”
“Working with a dynamic work team.”
“People working together for a common goal. it sounds cliche but it's true.”
(cumminsworkplace-googleimages)
(indeed cummins-reviews)
Thursday, October 17, 2013
26. Cummins INC - CMI
"Our mission is to motivate employees to act like owners"
"They operate across cultures, functions, language
barriers and time zones to solve the technical and
logistical challenges created by a worldwide
customer base."
Cummins value the idea of “Serving
and improving the communities in
which we live in”, that's why
employees have the opportunity of
working on community service
projects for at least four hours per
year.
such as.. tutoring in Greater Indianapolis area
(cummins.com)
Thursday, October 17, 2013
27. " Fairness to all, the company extends benefits coverage to the domestic partners of
employees who don't have traditional spouses. Those benefits include complete healthcare
coverage, spouse and dependent life insurance, pensions, retiree medical coverage, family
leave in accordance with the Family and Medical Leave Act, adoption assistance and
relocation assistance."
"Employees may be promoted when their contributions to the company increase.
A promotion carries a minimum of a 7% increase in salary."
"The environment becomes more than just about your job; it's about [whether you're] making
things better" (Kyle Benning)
"Cummins has made, and continues to make, significant investments in a range of exciting
new products and in our distribution system to ensure that we continue to deliver profitable
growth and help our customers succeed."
(marketwired)
(computerworld)
Thursday, October 17, 2013
28. Cummins INC - CMI
Cummins forms part of the Fortune 500 corporation
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29. !"#$$%&'()*
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Beta & P/E
P/E ratio for United Technologies Corp
=
19.46
Beta for United Technologies Corp
=
1.07
BETA OF 1.74 IS
RISKY
Risky = more revenue
P/E low is less risky; trust that the revenue
supports the amount of stocks being bought
Thursday, October 17, 2013
or more loss
30. http://online.wsj.com/article/PR-CO-20130206-906610.html
Forecast
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They had a revenues of
$17.3 billion in 2012
Just
Expects to deliver revenues
of $31 billion in 2018
released a
Cummins expects to grow revenues at 2 to 3 times the rate of growth in global GDP
new engine
Revenue will grow faster than the
economy of the country
In 5 months if increasing at same rate
than last year the stock value would be
150
Thursday, October 17, 2013
32. Purpose
“We will provide branded products and services of
superior quality and value that improve the lives of the
world’s consumers, now and for generations to come.
As a result, consumers will reward us with leadership
sales, profit and value creation, allowing our people, our
shareholders and the communities in which we live and
work to prosper.” -P&G
Thursday, October 17, 2013
33. Procter and Gamble
Why admire this company?
Innovative
They not only work for themselves, but they
work for the audience they produce for.
Environmentally cautious
They take care of employees
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34. Procter and Gamble
Why P&G:
-Environmentally responsible
-Employees love their jobs
-Best customer services
-#30 in Forbes list of the most innovative companies
-Has purified 5 billion liters of drinking water in Third World countries (USA today)
-Two dozen P&G brands are sold for billions of dollars
“Just like almost every stock in the world, you would have experienced at least one or
two 40% to 50% drops in the market value of your Procter & Gamble stock during
your holding period. That is the price of generating wealth through stock
ownership. If you can’t handle that, park your money in the bank and be content
with the meager returns that are available.” -Joushua Kennon
Thursday, October 17, 2013
36. Concerns
Want the best people to work for them
but...
Fire employees to replace them with better ones
Used many chemicals in their products
but...
Chemicals are in the process of being
demolished from the company
Locations of the factories
are isolated
but...
Employee service is incredible, and
time is flexible in work hours
Thursday, October 17, 2013
37. Beta & P/E
Since the Beta is 0 < ! < 1 it means the company’s stock
market will rise and fall as the years go on, making it very
volatile.
Thursday, October 17, 2013
39. !"#$$%&'()*
Procter and Gamble
Procter and Gamble (P&G) is a world wide known company owning products such as Gillette, Herbal
Essences, Tide, Duracell batteries, CoverGirl makeup, Fabreze, Pampers, Downy paper towels etc.
Thursday, October 17, 2013
40. Forecast
The stocks will always rise and fall. P&G sells
merchandise to 4.8 billion people who are
unpredictable consumers.
Volatile
2 years
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Thursday, October 17, 2013
42. Tesla
What is Tesla?
One of the few tech innovative car companies in the world.
Want the world to be greener through their electrically manufactured cars
Volatile company to invest in
It is predicted that the stocks will rise over the years since their new model of car
(Model X SUV) is going to be released.
“There's a high likelihood that the Model X could prove extremely popular” Jefferies
analyst Elaine Kwei noted earlier this year
Kwei wrote in a research note earlier this year. "The current production line could be
doubled to 80k-100k units."
Thursday, October 17, 2013
43. Tesla
Although that may be the
case, tesla already has
begun being green; while
other companies are
planning to begin or are
starting the process of
being more ecological.
Tesla already have started
this process, knows what
they need to help
continue their success.
“The electric car company already exceeded its shipment
goal by delivering 5,150 instead of 4,500 cars during the
second quarter. The company began its first delivery to
Europe this week and plans to expand its reach in Asia,
particularly China, later this year.”
Investing in Tesla would not only help
you, if they flourish, but also help the
company and the ecological system.
Making Tesla innovative and socially
responsible.
“In a research report earlier this year while
upgrading Tesla shares to "buy," Deutsche
Bank analyst Dan Galves said there could be
exceptionally strong demand for the Model X.”
“Tesla, by the way, raised over $1 billion
during the second quarter by issuing
4.5 million shares of its common stock
and $660 million of convertible debt.”
Thursday, October 17, 2013
44. Tesla
Employee Reviews:
“Quality Control Inspector!(Former Employee),!Fremont, CA – July 12, 2013
Pros: fast paced, extreme physical movement, and great co-workers
Cons: long hours, unexpected overtime
Tesla is a very demanding job. You must always be prepared for the unexpected. You learn how to adapt to changes
every day, and managing my work throughout the entire process of building an electric car. We at Tesla work together as
one, ONE SHOT! Because that is all we have. Most enjoyable part the intense fast paced work environment that keeps
us busy even throughout the day. As being promoted to quality inspector, I had to create an entire work instruction with
the director of quality and approval of quality engineers.”
“Team Member body and white!(Former Employee),!Fremont, CA – August 29, 2013
Pros: good pay, sometimes free lunches on mandatory Saturdays and Sundays
Cons: mandatory 12 hour days, 7 days a week.
Very Productive workplace, at times overworking employees with 10-12 hour work days, 7 days a week.”
“Inventory Control Analyst!(Current Employee),!Fremont, CA – September 3, 2012
Pros: Fun place to work
Cons:: long hours; 6 or 7 days a week
It's a great place to work but being a "stat up", need to work very long hours (11 to 14). Also 6 to, sometimes, 7 days a
week.”
Thursday, October 17, 2013
47. Forecast
CNBC
By: The Associated Press
“THE BIG PICTURE: Tesla
currently makes one vehicle, the
$70,000 Model S sedan. It is
developing a crossover, the Model X,
which is expected to go on sale next
year and will likely cost more.
Ultimately, the company wants to
make a more affordable electric car _
known as Generation III _ in the
$35,000 range, but it hasn't said
when that car will go on sale.”
“Shares of electric car maker Tesla Motors rose Tuesday (October 15)
after investment bank Wedbush upgraded the company's shares and
raised its target price by 33 percent to $240 per share.”
Thursday, October 17, 2013
Bloomberg Business
week
By: The Associated
Press
