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Izza Investment

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izza

This document analyzes Engro Foods stock from December 2021 to December 2022. It shows the monthly stock price and return, compared to the KSE 100 index. The beta is calculated as 0.68, meaning the stock is less volatile than the index. The expected return is calculated as 1.83% monthly based on the 12-month T-bill rate. Using the capital asset pricing model, the required return is calculated as 0.062%, indicating the stock is undervalued based on its actual -1.78% average return.

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Izza Investment

Uploaded by

izza
25 views3 pages
This document analyzes Engro Foods stock from December 2021 to December 2022. It shows the monthly stock price and return, compared to the KSE 100 index. The beta is calculated as 0.68, meaning the stock is less volatile than the index. The expected return is calculated as 1.83% monthly based on the 12-month T-bill rate. Using the capital asset pricing model, the required return is calculated as 0.062%, indicating the stock is undervalued based on its actual -1.78% average return.

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This document analyzes Engro Foods stock from December 2021 to December 2022. It shows the monthly stock price and return, compared to the KSE 100 index. The beta is calculated as 0.68, meaning the stock is less volatile than the index. The expected return is calculated as 1.83% monthly based on the 12-month T-bill rate. Using the capital asset pricing model, the required return is calculated as 0.062%, indicating the stock is undervalued based on its actual -1.78% average return.

Copyright:

© All Rights Reserved
Download as XLSX, PDF, TXT or read online from Scribd
Download as xlsx, pdf, or txt
25 views3 pages

Izza Investment

Uploaded by

izza
This document analyzes Engro Foods stock from December 2021 to December 2022. It shows the monthly stock price and return, compared to the KSE 100 index. The beta is calculated as 0.68, meaning the stock is less volatile than the index. The expected return is calculated as 1.83% monthly based on the 12-month T-bill rate. Using the capital asset pricing model, the required return is calculated as 0.062%, indicating the stock is undervalued based on its actual -1.78% average return.

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You are on page 1/ 3

Submitted by IZZA TANVEER

01-114201-006

Selected Stock Engro Foods

Date Price Return KSE 100 Return


12/1/2021 84.6 44,596.07
1/1/2022 93.82 10.90% 45,374.68 1.75%
2/1/2022 83 -11.53% 44,461.01 -2.01%
3/1/2022 84.5 1.81% 44,928.83 1.05%
4/1/2022 74.94 -11.31% 45,249.41 0.71%
5/1/2022 71 -5.26% 43,078.14 -4.80%
6/1/2022 68.25 -3.87% 41,540.83 -3.57%
7/1/2022 65.99 -3.31% 40,150.36 -3.35%
8/1/2022 72.5 9.87% 42,351.15 5.48%
9/1/2022 65.5 -9.66% 41,128.67 -2.89%
10/1/2022 68 3.82% 41,264.66 0.33%
11/1/2022 69.9 2.79% 42,348.63 2.63%
12/1/2022 65.99 -5.59% 40,420.45 -4.55%
-21.36% -9.22%
Average Return of Engro -1.78% Average Return of KSE 100 -0.77%

To Find Beta
Beta = Cov / Var
Beta -----> 0.68
Since beta is lesser than 1 it means that engro stocks has lower volatality than the KSE 100 index.

As of june 2023 the t-bill rate for 12 month period is 21.9997%. Expected Return ->
monthly rate --> 1.83% E.R ----->

Prediction of Price on January 1st 2023


1/1/2023 66.0309138
R1 -> Return - Avg Return on engro R2 -> Return - Avg Return on KSE 100 R3 -> R1 * R2 (R2)^2

12.68% 2.51% 0.32% 0.06%


-9.75% -1.25% 0.12% 0.02%
3.59% 1.82% 0.07% 0.03%
-9.53% 0.71% -0.07% 0.01%
-3.48% -4.03% 0.14% 0.16%
-2.09% -2.80% 0.06% 0.08%
-1.53% -2.58% 0.04% 0.07%
11.64% -4.71% -0.55% 0.22%
-7.88% -2.12% 0.17% 0.04%
5.60% 1.10% 0.06% 0.01%
4.57% 3.39% 0.16% 0.12%
-3.81% -3.79% 0.14% 0.14%
0.65% 0.96%

than the KSE 100 index.

Rf + B(Rm-Rf)
0.062% By comparing 0.06% with -1.78%(return on stock value) we can say that the stcok is un
e) we can say that the stcok is undervalued.

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