Browsing by Issue Date, starting with "2014-04-09"
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- Can pairing strategies be even more profitable? : a study on pairs trading for the U.S. Russel 2000 Index constituentsPublication . Satar, Muhammad Hussein Abdul; Kokkonen, JoniPairs trading is considered as a profitable Wall Street strategy. We analyse the influence of K-Means clustering using EPS and book-value per share ratios on pairs trading returns in the formation period, before coupling pairs, while using 3 different ranking methodologies which include the one proposed by Gatev et al. (2006). We use data from the Russel 2000 index from January 2003 to the end of June 2013, on 3.711 stocks. We find that a strategy based on the orthogonal regression approach outputs an impressive 4.35% statistically significant average excess monthly return and a Sharpe ratio of 3.23 if the K-Means clustering is applied and 20 pairs are selected, which compares to the Gatev’s strategy holding -0.54% without clustering for the same sample. We also find that the orthogonal regression method outputs on average 94 b.p. higher monthly excess returns than the average squared deviation methodology and that using the Pearson correlation coefficient for ranking pairs outputs permanently negative returns, independently of the clustering and number of pairs. Likewise, we find that the profitability of the pairs trading strategy is not dependent on the utilities sector.
- FixeAds : we enable transactionsPublication . Banazol, Mariana Simões Athayde; Cardeal, NunoThe OLX website is a classified online service founded seven years ago in New York, U.S.A and Buenos Aires, Argentina. Aiming to become a global reference for ecommerce platforms — such as eBay and Amazon — it rapidly evolved to other markets and is currently operating in 107 countries, with a total of 42 different languages. The success relies on the local expertise as OLX expands by engaging with local companies, profiting from their specific know-‐how and leveraging them back through international brand recognition. It is a Win-‐Win situation that derives from the “Think global, act local.” premise. In Portugal, OLX has been around since last year and it is managed by FixeAds. FixeAds is a preeminent online-‐services provider founded in 2004, accountable for other leading websites such as Imovirtual and Standvirtual. The purpose of the following case study is to emphasize the importance of internet services and its managerial role when in an internationalization process. For that, an assessment of the Portuguese company will be made, together with an overview of the online classified market in both Angola and Mozambique. Despite of the recent economic uptrend in both of these countries, the rate of growth is not aligned with the rate of development which then translates into several setbacks. The lack of internet access and its respective costs, the unemployment rate and the overall income inequalities were some of the major barriers found for a smooth implementation of the business unit. By contrast the Southern Africa Development Community (SADC) shows promising results in a global context and it represents a clear opportunity due to the local industry’s initial maturity stage, ensuring there is an entire market yet to capture.
- The effect of government budget on Portuguese stock marketPublication . Oliveira, Ana Sofia de; Kokkonen, JoniGovernment budget reflects a prevision of future expenses and revenues which will predict the economic and financial situation of the country. This paper studies the effect of the publication, approval and actions inside the Portuguese government budget on the stock market performance of Portuguese companies. Additionally, the effects of presidential and legislative elections are also tested in the stock prices. The 46 companies represented in this study are listed on the Portuguese Stock Index between 1998 and 2013. I realize that a publication of government budget to the Parliament leads to a positive and significant return on the full sample results, basic materials and consumer services sector. The same sectors react in a positive way to periods of presidential elections. This study also provides a comparison between sectors. The consumer services sector reveals to be the more volatile sector before changes in the resources invested in each ministry. The consumer services sector is predominantly affected, in a negative way, by not rational expenses in the Ministry of Health. The financial sector has negative reactions on stock returns when the investment in the Ministry of Finance is reduced by the State.
- Equity valuation : Cofina, SGPSPublication . Guimarães, Gonçalo Maria Quintino Rogado de Mesquita; Martins, José TudelaEquity valuation has been highly debated among academics and practitioners. There are many approaches and choosing the right one can be a challenge, making valuation to be considered more an art than a science. This dissertation aims to obtain the price target of Cofina, a Portuguese leading company in media sector. To achieve this goal we had to understand how equity valuation can be conducted and search the best approach to value Cofina. By discussing the main valuation literature and Cofina’s characteristics, we chose to apply the Discount Cash-Flow method, using Adjusted Present Value approach. A relative valuation was also performed which revealed to be useful as a complement of the DCF valuation. Our results were compared to Caixa BI Investment Banking. Different methods and assumptions were used but quite similar results were obtained. While we reached a final price target of 0.78€, Caixa BI set a price target of 0.70€. Consequently, we recommend investors to buy. With this valuation we can conclude that Cofina’s shares are undervalued and trading at a discount, since they were listed in 0.62€ in 31st January of 2014.
- CGC Genetics case study : a Portuguese SME in a global marketPublication . Oliva, Inês Braz; Cardeal, NunoThis master thesis is divided in three parts: case study, literature review and teaching notes, aiming to provide a real business case used for class discussion in a strategic-based course, where students can apply strategic frameworks and their knowledge in an authentic case. CGC Genetics was the first private medical genetics laboratory in Portugal in 1992. In 2012, CGC offers abroad more than 1500 laboratory and clinical tests that cover all medical areas. In order to provide the best and complete services, besides the laboratory services, the company also provided consults medical genetics and psychological support. In 2012, CGC was supplying 32 countries through the laboratories in Portugal, Spain and United States of America. However, the internationalization to both countries, Spain and United Sates was troubled. The company was not successful when it entered at the first time into Spain, so there was a need to take strategic decisions to improve this situation. However, due the experience gained through the internationalization to Spain, CGC entered in the U.S. market as an American firm, which significantly reduced the barriers. As the company ensures the major capacity in Oporto and the perception about Portugal and Portuguese products or services, in addition to the high protectionism, have a strong impact on CGC’s strategy. The second part namely literature review, contains the relevant theory necessary to interpret and analyze the case study and to solve the assignment questions, one of the topics present on last section, teaching notes. This last content provides instructor guidance with suggested assignment questions as well the possible solutions for those discussion topics.
- MetLife´s International Strategy : Alico´s acquisitionPublication . Neto, Frederico de Carvalho; Cardeal, NunoThe current business environment is characterized by a huge uncertainty, competitiveness and constant attempt to decrease costs and increase productivity. The companies’ focus is even more on processes in order to achieve the desired results. In order to remain in the market, companies were led to change their organization structure and processes to satisfy customers’ needs, who are increasingly demanding and diverse. It is essential that companies are able to develop sustainable strategic plan. If the strategy is well executed, this will result in the creation of a competitive advantage for the company, with the purpose of generate added value. This thesis aims to analyze MetLife’s international strategies. The study will have as main focus, the international expansion, Iberian integration and especially the Alico’s acquisition by MetLife - the main benefits and risks of this operation. It was made an effort to have the largest possible access to participants in these three processes in order to understand the main reasons for the continued growth of MetLife, in a market that is increasingly global and competitive.
- Does renewable energies’ usage act as a shield against oil price changes?Publication . Cardoso, Duarte Cortez dos Santos Vaz; Kokkonen, JoniThe purpose of this dissertation is to contribute to the existing literature on equity markets and energy prices by studying the impact of oil price changes on several American and European companies, taking into consideration their level of renewable energies’ usage within the total energy consumption. The results show that in fact there is an overall negative impact of oil price changes. However, when we split the oil price changes in positive and negative ones, it seems that their impact is symmetric, being positive (negative) when the change is negative (positive). Using the level of renewable energies in the estimation models, the conclusion that arrives is that there could be an optimal maximum level of green energies’ usage, for which the companies can somewhat benefit from a protection against oil price changes, thus hedging against its risk.
- Ach Brito : conquering France with confidencePublication . Sousa, Adriana Isabel Carneiro Morais de; Guedes, Nuno MagalhãesAfter weathering an instable phase for more than three decades, owing to a combination of internal limitations and exogenous variables in the country’s scenario, Ach Brito was able to recover significantly as a result of uncommon adopted measures by the management team. Founded in 1918, the soaps and perfumes manufacturer had a successful path due to the solid recognition conquered over the years in Portugal, and maintaining a rich patrimony preserved until today. Its differentiated products portfolio, particularly the soaps, distinguished by the ingredients, astounding scents and detailed packages, was the source of Ach Brito’s success in a global basis. Nonetheless, the positioning of one of its brands, Confiança (acquired in 2008), was still far from being welcomed in one particular market: France. The dilemma Ach Brito faces, in 2013, is whether it should keep on investing in its positioning or if the best solution is to remove Confiança from the French market. Overall, this case is particularly interesting due to the high product differentiation and its risk averse internationalization strategy. It also shows that in spite of being considered distinctive in the Portuguese market that may not be enough to succeed in France, due to this market’s demanding conditions. The focus is thus given to possible solutions to address to this case. To analyze the positioning problem, its drawbacks and possible solutions, the Literature Review chapter offers theoretical support. Furthermore, the Teaching Note chapter will present an extensive analysis of the situation and recommendations regarding Confiança’s future.
- Portugal Telecom adapting to the market : MEO, the new futurePublication . Martins, Rita Marçal Salvador da Costa; Guedes, Nuno MagalhãesIn 2007 the Portuguese telecommunications market changed. With the spin-off of PT Multimédia from Portugal Telecom, a new company was born: Zon Multimédia. Portugal Telecom was the incumbent operator in telecommunications providing all the main telecommunications services. With the spin-off, PT ran out of the valuable Pay-TV service for the consumer. The Case Study presents the strategy of PT when in face of the spin-off, and its response with the creation of MEO, a new product mainly focused on TV services, with irreverent features that would change the normal way to watch TV. The Master Thesis also includes a Literature Review and a Teaching Note. The Literature Review provides a theoretical approach to the main subjects addressed in the Case and the Teaching Note is the analysis of the Case Study.
- Tecnodeck : facing the decision of choosing a new market : Brazil or Angola?Publication . Faria, João Maria O´Donnell; Cardeal, NunoThis work aims to provide a teaching case study in the area of international strategy by deeply explain the basis for an analysis of a possible expansion to new countries by a Portuguese company called Tecnodeck, which sells an innovative type of deck. The objective is to give teachers and students access to a practical example where theoretical frameworks can be applied and contain three parts: Case-Study, Teaching Notes and Literature Review. Founded in 2005, Tecnodeck is the market leader in Portugal in the deck sales, selling a product with specific characteristics that differentiate the company from its competitors. In the beginning of 2012, as the management of the company noticed a negative pattern in the growth of the business, there was made an important decision: operations in international markets should be expanded and the firm should become less dependent on the Portuguese market, which accounted for 75% of the sales at the time. This expansion is the central theme in the case. In the first part of the case, there are chapters explaining the first times in the business, the business model, context in Portugal when the decision is to be taken, international markets where the company already operates, and market perspectives from the sector that absorbs a great share of the company´s sales: the construction sector. In the second chapter, there is a brief explanation on the important factors to having into account when choosing the next destination, and a detailed analysis of the two main possibilities: Brazil and Angola. The second part gives instructions on how to conduct the presentation of the case in class, suggesting possible questions and discussion topics to be proposed in class, as well as possible ways of answering the proposed questions. The literature review uses theoretical articles or statements to explain the frameworks used in the case.