Browsing by Issue Date, starting with "2019-10-10"
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- Equity valuation : WestJet AirlinesPublication . Salib, Michelle; Martins, José Carlos TudelaThe purpose of this dissertation was to determine if a discrepancy was present in the market value of WestJet Airlines (WJA.TO) relative to its computed intrinsic value. WJA.TO is one of two major airlines that services the Canadian market and has experienced significant growth in its 25 years of tenure. As such, they appear to have entered into a state of maturity which now prompts the question, “what is their true value”. To thoroughly answer this question, an in-depth analysis of past market conditions as well as future market expectations and the competitive landscape were assessed in conjunction with WestJet’s historical performance. The Discounted Cash Flow method was used in tandem with a Relative Valuation approach to arrive at a value of $35.41/share CAD with the current share price hovering at $31/share CAD. Because the current $31/share was a market reaction to the Onex offer, the recommendation would be to Hold the stock as investment theory dictates that price is unlikely to move beyond that $31/share threshold. This valuation was directly compared to two analysts’ reports, one preceding the Onex deal and one proceeding it, with a $35/share price more closely aligning with the analyst report following the announcement.
- Traditional vs. structural equity valuation models : an application to the banking sectorPublication . Crisóstomo, Juliana Maria Bártolo; Silva, Nuno Ricardo Raimundo Rodrigues Marques daThis dissertation evaluates and compares, empirically and qualitatively, the equity value of the eight largest U.S. banks through the years of 1999 until 2018 using traditional and structural models. The structural model used was the Goldstein, Ju, Leland (2001) EBIT-based model, which was adapted to consider the characteristics of banks operations. In particular, the state variable was defined as the sum of earnings before taxes plus the bank's fixed costs, instead of EBIT. In this framework, shareholders decide when to close the bank depending on the amount of fixed operating costs and not interest expenses, as it is the case in most structural corporate finance models. The traditional methods applied were the market approach and the dividend discount model, which, despite their simplicity, do not fail to present reasonable figures. Model values and market values are compared using normalized root mean squared errors. On average, the approach with the lowest error was the Price to Tangible Assets, 38%. The second-lowest error was of the Price to Book Value approach, 39%. Then, the modified model of GJL error was 43%. The approach of the Price to Earnings multiple shown an error of 54%, while the dividend discount model showed the largest error of 103%. The modified model of GJL performed worse than expected, for the equity value is hugely depended on the value of the state variable at each moment in time. Thus, the recommendation is to apply this model with mean-reverting state variable.
- Danone SA, a valuation of a centennial companyPublication . Díaz Estévez, Ignacio; Martins, José Carlos TudelaThe present Dissertation aims to obtain the value of the multinational dairy company Danone as of 2019. In order to determine what is the aforementioned company worth, this document employs two different valuation techniques. First, the Discounted Cash Flow model is applied, and a target price is derived based upon Danone’s intrinsic value. Additionally, Danone’s value is computed through a comparison approach considering how similar firms are valued in the market. More specifically, this document employs the EV/EBITDA and PE multiples. Data was retrieved from both the Financial Report presented by Danone in February of 2019 as well as from the Thomson Reuters Eikon software, the OECD Economic Outlook and estimates from Damodaran website. A DCF base case scenario involving multiple growth and cost of capital assumptions is presented. Following Danone’s internal reporting and forecasting approach, the author develops two additional scenarios with potential risks and opportunities, divided into High and Medium according to their probability of materializing. The outcome from both methodologies results in a valuation range of €65.5 and €88.6, close to which the most accurate target price for Danone is to be found. Derived from a detailed and extensive analysis of the company’s intrinsic value, this target price is €88.77, implicitly suggesting a Strong Buy recommendation from the author.
- Executives misconducts and their consequences on the associated companies’ stock marketsPublication . Gaspar, Cláudia Ester Novo; Cerqueiro, Geraldo Manuel AlvesCorporate scandals drive news and media outbursts which temporarily catch the public’s interest; however, they may have a more significant effect on the business world. The purpose of this dissertation is to determine how executives misconduct affect the stock market price of their associated companies. All scandals that occurred between January 2013 and March 2019 within companies from S&P 500 and NASDAQ indexes were considered, with two exceptional cases. For this purpose, an event study methodology was applied. The findings suggest that corporate scandals committed by executives negatively affect the stock price of the concerned companies. Scandals were grouped by characteristics to outline various patterns. Related to type, financial scandals cause a more significant impact on the value of companies than personal misconduct. In terms of industries, technology is more negatively influenced by the occurrence of a scandal than other industries. Regarding the position of the executives in the company, scandals concerning individuals in top positions affect more the stock price than scandals exercised by lower executives. The last characteristic, being a former or current executive within the company, led to inconclusive results regarding the value of the company following a scandal. In order to determine which characteristics, the market has penalised most severely in these companies under study, a regression analysis was carried out. The results are consistent in showing that an executive holding a top position is a crucial negative factor when a scandal is announced.
- Evaluating the default probabilities of the automotive industry using EBIT-based structural modelsPublication . Elhanaoui, Azeddine; Silva, Nuno Ricardo Raimundo Rodrigues Marques daThis thesis implements the static EBIT-Based structural model proposed by Goldstein, Ju, & Leland (2001) to compute the default probabilities of 17 firms from the automotive industry. Following other papers (e.g. Eisdorfer, Goyal, & Zhdanov (2019)), this thesis also adapts our base model for the possibility of non-financial fixed costs, which are proxied by SG&A. The before mentioned models are calibrated using the Vassalou and Xing (2004) iterative approach, first used to calibrate the Merton (1974) model. The algorithm was adapted for the case with corporate payouts. Using a sample period of 12 years, this thesis shows how the default probabilities fluctuate across time in different geographies. The static Goldstein, Ju, & Leland (2001) leads to an average 5-year default probability of 2.38%. In contrast, the newly prosed model with fixed costs proxied by SG&A leads to an average 5-year default probability of 15.46%. Comparing these results with credit rating implied default probabilities of 3.42% shows that the later model’s estimates are high. This thesis concludes that, though widely used in the literature, the use of SG&A as a proxy for fixed costs leads to seemingly unreasonable high default probabilities. Its use as a proxy for fixed non-financial costs is thus questionable.
- Proposta ético-teológica de aperfeiçoamento da unidade letiva 1 "A Dignidade da vida humana" do 9º Ano, à luz do pensamento de Marciano Vidal.Publication . Delgado, Ilivriano João da Luz; Cunha, Jorge Teixeira dapresente relatório é realizado no âmbito da disciplina de Prática de Ensino Supervisionada e procura analisar a Unidade Letiva 1: “A dignidade da vida humana”. Vamos seguir o pensamento de Marciano Vidal com o intuito de averiguar se, esta UL1 do 9ºAno da Disciplina de EMRC, deve estar presente nas escolas estatais e/ou se é necessário delinearmos uma proposta de reformulação da mesma. A EMRC é uma disciplina confiada à Igreja Católica, havendo o risco de a confundir com o âmbito da catequese. A sua presença nas escolas estatais, dentro de um Estado de direito, e por apresentar um programa com metas, objetivos e conteúdos prescritivos e catequéticos, gera contestação social e uma consequente escassa adesão das famílias e respetivos alunos. O intuito deste trabalho é desmistificar estes preconceitos que envolvem a disciplina de EMRC, identificar criticamente as metas, objetivos e conteúdos catequéticos e doutrinais, e propor uma reformulação desta Unidade Letiva que possa transformar a EMRC numa disciplina que inclua todos num único currículo e que não se apresente dependente de uma adesão pessoal a nível religioso ou ideológico.
- Equity valuation Daimler, AGPublication . Neves, João Pedro de Sousa; Martins, José Carlos TudelaThis dissertation aims to present the investment valuation that provides a fair value for Daimler AG, a company inserted in the Automobile and Parts Industry in Germany. Then I compare the fair value with the market value and propose a sell, hold or buy recommendation according to the evolution studied. The current market price of DAI is €45,47 and I compute a fair value of €55,55, which means the stock is trading at premium. That being said I settle a buy recommendation for the current upside of almost 22,2% The first part of this dissertation presents the major models available to value the quoted asset and end with the benefits of the tow specific models that are going to be used. In the next section, it is presented an analysis to the Business overview and Industry overview. Then the valuation models, which are the DCF and the Relative Valuation, are explained in detail. Drivers, assumptions, and peer group are explained in detail in this section. Finally, I conclude the dissertation with a comparison between the results that both models achieved and Santander Corporate & Investment Banking estimates and target price for DAI fair value.
- Does quality matter (in emerging countries)? : a cross-country analysis of different quality-based trading strategies and the evaluation of the price of quality with a focus on emerging marketsPublication . Behringer, Ann-Kathrin Petra; Martins, José Carlos TudelaGiven the theoretical foundation, as well as empirical support from previous studies, especially by Asness, Frazzini and Pedersen (2019), this research examines the effect of firm quality on scaled prices. The research is conducted using a sample of developed markets, as well as developing markets. The price of quality is significant across developed and developing markets. The second part of this research establishes a trading strategy of going long in high-quality firms and shorting low-quality firms. The strategy yields significant, positive alphas across all countries but is subject to large tail risks, combining this strategy with other factor strategies, improves risk-adjusted returns and greatly reduces tail risks. The quality factor is found to be more pronounced in developing markets.
- Delta Air Lines valuationPublication . Monteiro, Catarina Oliveira; Martins, José Carlos TudelaDelta Air Lines is a company within the airlines industry, mainly operating with the transportation of people and cargo. The purpose of my thesis is to achieve the Enterprise value of Delta Air Lines, by applying different Firm Valuation methodology. With this, it is expected to give a formal opinion on the company’s shares. The chosen methodologies to perform the valuation model was the Discounted Cash Flows valuation (DCF) and the Multiples model. The DCF valuation was based on four main assumption: number of seats available, number of miles travelled, number of passengers and number of planes. For the Multiples valuation, the information from similar companies within the same industry was used, with the purpose of serving as benchmarked to the DCF model. In the end, the models created were compared with two different investments reports (Raymond James’ e Cowen’). This comparison yield that all models analysed reached similar share price between $64 to $67. Since the company’s shares are currently valued as $56, there is a favourable opinion to buy Delta Air Lines market share.
- Escola e desporto : uma análise reflexiva sobre os contributos da actividade desportiva no desenvolvimento nos jovens estudantesPublication . Silva, Elizabete Abreu da; Estêvão, Carlos Alberto VilarO presente trabalho resulta do exercício de reflexão sobre o papel do docente na área de Educação Física ao longo de vinte e três anos na Escola 2 e 3 ciclos Cónego João Jacinto Gonçalves de Andrade - Campanário, Região Autónoma da Madeira. A exposição do seu conteúdo divide-se em duas partes fundamentais: na primeira descreve-se e caracteriza-se o processo dos modelos organizacionais da escola: modelo burocrático e político. Para tal, considera-se a realidade e contexto em que a escola se inscreve. Aborda-se também, a temática do Desporto como meio para desenvolver os valores no meio escolar. Na segunda parte, após a caracterização da escola, estabelece-se uma relação entre a operacionalização dos valores desportivos no meio escolar (segundo a nova flexibilidade curricular); faz-se referência às actividades desenvolvidas pela docente e realiza-se uma reflexão sobre a sua acção enquadrada nas dimensões indicadas pelo Decreto-Lei nº55/2018, que define o perfil do aluno. Aqui destaca-se os aspectos relativos ao processo de transmissão de valores fundamentais para a melhoria do desempenho dos alunos, tendo em conta a sua dimensão cientifica e pedagógica e a dimensão de participação nas actividades da escola e comunidade local, num processo que se pretende de formação contínua e de desenvolvimento pessoal de cada um deles.