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    Portfolio Construction

    Uploaded by

    john mwega
    The document discusses portfolio construction strategies during the pandemic. It recommends choosing small and mid cap stocks with low P/E ratios to have growth potential. It also notes that inflation can significantly impact returns. As an example, it examines Motorpoint Group, a UK car retailer. It notes the company's low P/E ratio of 14.4 and beta of 0.121, indicating low volatility. Other financial metrics like debt-to-assets of 25.7% and market cap of £124.5 million are also mentioned. Correlating individual stock betas to market indexes is recommended.

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    Portfolio Construction

    Uploaded by

    john mwega
    8 views2 pages
    The document discusses portfolio construction strategies during the pandemic. It recommends choosing small and mid cap stocks with low P/E ratios to have growth potential. It also notes that inflation can significantly impact returns. As an example, it examines Motorpoint Group, a UK car retailer. It notes the company's low P/E ratio of 14.4 and beta of 0.121, indicating low volatility. Other financial metrics like debt-to-assets of 25.7% and market cap of £124.5 million are also mentioned. Correlating individual stock betas to market indexes is recommended.

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    The document discusses portfolio construction strategies during the pandemic. It recommends choosing small and mid cap stocks with low P/E ratios to have growth potential. It also notes that inflation can significantly impact returns. As an example, it examines Motorpoint Group, a UK car retailer. It notes the company's low P/E ratio of 14.4 and beta of 0.121, indicating low volatility. Other financial metrics like debt-to-assets of 25.7% and market cap of £124.5 million are also mentioned. Correlating individual stock betas to market indexes is recommended.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    8 views2 pages

    Portfolio Construction

    Uploaded by

    john mwega
    The document discusses portfolio construction strategies during the pandemic. It recommends choosing small and mid cap stocks with low P/E ratios to have growth potential. It also notes that inflation can significantly impact returns. As an example, it examines Motorpoint Group, a UK car retailer. It notes the company's low P/E ratio of 14.4 and beta of 0.121, indicating low volatility. Other financial metrics like debt-to-assets of 25.7% and market cap of £124.5 million are also mentioned. Correlating individual stock betas to market indexes is recommended.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 2

    Portfolio construction

    I choose a low P/E ratio for small & mid cap to have the potential to growth through the pandemic
    so many large investor sell the companies that have a low p/E ratio and small cap as well inflation
    rate has huge impact over the return, with low return for the period of time it’s not match the
    investor expectation . in this scenario the low P/E ratio with some wised choose the asset will have
    portfolio have some growth over the five years and the strategy will change passed on the new
    event that hits the market .

    Index = ASX FTSE ALL

    1) Choose the sector & stocks ( I should write why ? )


     Consumer discretionary
    1) Motorpoint group / ticker No. MOTR LN
    i. The P/E ratio is 14.40 which close to the high number
    ii. The stock Raw BETA: 0.121 which is very low beta means save asset
    iii. The company turnover 8.2 A/R Trnovr 126.9
    iv. Debt/Assets 25.7% which is reasonable
    v. Mkt Cap 124.5 m means small market cap

    2) Choose the stocks why ?

    Motorpoint group / ticker No. MOTR LN write about the company and the service

    3) Should to correlation for the stock beta compere to FETS all index
    Note :

    Beta
    https://www.investopedia.com/terms/b/beta.asp#:~:text=A%20beta%20that%20is%20greater,betas
    %20than%20the%20market%20benchmark.

    https://www.investopedia.com/investing/beta-gauging-price-fluctuations/

    https://guides.lib.byu.edu/c.php?g=216390&p=1428678#:~:text=What%20is%20Beta%3F%3F,is
    %20calculated%20using%20regression%20analysis.

    A beta of 1 indicates that the security's price is expected to move exactly with the market.

    A beta greater than 1 indicates that the security's price is expected to be more volatile than the
    market.

    A beta of less than 1 indicates that the security's price is expected to be less volatile than the
    market.

    You can think of beta as the tendency of a security's returns to respond to swings in the market. For
    example, if a stock's beta is 1.2, then it is theoretically 20% more volatile than the market.

    Market cap

    https://www.degiro.co.uk/knowledge/investors-academy/beginners-lessons/market-cap

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