Analysis of Australian and Foreign Stocks: Portfolio Performance

This report analyzes the performance of a stock portfolio comprising two Australian multinational corporations (Woolworths Group and Wesfarmers Ltd) and two foreign stocks (Credible Labs Inc. and Tower Limited) listed on the Australian Securities Exchange (ASX) over an eight-week period. The analysis includes weekly percentage changes in stock prices, identification of primary reasons for price fluctuations, and a comparison of portfolio performance against the ASX200. The report examines the impact of the Australian market on the Australian-based MNCs and the influence of the respective foreign markets on the foreign stocks. Furthermore, it investigates the correlation between foreign stock prices and the effect of foreign currency exchange rates on the performance of Australian and foreign companies. The conclusion summarizes the key findings, highlighting the factors affecting stock performance and the influence of market and currency exchange rates.

Running head: STOCK ANALYSIS OF AUSTRALIAN BASED MNC
STOCK ANALYSIS OF AUSTRALIAN BASED MNC
Name of the Student:
Name of the University:
Author Note

1STOCK ANALYSIS OF AUSTRALIAN BASED MNC
Table of Contents
Introduction................................................................................................................................2
Evaluation..................................................................................................................................3
1. A Weekly percentage change.................................................................................................3
Portfolio Performance................................................................................................................6
Effect of Australian market in Australia based MNCs..............................................................6
Effect of respected foreign market in the foreign stocks...........................................................7
Correlation between the foreign stock prices.............................................................................8
Effect of Australian market in the foreign stocks......................................................................9
Effect of foreign currency exchange rate in Australian companies...........................................9
Effect of local currency exchange rate in foreign companies..................................................10
Conclusion................................................................................................................................11
References................................................................................................................................12

2STOCK ANALYSIS OF AUSTRALIAN BASED MNC
Introduction
The report is prepared to analyse the performance of the four multinational
company, which are listed in the Australian Security Exchange. The two out of four
companies are the Woolworths Group and the Wesfarmers Ltd; both are Australian based
multinational companies. The third company is Credible labs Inc., that is an United States of
America based company. The last one is from the New Zealand named Tower Limited. The
both foreign companies are listed in the Australian Security Exchange. The report prepared
the portfolio of all the four companies for eight weeks from 22nd of March up to 3rd of May.
This paper analysis the performance of all selected companies and report the changes in the
share price in the end of the each week. This also compare the performance of all the four
chosen companies to the performance of ASX200 (Grinold 2018). Lastly, this tries to find out
the reason behind the change in the stock price of all companies and evaluate the foreign
exchange rate’s effect in their performance.
Australian Based MNC
Name of company Ticker symbol Amount of
Investment
Price per share at
purchase (22
March 2019)
Woolworths Group
Limited
WOW A$ 10,000 A$ 30.51
Wesfarmers Limited WES A$ 10,000 A$ 34.80
Foreign stock (ADRs)
Name of company Ticker symbol Amount of
Investment
Price per share at
purchase (22
March 2019)
Tower Limited TWR A$ 10,000 A$ 0.69
Credible Lab Inc. CRD A$ 10,000 A$ 1.045

3STOCK ANALYSIS OF AUSTRALIAN BASED MNC
Evaluation
Weekly percentage change
Week 1 ended on 22nd March 2019
Name of Company Stock price at end
of the week
Percentage change
in stock
Primary Reason
1. Woolworths
Group
Limited
A$ 30.51 0.9% Increase in
profitability
2. Wesfarmers
Limited
A$ 34.80 0.7% Increase in
profitability
3. Tower
Limited
A$ 0.69 4.55% Starting new project
4. Credible Lab
Inc.
A$ 1.045 -6.70% Financial crises
Portfolio (average) A$ 16.76 -0.54%
Week 2 ended on 29th March 2019
Name of Company Stock price at end
of the week
Percentage change
in stock
Primary Reason
1. Woolworths
Group
Limited
A$ 30.40 -0.36% Recession in
respective Market
2. Wesfarmers
Limited
A$ 34.65 -0.43% bids A$ 1.1 Billion
for rare earth miner
Lynas
3. Tower
Limited
A$ 0.665 -3.62% Recession in
respective Market
4. Credible Lab
Inc.
A$ 1.10 5.26% Insider increase in
their holdings
Portfolio (average) A$ 16.70 O.21%

4STOCK ANALYSIS OF AUSTRALIAN BASED MNC
Week 3 ended on 5th April 2019
Name of Company Stock price at end
of the week
Percentage change
in stock
Primary Reason
1. Woolworths
Group
Limited
A$ 30.40 0.00% - - - - -
2. Wesfarmers
Limited
A$ 34.21 -1.27% bids A$ 1.1 Billion
for rare earth miner
Lynas
3. Tower
Limited
A$ 0.69 3.76% Increase in demand
4. Credible Lab
Inc.
A$ 0.99 -10.00% Recession
Portfolio (average) A$ 16.57 -1.88%
Week 4 ended on 12th April 2019
Name of Company Stock price at end
of the week
Percentage change
in stock
Primary Reason
1. Woolworths
Group
Limited
A$ 31.00 1.97% Growth in
Australian retail
market
2. Wesfarmers
Limited
A$ 34.73 1.52% Growth in
Australian retail
market
3. Tower
Limited
A$ 0.66 -4.34% Delay in project
4. Credible Lab
Inc.
A$ 1.00 1.01% Stable market
condition
Portfolio (average) A$ 17.85 0.04%
Week 5th ended on 18th April 2019
Name of Company Stock price at end
of the week
Percentage change
in stock
Primary Reason
1. Woolworths
Group
Limited
A$ 31.22 0.71% Sales increased
2. Wesfarmers
Limited
A$ 34.99 0.75% Sales increased
3. Tower A$ 0.67 1.52% Recovery

5STOCK ANALYSIS OF AUSTRALIAN BASED MNC
Limited
4. Credible Lab
Inc.
A$ 1.015 1.50% Efficiency in the
business operation
Portfolio (average) A$ 16.97 1.12%
Week 6 ended on 26th April 2019
Name of Company Stock price at end
of the week
Percentage change
in stock
Primary Reason
1. Woolworths
Group
Limited
A$ 31.99 2.47% highest sale recorded
in this quarter
2. Wesfarmers
Limited
A$ 35.99 2.86% Hike in Australian
market
3. Tower
Limited
A$ 0.685 2.24% Starting of new
projects
4. Credible Lab
Inc.
A$ 1.11 9.36% Favourable business
condition
Portfolio (average) A$ 17.44 4.23%
Week 7 ended on 3rd May 2019
Name of Company Stock price at end
of the week
Percentage change
in stock
Primary Reason
1. Woolworths
Group
Limited
A$ 32.84 2.66% Huge sale registered
yesterday.
2. Wesfarmers
Limited
A$ 36.37 1.06% Increase in demand
3. Tower
Limited
A$ 0.73 6.57% Increase in sales
4. Credible Lab
Inc.
A$ 1.55 39.64% New project
undertaken
Portfolio (average) A$ 17.87 12.48%

6STOCK ANALYSIS OF AUSTRALIAN BASED MNC
Portfolio Performance
As per the weekly performance of the portfolio, it can be seen that all the stocks
performed well in the seven week. The Wesfarmers and Woolworths Group showed the
growth of 1% in an average in last seven week, the Tower Ltd showed the growth of 2%
while the Credible Lab Inc. shown the growth of 6% in average. The overall portfolio shown
the growth of 2% in last seven weeks (Chandra 2017).
Effect of Australian market in Australia based MNCs
Woolworths Group Limited
In the basis of the above graph, it can be said that Australian market does not have
major influence in the Woolworths performance as the Australian market does not show
much ups and down but the Woolworth does in the last three months.

7STOCK ANALYSIS OF AUSTRALIAN BASED MNC
Wesfarmers Limited
The performance of the Wesfarmers is effected by the performance of the Australian
market in some context (Jordan et al 2015). As the performance graph of both the performer
is parallel hence the performance of Wesfarmers is depends on the performance of Australian
market.
Effect of respected foreign market in the foreign stocks
Tower Ltd.
In the basis of the above, it can be observed that the performance of the Tower Ltd is
affected by the performance of their base country that is New Zealand (Guerard Jr et al

8STOCK ANALYSIS OF AUSTRALIAN BASED MNC
2015). As it the graph New Zealand and the Tower Ltd is shows the ups and down in the
same period.
Credible Lab Inc.
In the basis of the above chart, this is very clear that there is no impact of the
American market in the performance of the Credible Lab Inc. As the performance of the
American is flat while Credible Lab Inc. shown the continues growth in the performance.
Correlation between the foreign stock prices

9STOCK ANALYSIS OF AUSTRALIAN BASED MNC
As it can be seen that difference between performances of both the companies is huge
hence, there is no chance of any co relation between the both. Yes, the both started from the
same place in the same direction and still both shown the growth in the same time yet the
both are the two different poles.
Effect of Australian market in the foreign stocks
The above graph shows that the Australian market does not affect the performance of
the Credible Lab Inc. (Beckmann and Czudaj 2017). Although, this slightly affected the
performance of the Tower Ltd as the booth are trading in the same base line.
Effect of foreign currency exchange rate in Australian companies

10STOCK ANALYSIS OF AUSTRALIAN BASED MNC
The New Zealand is the largest market of Woolworths as well as the Wesfarmers. As
we can see there is lots of ups and down in the currency exchange rate hence, yes it affect the
performance of the firm.
Effect of local currency exchange rate in foreign companies
Tower Ltd.
Just like the Woolworths and Wesfarmers, the Tower Ltd is a New Zealand based
company hence the exchange rate also effect the performance of the firm.
Credible Lab Inc.
The USD is one of the strongest currency of the world hence the foreign trading
company of America is deeply affected by the exchange rate.

11STOCK ANALYSIS OF AUSTRALIAN BASED MNC
Conclusion
The paper concludes that all four stocks of the portfolio is preforming well. The
Australian market does not affect the performance of the foreign companies but the local
market affects the performance of the companies. Lastly, the foreign trading company have
the influence of the currency exchange rate in their business.

12STOCK ANALYSIS OF AUSTRALIAN BASED MNC
References
Albinowski, M., Hagemejer, J., Lovo, S. and Varela, G., 2016. The role of exchange rate and
non-exchange rate related factors in polish firms' export performance. The World Bank.
Beckmann, J. and Czudaj, R., 2017. Exchange rate expectations since the financial crisis:
Performance evaluation and the role of monetary policy and safe haven. Journal of
International Money and Finance, 74, pp.283-300.
Chandra, P., 2017. Investment analysis and portfolio management. McGraw-Hill Education.
Chandra, P., 2017. Investment analysis and portfolio management. McGraw-Hill Education.
Grinold, R., 2018. Nonlinear Trading Rules for Portfolio Management. The Journal of
Portfolio Management, 45(1), pp.62-70.
Guerard Jr, J.B., Markowitz, H. and Xu, G., 2015. Earnings forecasting in a global stock
selection model and efficient portfolio construction and management. International Journal
of Forecasting, 31(2), pp.550-560.
Jordan, B.D., Miller, T.W. and Dolvin, S.D., 2015. Fundamentals of investments: valuation
and management. McGraw-Hill Education.