FINA6000 Managing Finance: Investment Analysis of Qantas & WOW

This presentation provides a financial analysis of Qantas and Woolworths stocks, examining their risk and return profiles and the impact of COVID-19 on their businesses. The analysis includes a comparison of stock returns against the ASX 200 index, highlighting Woolworths' outperformance. It delves into the operational challenges faced by Qantas due to travel bans and the surge in demand experienced by Woolworths for essential goods. The presentation also assesses the beta values of both stocks to gauge systematic risk and concludes with an investment recommendation favoring Woolworths due to its strong fundamentals and resilience to economic factors. References to external sources like Yahoo Finance and The Guardian support the analysis and findings.

Managing Finance
Qantas and Woolworths

Title and Content Layout with List
• Risk and Return Analysis
• Impact of COVID-19
• Investment Recommendations

Share Price Return of ASX 200, WOW & Qantas.
12/2/2019
12/5/2019
12/8/2019
12/11/2019
12/14/2019
12/17/2019
12/20/2019
12/23/2019
12/26/2019
12/29/2019
1/1/2020
1/4/2020
1/7/2020
1/10/2020
1/13/2020
1/16/2020
1/19/2020
1/22/2020
1/25/2020
1/28/2020
1/31/2020
2/3/2020
2/6/2020
2/9/2020
2/12/2020
2/15/2020
2/18/2020
2/21/2020
2/24/2020
2/27/2020
3/1/2020
3/4/2020
3/7/2020
3/10/2020
3/13/2020
3/16/2020
3/19/2020
3/22/2020
3/25/2020
3/28/2020
3/31/2020
-20.00%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
ASX200, WOW & QANTAS
ASX200 WPL CBA

Financial Analysis
• The financial analysis has been
well carried for Qantas Stock and
Woolworths Stock.
• Analysis of the Stock has been
done based on Risk and Return
generated.
• Impact of COVID-19 in business
has been analyzed.
Particulars ASX200 Qantas WOW
Mean Return -0.33% -0.9% -0.12%
Standard Deviation 2.6% 5.0% 2.5%
Beta 1.00 1.05 0.61
Sharp Ratio -0.13 -0.17 -0.05
Expected Return -0.3% -0.9% -0.1%
Rf 0.002% 0.002% 0.002%

Mean Risk and Standard Deviation
• Market Return for ASX 200 Index
was -0.33% and SD was 2.6%.
(Yahoo Finance, 2020).
• Stock Return for Qantas was -
0.9% and SD was 5.0%
• Stock Return for Woolworths was
-0.12% and SD was 2.6%
• Mean Return: -0.33%
• Standard Deviation: 2.6%
ASX 200 Index
• Mean Return: -0.90%
• Standard Deviation: 5.0%
Qantas Stock
• Mean Return: -0.12%
• Standard Deviation: 2.5%
Woolworths Stock

Impact of COVID-19

Impact of COVID-19 on Business
Qantas Stock
• All the operations of the company
has been kept on a halt on
temporary basis.
• The company has closed all its
Airport Lounge and Air-services
due to the impact of COVID-19.
Woolworths Stock
• After the Outbreak of COVID-19,
the demand for essential goods
and services such as FMCG
increased rapidly.
• Retail Companies like
Woolworths are facing excess
demand for goods and services
while customers flock in stocking
up of goods.

Business Operations and Industry Perspective
• The business operations and industry of Airlines sector has been impacted majorly as
travel bans comes for international travel and all.
• The only business operations that the Qantas company is currently operating with is
with the movement of essential goods and services.
• On the other hand, Retail Companies like Woolworths have faced a huge short-supply
due to excess demand that has been recently8 whereby consumers are pilling up goods
on the fear of COVID-19.
• Retail Companies like Woolworths have seen a major surge in their business
operations and trying their level best for making necessary goods available.

Risk and Return Metrics
• The return generated by the WOW Stock has allowed the company to outperform both the
Qantas Stock and ASX 200 Index.
• The risk associated with the WOW Stock has been comparatively way lower than Market Index
and Qantas Stock (Yahoo Finance, 2020).
• Beta has been well assessed for both the stocks in order to asses the systematic risk of the
stock. The beta for the Qantas Stock was 1.05 times and was 0.61 times for WOW Stock.

Future Outlook
• The impact of COVID-19 has impacted not only business, but has shocked the economy into
a global recession whereby companies and organisations would be finding it hard to well
report a sound business profits (Butler, 2020).
• The sustainability in the growth of the various business and industries has been disrupted.
• It is necessary that important government steps and actions are well taken in order to
revive the business confidence, but that is only possible after the pandemic disease is
eradicated.

References
• Yahoo Finance. (2020). Retrieved 11 April 2020, from
https://au.finance.yahoo.com/quote/WOW.AX/history?
period1=1574985600&period2=1585612800&interval=1d&filter=history&frequency=1d
• Butler, B. (2020). Coronavirus has delivered a hammer blow to Australia's economy. What
happens next?. Retrieved 11 April 2020, from
https://www.theguardian.com/business/2020/mar/21/coronavirus-has-delivered-a-
hammer-blow-to-australias-economy-what-happens-next
• Coronavirus (COVID-19) and the Impact on Retailers, Digital Travel, Ecommerce in China
and the US. (2020). Retrieved 11 April 2020, from
https://www.emarketer.com/content/coronavirus-china-us-covid-19-impact-retail-travel
• Yahoo Finance. (2020). Retrieved 11 April 2020, from
https://au.finance.yahoo.com/quote/QAN.AX/history?p=QAN.AX&.tsrc=fin-srch

Investment
Recommendation
• The stock of Woolworths has not only
sound potential, strong fundamental
and business activities would be
helping achieve better results.
• Impact of COVID-19 is not likely to
affect much.
• The operations of the company is
primarily into providing FMCG goods
which on an year cycle are unaffected
due to economic or social factors.
Buy: Woolworths Company Stock