• Australian (ASX) Stock Market Forum

Hello and welcome to Aussie Stock Forums!

To gain full access you must register. Registration is free and takes only a few seconds to complete.

Already a member? Log in here.

Year 11 Economics assignment suggestions wanted

Discussion in 'Business, Investment and Economics' started by DocK, Apr 29, 2014.

  1. DocK

    DocK

    Posts:
    841
    Likes Received:
    3
    Joined:
    Jan 29, 2009
    Hi all,

    My son has an upcoming assignment in Eco which is basically to compare and contrast two blue chip companies in the same sector: explain the industry, analyse the recent share price action based on fundamentals and evaluate which of the two would be better to add to a long-term investment portfolio based on fundamental criteria. He initially went for the obvious CBA/WBC, but took my advice that they were really quite similar and he may be better to find two companies with different trends. He's now thinking WES/WOW, but I reckon TLS/TPM or STO/WPL would be much easier to find differences in and be able to very clearly find differences in their major fundamental ratios. What do the experts think???
     
  2. sydboy007

    sydboy007

    Posts:
    3,622
    Likes Received:
    1
    Joined:
    Dec 10, 2012
    BHP / RIO would be a good alternative. Plenty to write about with BHPs thesis on the various resources they sell and how they help to level out revenues through economic cycles, which also helps them to continue to invest through the cycle, contrasting with the one trick pony of RIO that's an iron ore company with a few add ons.
     
  3. skc

    skc Goldmember

    Posts:
    8,259
    Likes Received:
    282
    Joined:
    Aug 12, 2008
    Some businesses are easier to understand than others. Banks are somewhat difficult with concepts like interest margin to grasp. STO/WPL is also trickier with their reserve pricing vs future production etc. WES/WOW is a good comparison but WES has all other lines of businesses so you are not comparing directly Coles vs Woolies.

    For simple, easy to understand pairs I suggest:
    JBH vs another retailer (e.g. HVN, MYR, SUL etc)
    WOW vs MTS (definitely a lot of contrast)
    TPM vs IIN (simpler than TLS but still a household name)
    REA vs CRZ (more to learn than a plain retailer)
    RHC vs SHL vs PRY, TTS vs TAH, CWN vs EGP (just for something different)

    But if your son wants a real challenge then something in the financials sector (like QBE vs IAG) should be fun.
     
  4. McLovin

    McLovin

    Posts:
    5,341
    Likes Received:
    222
    Joined:
    Jun 2, 2011
    WES/WOW is good because at least your son will be able to relate to it on some level. On the other hand, WES has a lot of moving parts, so it might be a bit challenging. I'd steer well clear of banks and insurance because even analysts don't really understand them.

    How about NEC v TEN? Fairly straight forward companies. Or a really easy one would be say PPT v PTM. Some others, REA v CRZ, DJS v MYR...
     
  5. DocK

    DocK

    Posts:
    841
    Likes Received:
    3
    Joined:
    Jan 29, 2009
    Thanks guys for those ideas. It looks like the entire assignment is only about 1500 words, so he probably doesn't have to go into too much depth, just explaining the basic fundamental ratios and what may have caused them to change over the recent past.

    HVN/JBH and MTS/WOW are two pairs that I'd suggested also. I think he's restricted to just a few sectors, and Health wasn't included. I think they're steered towards companies in the ASX50 also - probably for the teacher's convenience. Don't know why - maybe they think they're a bit too complicated. I recall my older son did RIO/FMG a couple of years ago, but there's another pair to consider.
     
  6. DocK

    DocK

    Posts:
    841
    Likes Received:
    3
    Joined:
    Jan 29, 2009
    Asked my son this morning what he finally decided on, and he's decided to go with NCM and BHP as there will be plenty of info available on both and he can compare a pure gold company with a diversified materials one, both in the same sector if not same industry. Should be an opportunity to mention the affect of management on fundamentals as well, one would think. Thanks again to those that offered suggestions. He reckons his teacher is looking for them to make the obvious links between fluctuations in the price of the underlying commodity (gold vs iron ore/copper etc) and the company concerned, as well as comparing P/E, ROE etc. I think he's gone for the obvious and easy choice, and could have been a bit more creative - but Mums always seem to expect their teenagers to do what they'd do themselves, and teenage sons seem to want to go with the option that will require less time and effort to fulfill the task. Funny that.....
     
Loading...

Share This Page