• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month


Extracts from this document...


Stock Analysis - Consumer Discretionary Sector SONY CORPORATION INTRODUCTION Sony Corporation aims to create new value based on the linked concepts of "inspiration" and "shared experience" and to thus strengthen products and applications. However, after analyzing the relevant market of Consumer Discretionary, Sony financials, Sony's future risk, Sony's future growth and their competition, buying stock at this time during an economic recession could be very risky. This paper is intended to help guide individuals through their crucial decision making process of purchasing and selling stock. RELEVANT MARKET The Consumer Discretionary Sector of the market, which Sony Corporation is a part of its consumer goods sector, includes those industries that tend to be the most sensitive to economic cycles. The manufacturing segment includes automotive, household durable goods, textiles & apparel and leisure equipment. The services segment includes hotels, restaurants and other leisure facilities, media production and services, and consumer retailing and services. Currently the Consumer Discretionary sector makes up 9.98 percent of the total market. Illustrated below is a visual of the year S&P 500 index vs. the Consumer Discretionary sector: (Fidelity Investments) As shown, the Consumer Discretionary sector is positively correlated with the S&P 500. Year to date through November 20, the sector index, which represented 9.98 percent of the S&P 500 Index, was up 33.2 percent compared with a 20.8 percent rise for the S&P 500. The economy however is in a recession and even though the sector is positively correlated with the S&P 500 now the longer the recession last this sector will begin to show negative effect. ...read more.


4. Their ability and timing to recoup large-scale investments required for technology development. 5. Their ability to implement successfully its networking strategy for its Electronics, Game and Pictures segments 6. Their ability to secure adequate funding to fiancé restructuring activities and capital investments given the current state of the global markets 7. The outcome of pending legal and regulatory proceedings 8. The impact of unfavorable conditions in the Japanese equity markets on the revenue and operating income of the Financial Services segment. FUTURE GROWTH Sony Corporation has announced a series of measures designed to improve its profitability and drive future growth in response to the deterioration of the global economy. There are three areas which Sony would like to focus on. First, structurally reform Sony's core electronics operations to better compete with its best in class peers in terms of speed to market and profitability. Second, continue margin improvement activities to lessen the impact of the weak economic profile of key markets. And third, accelerate the integration between products and network services by leveraging the combined strengths of Sony's electronics and computer entertainment operations. With the changes above in mind Sony Corporations expectation for future growth is broken down by the four segments of Sony: Electronics, Game, Pictures and Financial Services. To begin, the Electronic segment does not have sight for future growth. It's expected that a decrease in sales is expected mainly due to the continuing weakness in the business environment and the impact of the appreciation of the yen against the U.S. ...read more.


Also the 52-week high and low has a difference of $15.18. This wide different in price illustrates that Sony Corporation is not stable. Sony Corporation has had a constant decrease in stock price due to the recession and competition therefore; the Lancer Student Investment fund should take a hit and sell their 150 stocks at the current price. Selling these shares will open up the opportunity to purchase shares in different sectors of the market. Ideally recession proof sectors such as: Health Care, Utilities and Consumer Staples. CONCLUSION Sony Corporation's transformation will not be a one-time restructuring, but rather an ongoing process of driving growth, efficiency and innovation across their businesses. With improved operating performance and cash flow, a lighter asset base and a stronger software and network infrastructure, we will be in a solid position to strengthen our core businesses while offering new alluring products that will beckon to our customers. However, the forecast of future growth for Sony Corporation is based on management's current expectations and is subject to uncertainties and changes. The Consumer Discretionary sector is highly sensitive and should benefit from a gradual economic recovery although the lingering uncertainty regarding the slope of the recovery leaves the success of the Consumer Discretionary sector unknown. Therefore, as the recession continues and more jobs are lost the amount of money individuals choose to spend on unnecessary goods will decrease. The money that individuals do have will be spent on the necessities of everyday life which will hurt the Consumer Discretionary sector. So, depending on how risky an investor one is, selling Sony Corporation at this time could increase the portfolios return in the future. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Finance section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Finance essays

  1. A corporation has been defined as 'an ingenious device for obtaining individual profit without ...

    In light of the fact that many shares in companies are held by institutional investors who, unlike the individual shareholder, may be able to influence the policies enacted by those controlling the company due to the size of their shareholding.

  2. BAAF Accounting & Finance/ ACCA Professional Accountancy Course

    (100/ (20.3+16.2/2)) The capital expenditure to employees ratio gives us an insight into the level of investment, by the company, per employee. This has fluctuated from £1,103 in 2000, to £1,277 in 2001 and £1,023 in 2004. Tesco Capital Expenditure to Employees Year 2004 2003 2002 2001 2000 Capital Expenditure to Employees (£)

  1. Strategic & Decision Making of Sony Corporation

    Sony - derived from the Latin word sonus, which means sound, coupled with the English term 'sonny' referring to young boys of the 1950s - was chosen because it was simple, easy to read and could be pronounced in any language.

  2. Free essay

    Market Efficiency

    Therefore, all data or information is completely mirrored in a security's existing market price which in turn entails that even the company's administration would not be able to generate profits even by using the insider data they have. The justification for this is that the market expects in an impartial

  1. Capital Markets & Investments. This reports main aim is to experiment my knowledge upon ...

    6 www.computerweekly.com 7 www.computerweekly.com 8 www.flug-revue.rotor.com 9 en.wikipedia.org/wiki/British_Airways 3.1c Performance of Shares the two graphs below show the share price movements of British Airways during my project which started on the 2nd April 2007 (graph 1) and that ended on the 11th of May 2007 (graph 2).

  2. Universal Banking

    Many corporate become sick, as they were unprepared for strong competitive environment. Thus the FIs had also indulged in a liberal splurge of debt financing, in the optimistic expectation that liberalization would mean an improvement in prospects for industries. Thereafter FIs faced by a surge of NPAs.

  1. This group assignment of Financial Management will assess the positions financial performances for six ...

    5.2 The SWOT Analysis 5.2.1 Shangri-La Hotels (Malaysia) Berhad Strength * Uncommonly high service standards * Low turnover compare to industry * Strong brand name and company reputation Weakness * Losing market share to rivals * Unattractive compensation packages * Failure to understand cultural differences * Deviating toward a global

  2. A Comprehensive Study of Credit Control in Banking Industries With Special Reference to ICICI ...

    2. Cultivate a contact in the accounts-payable office. Speak to him or her personally and be thoroughly reasonable, but persistent. 3. If a customer makes an excuse, ask when you can expect to be paid. Suggest a payment on account and stress that you need cash too to pay your suppliers.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work