The Competition of Bac

Our team has select three stocks named APPL, BRO and BAC, which APPL means Apple Company; BRO stands for Brown & Brown Company and BAC is the Bank of America Corporation. Compared with the competitor, all these three companies have a better performance than the competitors and average data.

We first decide which stock to buy by calculating the numbers. For the apple, HPR=D1+P1-P0/P0=0.06345, the beta is 0.94, the CAMP is 0.0535, so the HPR> CAPM, It is underpriced. as data shown we can buy appl stock. And for Bro, THE HPR is 0.01016, the beta is 0.89, the CAPM is 0.05, so HPR>CAPM, so we can buy it, It is underpriced. The same with BAC, The HPR >CAPM. After calculating the data, we guess that the price for these three stocks will goes up, which make us to buy these stocks. At that time Apple is publishing new ipad, so the stock price is increasing.

Besides the basic numbers, news also influences both the price of the stocks and our decisions for which stocks to buy.

For the decisions we made, news influences the decisions we made a lots. Except the basic data we calculate, we also choose to buy or short the data beside news. we first expect that the stock price of APPL and BRO was increase while the price of BAC was decrease, so We bought APPL and BRO, while we choose to short BAC, because with publication of the IPAD3 will push the price of APPL go high immediately and the tendency of BRO was smooth increase in last few months, and the reason why we short the BAC is the price of BAC stock was accident high and may go down since there was no good news come out.

For influences the price of stocks, positive news will increase the piece of stocks while negative news may pull down the price of the stocks. Like our three companies, APPL have a big increase from Feb. to the middle of Apr. because the IPAD 3 came out, however it decrease after that since many people returned the IPAD 3. BRO also have a dramatic increase seems the news said the sales share of BRO increase. And BAC have a huge increase on Mar, because a new service has push out, and got lots good evaluation from this.

APPL Graph

BRO Graph

BAC Graph

Above is the graph of our three stocks, and finally, these stocks finally goes the same tendency to what we expect.