Investing in the orthopedic implant industry.
Selezneva, Alina (2012)
Selezneva, Alina
Arcada - Nylands svenska yrkeshögskola
2012
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-201205117645
https://urn.fi/URN:NBN:fi:amk-201205117645
Tiivistelmä
This thesis provides an analysis of investment into ordinary shares of the leading orthopedic implant manufacturers including Zimmer, Stryker, and Smith&Nephew traded on the New York Stock Exchange. The aim of the study is to identify the leading company in terms of profitability for an investor. The author first constructs the theoretical framework based on investigation of the secondary literature and further conducts the primary research by applying the formulas in the particular context. Therefore, by applying two techniques, the Financial Ratio Analysis which provides an insight into the past performance of the companies and the Altman Z-score which assesses the probability of corporations going bankrupt within the next 20 months the companies are compared to each other. For the purpose of evaluating the particular investments, Return on Investment, and Internal Rate of Return formulas are applied. The timeframe for the analyses is 2006-2010.
The results show that if the shares were bought in 2006 and sold in 2010 it would be a wealth-destroying affair because the price of the shares dropped significantly during, and after the financial crisis which affected the world in 2007. However, notwithstanding the negative effect of financial crisis and recession, investment into ordinary shares of orthopedic implant manufacturers is considered profitable in the long-run because the net sales are constantly increasing and are projected to be increasing due to increase in demand affected by the population ageing. The investor has to keep track of the share prices: buy at the downturn and sell at the peak.
The results show that if the shares were bought in 2006 and sold in 2010 it would be a wealth-destroying affair because the price of the shares dropped significantly during, and after the financial crisis which affected the world in 2007. However, notwithstanding the negative effect of financial crisis and recession, investment into ordinary shares of orthopedic implant manufacturers is considered profitable in the long-run because the net sales are constantly increasing and are projected to be increasing due to increase in demand affected by the population ageing. The investor has to keep track of the share prices: buy at the downturn and sell at the peak.