This is a long-term investment project aimed at identifying Covid-19 vaccines that have strong potential for sustained growth. The project involves analyzing historical data spanning two years, calculating performance measurements, conducting back-testing, forecasting, and utilizing the Capital Asset Pricing Model. Various trading strategies will be tested in order to identify stocks with the lowest risks and highest returns.
To perform the analysis, income, balance, and cashflow statements, as well as historical price data, will be utilized using tools such as Excel, Python, Power BI, and Tableau for Stocks Analysis.
Profitability Ratio - financial metrics to evaluate the ability of a company to generate income (profit) relative to revenue, balance sheet assets, operating costs, and shareholders’ equity during a specific period of time. It shows how well a company utilizes its assets to produce profit and value to shareholders.
Operating Ratio – financial metrics to evaluate how well a company is using their assets.
Leverage Ratios – financial metrics to evaluate how much of an organization's capital comes from debt and it shows a solid indication of whether a business can make good on its financial obligations.
Valuation Ratios – financial metrics to evaluate how the relationship between the market value of a company or its equity and some fundamental financial metric (e.g., earnings).
Liquidity Ratios – financial metrics to evaluate how the company's ability to pay debt obligations and its margin of safety through the calculation of metrics including the current ratio, quick ratio, and operating cash flow ratio.
Ratio analysis is a quantitative method used to gain insights into a company's liquidity, operational efficiency, and profitability by studying its financial statements, such as the balance sheet and income statement. It serves as a cornerstone of fundamental equity analysis. Among the companies analyzed, BNTX exhibits the highest profitability ratio, the highest operating ratio, and the highest liquidity ratio. On the other hand, PFE demonstrates the highest leverage ratio, while JNJ has the highest valuation ratio. Based on ratio analysis, BNTX appears to be a good investment.
The income statement provides information about a business's profitability by showing the inflow and outflow of money over a specific period, such as a year or a quarter. The three most important components of an income statement are gross profit, operating expenses, and net earnings or net income. From 2019 to 2020, BNTX experienced a revenue increase of over threefold, with revenues rising from $108.59 million to $482.33 million. Similarly, MRNA witnessed a significant revenue surge from $60.21 million to $803.40 million during the same period. In contrast, JNJ and PFE remained relatively stable with minor revenue growth. Additionally, BNTX, JNJ, and MRNA consistently increased their total operating expenses each year. Although PFE's total operating expenses showed a declining trend, they increased in 2020 compared to the previous year. In 2019, BNTX reported a net income of $15.20 million, JNJ had a net income of $14.4 million, MRNA incurred a net loss of -$747.06 million, and PFE achieved a net income of $9.6 million.
The balance sheet, also known as a "statement of financial position," provides information about a company's assets, liabilities, and owners' equity (net worth). The significant components of a balance sheet include cash, accounts receivable, short-term investments, property, plant, equipment, and major liabilities.
The cash flow statement (CFS) comprises three main components: cash from operating activities, cash from investing activities, and cash from financing activities. The operating section of the cash flow statement concludes with the net cash provided (used) by operating activities and is considered the most crucial part of the statement.