These are projects posted by the students of Dr. Gove Allen at Brigham Young University. These students have taken one semester-long course on VBA and generally have had no prior programming experience

Thursday, December 10, 2015

Locating Your Stock on a Bell Curve - Stock Skywalk



The Problem:
I worked for a hedge fund that managed around $20 million, which they invested into stocks and bonds.  This hedge fund insisted that Morningstar and Bloomberg had too many errors in their financial data.  Therefore, the hedge fund required analysts to manually input the financial statement data. The manual input process could take 3-5 hours for any particular company, and the manual input often had errors as well.
For promising investment opportunities, the hedge fund would analyze comparable investments to ensure the subject company was superior to peers.  This process required the input of additional data for the comparison companies.   The hedge fund often looked for the same desirable performance indicators from the financial data.  The repetitive nature of this work makes it a prime candidate for automation.
                                                                                  The Solution:
The goal was to create a tool that takes the ticker entered, finds relevant comparable companies, and downloads all the financial data for those companies.  The tool then ranks those companies in comparison to each other—this allows the user to ‘walk above’ hundreds of ratios for each company and quickly make decisions.
The program I created is called Stock Skywalk.  The program downloads financial data from Morningstar and the SEC website.  The program creates a normal distribution of similar companies, and ranks them compared to each other.  The data is then displayed using graphs and a familiar grading system that allows users to visually see the end results after barely one minute.

Stock Skywalk uses Morningstar to select 5-20 comparable companies for the ticker entered. Each company is ranked based on 27 ratios.  The program creates a normal distribution based on the sample of companies, and ranks each company on each metric.  The individual metric scores are then combined for a total score for each company.  

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