Identifying the Companies to Invest- catching the technological waves

Introduction:

Strategic PR is a Canadian firm, working successfully for over 7 years in the industry. It has

been to able to capture large audience with its excellent services. The customer’s survey found it

to be a trustworthy and best service provider company in the industry. By building long- term

relations with customer, it has high ratio of customer retention. Along with being the first choice

for customers; Strategic PR also maintains an investment portfolio and seeks to use its earning to

expand. Thus, three partners of company: Mr. David, Mr. Harvey and Ms. Becker requested to

analyze the best companies for investment; keeping in view the on-going technological waves.

To achieve this purpose, I conducted research on the number of companies. Owing to the current

technology advancement; some of the factors were taken into consideration for future reference

such as clean energy, electrical vehicles, artificial intelligence; and some internal factors, SWOT

analysis, Porters 5 forces and ratio analysis. All these analysis helped in determining the top

choices to invest in the companies.

Factors Influencing the Future:

- Clean Energy: with the rise of climate change issue; the world is shifting to clean energy to

protect the environment

- Electrical vehicles: the carbon emissions from cars have been adding to the alarming

percentage of greenhouse gases- causing global warming at much faster rate

- Artificial intelligence: it is here to stay, from Facebook to Netflix all uses AI to know about

the user’s preferences and taste.

- Virtual world: Covid have taught one thing, that without online platform; even big business

can be destroyed. Online world is real and taking over the world.

Investment decision:

The golden rule of investment is to have a diversified portfolio; never put all your eggs in one

basket. Thus owing to above technological and also internal factors of the company; following

are three companies option to invest, not only for greater return, but for a safe investment future:

- Tesla Energy

- Netflix

Tesla:

Company Profile:

Tesla was founded in 2003 by engineers who before time shifted to electrical vehicles

production; owing to the current climate change crisis the world is facing. Now Tesla not only

make electrical vehicles, but also the clean energy generation and its storage products-solar

panels- moving towards a zero emission future. In order to ensure sustainable future, Tesla

manufactures energy solutions such as Powerwall, Powerpack, and Solar Roof. In order to

minimize the cost, Tesla have bring in battery cell production, producing equivalent to the

production goals. In 2020, Tesla surpasses General Motors and Ford to become the most

valuable automotive company in US.

SWOT analysis:

SWOT analysis plays important role in making investment decision; as it assists in

determining the future of firm from both and external environment.

 Strengths Weakness

- Strong brand image - Customer Affordability

- Energy Efficiency - Experimental and complex procedure

- Innovation

- Largest market share

Opportunities Threats

- Autopilot technology - Increase in competition: Mercedes,

- Asian Market development- increase in BMV- electrical vehicles manufacture

purchasing power - Increase in operating cost and decrease

- Clean energy focus in profitability margin

- Affordable cars manufacture - State regulations

Analyzing the company SWOT, the company have great opportunities and have also been

trying to adapt to new technological environment and political environment- moving to

zero-emission.

Ratio Analysis

Ratio analysis help inestors, creditors and management to understand company

performance and to make improvement. In order to make investment decision, we will be

reviewing profitability ratio of company:

 PROFITABILITY RATIOS (FY 2021)

Gross Profit Margin 32.14

EPS 1.44

Return on Equity 12.82

Sales Turnover 0.81

Analysis

Why should we buy TESLA stocks?

World is moving to zero-emission:

Countries are focusing to move towards eliminating greenhouse gases to overcome the global

warming effect. Cars are the major source of greenhouse gases emission- the smoke not only

effecting environment but also causing health deterioration. Tesla electrical vehicles is the future

and everyone is rooting for it.

Earning a stable profit:

Over the last few years, company is earning a good and stable profit- making investment secure.

Although the competition is increasing, but the company is also moving to advancement and

diversifying its operations to clean energy also.

Netflix:

Company Profile:

Netflix and Chill! One of the most heard phrase in last two years. Netflix is one of the biggest

entertainment platform with 214 million paid subscription in over 190 countries. It is a true
example of innovation, founded in 1997 as DVD renting service on mail; and then switching to

streaming platform- video on demand and then finally the online streaming website, ranking at

164th on the Fortune 500. Company is growing over the years- especially during pandemic time,

it has seen an upward shift in growth. Many believe that it was a short-term growth; however the

numbers says a different tale. The world has gone back to normal, but the number continues to

increase- due to the reason that generation and even how we want to have entertainment served

has changed. Netflix recently presented Netflix party allowing people to enjoy movie together

virtually. It has evolved the presence of cinema and entertainment.

SWOT analysis:

Strengths Weakness

- Strong brand image - Copyright issues

- Huge customer base- expansion - Easy imitation

continues - Pricing strategy might lead to loss

- Adaptability- Netflix party -

- Appropriate pricing strategy

- Greater offerings

- No interruption with commercials

Opportunities Threats

- Untapped markets such as Asia, Africa - Cyber crime

- Mobile streaming options - Imitation and competition

- Cooperation strategy to win greater - Government regulation

share
 - Niche marketing - Economy factors- high inflation

- Content production

Ratio Analysis:

PROFITABILITY RATIOS (FY 2021)

Gross Profit Margin 44.73

EPS 3.19

Return on Equity 32.98

Sales Turnover 0.67

Analysis:

Why should we invest in Netflix?

Netflix is priced reasonably:

Although many new competitors are coming in; Disney was able to attract 174 million audience;

but still Netflix have greater competitive advantage due to its customer oriented price.

Price earning ratio is less:

PE ratio should be low, and Netflix Price-Earning ratio is not expensive selling at $67 only with

greater growth prospects

Untapped markets:
Netflix has been successful in capturing the untapped markets, and even moving to developing

yet populated nations; India alone provided 9 billion profit in year 2020.

Great management team:

Reed Hasting have been recognized as competent executive- ability to take risk and innovating

over time.

Conclusion: