Chap 017

Chapter 17
Macroeconomic and Industry

Analysis
INVESTMENTS | BODIE, KANE, MARCUS

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Fundamental Analysis
• Intrinsic value comes from its earnings
prospects determined by:
– The global economic environment
– Economic factors affecting the firm’s industry
– The position of the firm within its industry

The Global Economy (1 of 2)
• International economy affects firm prospects
• Performance in countries and regions can be
highly variable
• Harder for businesses to succeed in contracting
economies than in expanding ones

The Global Economy (2 of 2)
• Political risk:
– Greek and Spanish economies
– U.S. fiscal cliff
• Exchange rate risk:
– Changes the prices of imports and exports
 Honda manufacturing in North America

Economic Performance (1 of 2)
Table 17.1 Economic Performance
Stock Market Return, 2015 Forecasted
Stock Market Return, 2015 (%)
(%) Growth in GDP,
In Local Currency
In U.S. Dollars 2016 (%)
Brazil -12.7 -40.0 -1.9
Britain -3.8 -8.8 2.2
Canada -9.5 -24.3 1.9
China 10.1 5.3 6.4
France 10.0 -0.8 1.3
Germany 10.8 -0.2 1.7
Greece -25.3 -32.6 2.2
Hong Kong -6.8 -6.7 2.1
India -5.2 -9.9 7.6
Italy 13.0 2.7 1.3
Japan 8.8 8.2 1.2

Economic Performance (2 of 2)
Forecasted
Stock Market Return, 2015 (%) Stock Market Return, 2015 (%)
Growth in GDP,
In Local Currency In U.S. Dollars
2016 (%)
Mexico 0.6 -13.9 2.8
Russia 17.0 -2.7 -0.3
Singapore -14.2 -19.6 3.0
South
2.6 -3.5 2.7
Korea
Spain -6.2 -15.4 2.7
Thailand -14.3 -21.9 4.0
U.S -0.6 -0.6 2.5
Source: The Economist, January 2, 2016.

Exchange Rate Changes
Figure 17.1 Change in real exchange rate: U.S.

dollar versus major currencies, 2003-2015
Source: Author’s calculations using data from OECD.

The Domestic Macro economy
• Stock prices rise with earnings
• P/E ratios are normal range: 12-25
• Forecasting the performance of the broad
market begins with an assessment of the
economy as a whole

S&P 500 Index versus
Earnings Per Share
Figure 17.2 S&P 500 index versus earnings per share

Source: Author’s calculations using data from The Economic Report of
the President.

The Domestic Macro economy:
Key Variables
• Gross domestic product
• Unemployment rates
• Inflation
• Interest rates
• Budget deficit
• Sentiment

Demand and Supply Shocks
Demand shock Supply shock
• An event that affects demand • An event that influences

for goods and services in the production capacity or
economy production costs

Demand-side Policy
• Fiscal policy —
• Monetary policy —

Fiscal Policy (1 of 2)
• Most direct way to stimulate or slow the
economy
• Formulation of fiscal policy is often a slow,
cumbersome political process

Fiscal Policy (2 of 2)
• The net effect of fiscal policy:
– Budget surplus or deficit
• Deficit stimulates the economy because:
– Spending increases demand for goods >
increased taxes reduces the demand for goods

Monetary Policy (1 of 2)
• Money supply manipulation  to influence
economic activity
• Increasing the money supply lowers interest
rates  stimulates the economy
• Less immediate effect than fiscal policy

Monetary Policy (2 of 2)
• Tools of monetary policy:
– Open market operations
– Discount rate
– Reserve requirements

Supply-Side Policies
• Creates an environment in which workers and
owners of capital have the maximum incentive
and means to produce and develop goods
• Supply-siders focus on how tax policy can
improve incentives to work and invest

Business Cycles
• The transition points across cycles are called

peaks and troughs
– Peak:
– Trough:

The Business Cycle
Cyclical Industries Defensive Industries
• Above-average sensitivity to the
• Little sensitivity to the business cycle
state of the economy
• Examples:
• Examples:
− Food producers and processors
− Consumer durables
− Pharmaceutical firms,
− Capital goods
− Public utilities
• High betas • Low betas

PHÂN TÍCH CHU KỲ KINH TẾ - BUSINESS CYCLE
All economies go through a cycle: suy thoái-phục hồi-hưng thịnh
Peak – contraction – expansion

Không có nghĩ chỉ đầu tư vào giai
đoạn khuếch trương
- Short sale ở contraction
- Trong contraction, tìm những
ngành có tăng trưởng (VD:
Covid -> thực phẩm, y tế ->
những ngành trú ẩn an toàn, tỷ
suất sinh lời trong expansion sẽ
thấp)
- Phải tìm được ngành phù hợp cho từng giai đoạn
- Chu kì sẽ lặp lại theo mùa, lặp đi lặp lại
- => Economic indicators để dự báo cho đầu tư

Chỉ tiêu dự báo: khả năng sai số cao => cần những chỉ tiêu khác

Economic Indicators (1 of 4)
• Leading indicators:
• Coincident indicators:
• Lagging indicators:

Table 17.2 Indexes of Economic Indicators
A. Leading Indicators
1. Average weekly hours of production workers
(manufacturing)
2. Initial claims for unemployment insurance
3. Manufacturers' new orders (consumer goods and
materials industries)
4. Institute of Supply Management's "Index of New
Orders"
5. New orders for nondefense capital goods
6. New private housing units authorized by local
building permits

7. Yield curve slope: 10-year Treasury minus federal
funds rate
8. Stock prices, 500 common stocks
9. Leading index of credit market conditions
10. Index of consumer expectations for business
conditions
B. Coincident Indicators
1. Employees on nonagricultural payrolls
2. Personal income less transfer payments
3. Industrial production
4. Manufacturing and trade sales

C. Lagging Indicators
1. Average duration of unemployment
2. Ratio of trade inventories to sales
3. Change in index of labor cost per unit of output
4. Average prime rate charged by banks
5. Commercial and industrial loans outstanding
6. Ratio of consumer installment credit outstanding to
personal income
7. Change in consumer price index for services
Source: The Conference Board, Business Cycle Indicators, June 2016.

Indexes of Leading, Coincident, and
Lagging Indicators (1 of 3)
A. Index of Leading Indicators

B. Index of Coincident Indicators

C. Index of Lagging Indicators

Economic Calendar (1 of 2)
• Many sources, such as The Wall Street Journal and
Yahoo! Finance, publish the public announcement
dates of various economic statistics
Time Briefing Market Revised
Date Statistic For Actual Prior
(ET) Forecast Expects From
June 14 8:30 AM Export prices May 1.0% NA NA 0.4% 0.5%
June 14 8:30 AM Retail sales May 0.5% 0.4% 0.3% 1.3% ─
June 14 10:00 AM Business inventories Apr 0.1% 0.3% 0.2% 0.3% 0.4%
June 15 8:30 AM PPI May 0.4% 0.4% 0.3% 0.2% ─

Empire
June 15 8:30 AM June 6.0 -4.0 -1.6 -9.0 ─
manufacturing
Industrial
June 15 9:15 AM May -0.4% -0.4% -0.1% 0.6% 0.7%
production
June 15 9:15 AM Capacity utilization May 74.9% 75.1% 75.2% 75.3% 75.4%
June 16 8:30 AM CPI May 0.2% 0.3% 0.3% 0.4% ─

Economic Calendar (2 of 2)
Briefing Market
Date Time (ET) Statistic For Actual Prior Revised From
Forecast Expects
Continuing 06/0
June 16 8:30 AM 2157K NA NA 2112K 2095K
claims 4
Current account -
June 16 8:30 AM Q1 -$124.8B -$125.4B -$113.4B -$125.3B
balance $124.8B
June 17 8:30 AM Housing starts May 1164K 1150K 1150K 1167K 1172K
June 17 8:30 AM Building permits May 1138K 1144K 1150K 1130K 1116K
Figure 17.4 Economic Calendar at yahoo!, week of

June 14, 2016
Source: yahoo!, Finance, Earnings Calendar, biz.yahoo.com, June 20, 2016.

Industry Analysis
• Similar to an ailing macro economy, it is
unusual for a firm in a troubled industry to
perform well
• Economic performance can vary widely across
industries

Return on Equity, 2015-2016

Industry Stock Price Performance,
2012 vs. 2016

Defining an Industry
• North American Industry Classification System,
or NAICS codes
• Firms with the same four-digit NAICS codes
are commonly taken to be in the same industry

Table 17.5 Examples of NAICS
Industry Codes
NAICS Code NAICS Title
23 Construction
236 Construction of Buildings
2361 Residential Building Construction
23611 Residential Building Construction
236115 New Single-Family Housing Construction
236116 New Multifamily Housing Construction
236118 Residential Remodelers
2362 Nonresidential Building Construction
23621 Industrial Building Construction
23622 Commercial and Institutional Building Construction

B

Sensitivity to the Business Cycle
(1 of 3)
Three factors determine a firm’s sensitivity to the
business cycle:
1. Sensitivity of sales: độ nhạy của doanh thu
đối với chu kỳ của nền kte
– Necessities vs. discretionary goods
– Items that are not sensitive to income levels
(such as tobacco and movies) vs. items that
are, (such as machine tools, steel, autos)

(2 of 3)
2. Operating leverage: đòn bẩy hoạt động
– Firms with low operating leverage (less fixed
assets) are less sensitive to business conditions
– Firms with high operating leverage (more fixed
assets) are more sensitive to the business cycle

(3 of 3)
3. Financial leverage: đòn bẩy tài chính
– Interest is a fixed cost that increases the
sensitivity of profits to the business cycle

- Sensitivity of Sales: Using standard deviation -> sự dao động của dữ liệu. Các điểm dữ liệu
cách điểm trung bình bao nhiều -> deviation số dương hoặc âm.
Standard deviation càng lớn thì dao động càng mạnh, sale dao động mạnh -> tính chu kì cao
- Operating leverage: fixed cost and variable cost. Fixed cost thông thường là việc đầu tư tài
sản cố định (máy móc, cơ sở hạ tầng,…); variable cost (chi phí nguyên liệu, nhân công trực
tiếp,..)
Sử dụng chi phí cố định nhiều, đầu tư trang thiết bị -> tạo cơ sở để tăng trưởng trong tương lai
-> đòn bẩy hoạt động
- Financial leverage: sử dụng nợ để gia tăng equity, gia tăng sản xuất
Ví dụ về 4 ngành: Film, food, phone, securities

Highest sensitivity: securities -> film -> phone -> food

Industry Cyclicality
Figure 17.8 Industry cyclicality: Growth of sales,

year over year, in two industries; sales of jewelry
show much greater variation than sales of groceries

Operating Leverage of Firms A and B
Throughout the Business Cycle
Firm A: Low Fixed Costs
Firm B: High Fixed Costs
(Recession) (Recession) (Normal) (Normal) (Expansion) (Expansion)
A B A B A B
Sales (million units) 5 5 6 6 7 7
Price per units $2 $2 $2 $2 $2 $2
Revenue ($ million) 10 10 12 12 14 14
Fixed costs ($ million) 5 8 5 8 5 8
Variable costs (($ million) 5 2.5 6 3 7 3.5
Total costs ($ million) $10 $10.5 $11 $11 $12 $11.5
Profits $0 $ (0.5) $1 $1 $2 $ 2.5


A Stylized Depiction of the
Business Cycle

V

Sector Rotation (1 of 3)
• Portfolio is shifted into industries or sectors

that should outperform, according to the stage
of the business cycle

• Peaks — natural resource extraction firms
• Contraction — defensive industries such as
pharmaceuticals and food
• Trough — capital goods industries
• Expansion — cyclical industries such as
consumer durables

Recession: Contraction
Recovery/Boom: Expansion
Discretionary: ít thiết yếu
(trang sức,…)
Staples: thiếu yếu (ăn, mặc,..)
Peak: Energy: lạm phát cao,
nguồn năng lượng cạn kiệt,
tăng giá, đầu tư có lợi
Bottom: Financials (ngân hàng,
chứng khoán): ngành cất cánh
đầu tiên trong ptrien của nền
kte vì liên quan tới vốn (vốn để
đầu tư) -> di chuyển vốn
Transportation -> di chuyển
Figure 17.10 Sector rotation
hàng hóa
Source: Sam Stovall, BusinessWeek online, “A Cyclical Take on
Performance.”


- Mối quan hệ giữa thị trường chứng khoán và chu kỳ của nền kte. Màu vàng là chu
kỳ nền kinh tế, màu xanh là thị trường chứng khoán
- Nền kinh tế sắp xuống đáy nên đầu tư trước vào financial và transportation
- Về dài hạn thì nó sẽ thể hiện rõ tính chu kì, nhưng ko định lượng được khoảng thời
gian kéo dài bao lâu (vd: gần chạm đáy nhưng ko biết là bao lâu). Hoàn toàn có thể
ứng dụng được nhưng vẫn có khuyết điểm.

Industry Life Cycles (1 of 2)
Stage
• Start-up
• Consolidation
• Maturity
• Relative Decline
Sales Growth
• Rapid and increasing
• Stable
• Slowing
• Minimal or negative

The Industry Life Cycle

Industry Structure and Performance:
Five Determinants of Competition
1. Threat of entry
2. Rivalry between existing competitors
3. Pressure from substitute products
4. Bargaining power of buyers
5. Bargaining power of suppliers

End of Presentation

© McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No
17-57
reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.

Phân tích công ty:
- Growth – tăng trưởng
- Profitability – khả năng sinh lợi
- Financial Health – sức khỏe tài chính
- Risk of Stock Price Decline – rủi ro giảm giá chứng khoán
- Corporate Governance – quản trị công ty
- Economic Moat – thế mạnh kinh tế
Phân tích quá khứ và tương lai -> phân tích quá khứ thì chắc chắn hơn, sự hiệu quả phụ
thuộc vào phân tích tương lai
Nguồn gốc tăng trưởng: bán nhiều hh dv, tăng giá bán, bán hh dv mới, mua cty khác
=> yếu tố tăng trưởng bền vững: bán nhiều hh dv
- Tăng giá bán: cạnh tranh cao, mất thị trường
- Bán hh dv mới: cty quản trị ko tốt, ko bền vững
- Mua cty khác: thống kê ko mang lại nhiều lợi ích

Financial Statements: Balance Sheet, Income Statement, Cashflow Statement,
Balance Sheet:
- Asset: xếp theo tính thanh khoản giảm dần -> ability of the firm to meet the
obligations
- Expense nằm ở bên phía Asset -> Recurring Expense: expense chưa xảy ra nhưng
đã trả trước
- Outstanding shares = Issued shares (đã phát hành) – Số cổ phiếu quỹ
- Accumulated retained earning: earning tích lũy qua nhiều năm
- BS: cho biết financial position, nguồn vốn, nợ, vốn chủ sở hữu
- Phân tích Balance Sheet:
• Liquidity
• Debt versus equity: rủi ro của doanh nghiệp, nợ nhiều -> rủi ro tăng, khả năng
chống chịu thấp
• Value versus cost: Tài sản của doanh nghiệp được ghi nhận dựa trên cost, chi phí
mà doanh nghiệp phải bỏ ra -> đánh giá tiềm năng của doanh nghiệp thông qua tài
sản (nhưng chỉ mang tính lịch sử)



Income Statement:
Cốt lõi của DN: total operating revenues, COGS, SGAE, Dep, Operating Income
Không phải cốt lõi của DN: Other Income tới hết
- Phân biệt giá cả, giá thành, giá vốn hàng bán:
Giá cả:
Giá thành: Manufacture cost -> chi phí của hàng đã được sản xuất
Giá vốn hàng bán: Cost of good sold -> chi phí của hàng đã được bán
- Chi phí liên quan tới sản xuất mà ko match với số lượng bán ra -> chỉ là cost thôi;
khi nào match với số lượng bán ra -> expense
- Non- Cash Item: depreciation, deferred taxes, net income

Financial Cash Flow:
- Operating Cash Flow: EBIT + Dep – Current Taxes
Financial Ratio:
- Liquidity -> ability to meet short-term obligation
- Leverage Ratio -> thể hiện capital structure of the company -> khả năng thanh toán
những khoản nợ dài hạn của doanh nghiệp
- Coverage Ratio -> Times Interest Earned = EBIT / Interest -> đánh giá khả năng
thanh toán khoản định kì (interest); Cash Coverage ->
- Asset Management
- Inventory Ratios
- Profitability Ratios -> measure the ability to generate profit

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Chapter 17

Macroeconomic and Industry

INVESTMENTS | BODIE, KANE, MARCUS

© McGraw-Hill Education. 17-2

© McGraw-Hill Education. 17-3

© McGraw-Hill Education. 17-4

INVESTMENTS | BODIE, KANE, MARCUS

© McGraw-Hill Education. 17-5

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© McGraw-Hill Education. 17-6

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Mexico 0.6 -13.9 2.8

Russia 17.0 -2.7 -0.3

Singapore -14.2 -19.6 3.0

Spain -6.2 -15.4 2.7

Thailand -14.3 -21.9 4.0

U.S -0.6 -0.6 2.5

Source: The Economist, January 2, 2016.

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Figure 17.1 Change in real exchange rate: U.S.

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Figure 17.2 S&P 500 index versus earnings per share

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Demand shock Supply shock

• An event that affects demand • An event that influences

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• The transition points across cycles are called

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Peak – contraction – expansion

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