Objective: Analyze and categorize a selection of Canadian stocks into blue-chip, income, growth, tech, speculative, cyclical, defensive, and large-, mid-, and small-cap stocks. This assignment will en
Case Study 1: Stock Classification in Canada
Objective: Analyze and categorize a selection of Canadian stocks into blue-chip, income, growth, tech, speculative, cyclical, defensive, and large-, mid-, and small-cap stocks. This assignment will enhance your understanding of stock classification, financial analysis, and market dynamics.
Assignment Instructions:
Stock Selection: Review the list of Canadian stocks provided below. You may also suggest additional stocks if desired.
Research Factors: For each stock, gather and analyze the following information:
Beta & Risk Factors: Assess the stock’s volatility relative to the market and identify other major risks.
Cash Flow Position: Evaluate the company's cash flow health.
Profitability & Return Variability: Examine key metrics such as Return on Equity (ROE), net profit margin, and earnings consistency.
Dividend Policy: Investigate the company’s history of dividends, yields, and payment consistency.
Market Capitalization: Determine if it is large-cap, mid-cap, or small-cap.
Classification: Based on your research, classify each stock into the following categories:
Blue-Chip Stocks – Large, well-established companies with a strong financial history.
Income Stocks – Companies that provide reliable dividend income.
Growth Stocks – Companies with high revenue and earnings growth potential.
Tech Stocks – Companies within the technology sector.
Speculative Stocks – High-risk stocks with potential for substantial gains or losses.
Cyclical Stocks – Stocks that fluctuate with economic cycles (e.g., automotive, travel).
Defensive Stocks – Companies that remain stable during economic downturns (e.g., utilities, consumer staples).
Market Cap Classification – Large-Cap, Mid-Cap, Small-Cap based on market value.
Report: Your report should be concise, structured, and no longer than 2 pages. It must include:
Stock Analysis: A brief evaluation of the company’s beta and risk, cash flow position, profitability, dividend policy, and market capitalization.
Classification based on your analysis with supporting rationale.
Stock list:
Telus Corporation (T)
Royal Bank of Canada (RY)
Lightspeed Commerce Inc. (LSPD)
Bombardier Inc. (BBD)
Shopify Inc. (SHOP)
Loblaw Companies Limited (L)
Aurora Cannabis (ACB)
Use of AI Tools
You are permitted to use AI tools to:
Enhance your understanding of financial concepts and terminology
Verify or cross-check facts and definitions.
However, AI must NOT be used to:
Generate the final written report or responses.
Copy AI-generated content directly into the submission.
Use AI to bypass personal analysis, critical thinking, or the required research process.
Academic Integrity Reminder:
All work submitted must be your own. Misuse of AI, including AI-generated plagiarism, will be subject to academic integrity policies. Proper citations must be provided for any external sources used.
