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Factors affecting share price (External (Government Regulation (Lack of…
Factors affecting share price
External
Market indicators & signals
Commodity prices
Advertising product is illegal in Canada - do all players charge the same?
Investor Sentiment
Expected growth in consumption - how does this track with share prices?
Government Regulation
Lack of advertising in industry = level playing field
How large can the company get?
Lack of banking support - leads to share dilution from new share issues
Sector performances as a whole
Canntrust scandal causes loss of confidence in sector
has legal cannabis displaced black market
Internal
R&D Expenditure
WACC
News Releases - types of releases cause trading trends
M&A activities
Share dilution through new issues
What determines the price of a security?
Efficient Market Hypothesis
the price reflects all future cash flows of the security
What is the valuation based on the fundamentals?
behavioural finance
stock prices are inflated based on behaviour of the investors
news releases vs. price changes and investor sentiment
based on numerical from MPT and EMH, is there irrational exuberance?
A new market - how does a new market or product behave? Phases of consumption
modern portfolio theory
The relationship between risk and return
calculate the risk (sigma) of the stock and the market portfolio of similar companies
Is it priced according to risk?