A few years ago, the economy of the United States, like other great economies across the globe, experienced unprecedented negative growth that eventually culminated into one of the greatest recessions in the history of nations. In direct consequences, millions and millions of individual Americans and businesses unjustly suffered undue economic, material and financial difficulty.
The collapse of the housing market and the colossal depletion of millions of individual investments are but a few examples of the extent of the 2008 financial disintegration. Given these experiences, it becomes unequivocally necessary that prior to investing in any market or before buying stock in publically traded companies, the would-be investor must take critical and analytical look at the market he or she wishes to invest in.
It is against this backdraft that this writer chose to research and conducts a savvy financial analysis of the Target Corporation before investing in that company’s stock. In the next few pages, therefore, we will attempt to briefly highlight each of these issues.
Detailed overview of a U.S. publicly traded company. In the United States, there are literally hundreds and hundreds of large business entities whose stocks are held (owned) by an amazing number of savvy and motivated investors. Since most of these companies have their stocks listed on public stock exchanges, they are traditionally referred to as publicly traded companies.
The Essay on 401 K Plans Company Stock Employees
401 (k) Plans There are many economic issues facing the nation today. While some are extremely important in determining how the economy is balanced, others are not. Although this is true, that does not necessarily make these lesser important issues obsolete. Take, for example, the recent issue of corporate leaders matching contributors to the 401 (k) plan with company stock, instead of with cash. ...
Brigham & Ehrhardt (2011) refer to stocks sold to individuals outside of company’s ownership and management as publicly held stocks. Essentially, primary shareholders in a publicly traded company in the United States are, for the most part, outside investors who purchase company’s shares as against those who work within the firm. Institutions, including pension plans, mutual funds, hedge funds and insurance companies, for example, hold about half of the market value of stocks.
These companies also buy and sell actively. As a result, they together “account for about seventy-five per cent of all transactions and therefore have heavy influence on the valuation of individual stocks” ( Brigham & Ehrhardt, 2011, p. 268).
When a publicly traded firm issues shares to be traded on a public stock exchange, it does so for the sole purpose of raising capital for the firm. However, a company that engages in the sales of stocks to the public must fully be “held accountable for all happenings within the company” (http://ehow.com).
For instance, the composition of the Board of Directors is determined by simple shareholders’ votes. Interestingly, though managers may have some stocks in a publicly traded firm, they do not have voting rights merely because their personal holdings are viewed as insufficient to give them voting control.
Another interesting aspect of a publicly traded firm is the issue of stock holders’ rights, especially those relating to personal liabilities. According to Weygandt, Kieso & Kimmel (2005), since a corporation is a separate and legal entity, creditors have recourse only to corporate assets in making claims and that their (investors) liability is normally limited to the extent of their investments in the corporation. Additionally, in the American publicly traded firms, there is a group of investors called common stockholders who are often entitled to a right referred to as preemptive right.
This concept pertains to the opportunity to purchase any additional shares sold by the firm. In many American states, the preemptive right is automatically included in every corporate charter or contract (Brigham & Ehrhardt, 2011).
The Term Paper on Ecommerce Companies And Stock Valuations
eCommerce Companies and Stock Valuations 1. Introduction A hot topic in today’s business culture is eCommerce. Experts argue about whether eCommerce will change business, whether or not it is a fad, and what viable strategies there are in a business world that is changing at the speed of idea generation. One thing that nobody argues about is the fact that eCommerce oriented companies have stock ...
Because preemptive right enables current stockholders to maintain control and prevents transfer of wealth from current to new stock holders, it is this writer’s view that preemptive right is the single most important and protective tool for unsuspecting investors. The Target Corporation: Company overview.
The Target Corporation is an exclusive retail discounter that provides high quality merchandise at competitive prices in orderly and guest-friendly stores. Its history dates back to the early 1900s. In 1902, an American entrepreneur, named George Dayton, opened his first store (he called Good fellows) in downtown Minneapolis, MN.
Over the years, the company has evolved not only in nomenclature but also in its scope of business operations and economic viability. Nearly sixty years after its establishment, the company (then called Dayton Corporation) entered discount merchandising by opening its first Target retail store in Roseville, MN in 1962.
According to Target Corporation’s official websites, http://target.com, five years later in 1967, Dayton Corporation, Target’s parent company, went public with its first offering of common stock. In the 1990s, the company topped one billion dollars in revenue and acquired Merryn’s to become the 7th largest United States retailer, with the stores becoming the corporation’s largest revenue producers at the turn of that decade.
In subsequent years, the Target Corporation successfully completed a number of acquisitions of few other U.S. businesses including Marshall Field’s. In light of these positive developments, the company more than double its revenue and by the end of the 1990s, Target’s revenue exceeded thirty billion dollars.
For the purpose of focusing on its primary brand and growth vehicle, the stores, the Target Corporation sold its Marshall Field’s and Merryn’s businesses and by 2005, the company netted $50 billion in revenue. Target Corporation’s line of business.
