Data Analytics Bootcamp 2022 Project 1 (Finance)
Question 1/Question 2: Which stocks are trending upward? Which stocks are trending downward?
Based on the visual above, up until Q4 of 2021, all four stocks experienced a positive overall trend upwards. However, in Q1 of 2022, all four have started to trend downward, with NVDIA experiencing the largest shift. Apple and Google seem to be the least effected by the negative trend, which makes sense since their Price Spread visuals show they also have the least volatility.
Question 3: What reccomendations would you make to your client?
Based purely on our Revenue Over Time visual, I would reccomend investing in AAPL due to their upward trend in revenue in the last few quarters, as well as the stocks resilience. Based on our Revenue Percent Change bar chart, in addition to AAPL, I would reccomend investing in NVDA since they have the highest average percent revenue change with a positive 6 percent over the last 5 years.
Question 4: Which stock has the most potential to maximize profits?
Based on our ANOA test, since our pvalue was less than 0.05, we reject the Null Hypothesis and conclude that AAPL has the most potential to maximize profits.
Summary and Analysis:
Coming into this project, the prospect for most profitable/highest potential to maximize gains was Microsoft, since they not only make computers, tablets, and gaming consoles, they also sell phones on their website like Apple (Galaxy S21). Although Microsoft had the largest increase in adjusted close price throughout the 5 year span, Apple had almost double the average revenue than Microsoft. Using an ANOA test, we tested whether Apple had the most potential to maximize profits and found that the pvalue was less than our 0.05 significance level, so we accepted our original hypothesis. Based on the same ANOA test and our Revenue Over Time analysis, we would recommend investing in Apple to our client. In addition to investing in Apple, we would also recommend investing in Nvidia based off of the Average Percent Revenue Change analysis. Something to note would be that although Nvidia had the highest percent revenue change, the stock also had the most volatile price spread over the last 5 years. Apple and Google were the most resilient stocks when it came to price spread and being effected by outside factors (COVID-19).
Conclusions
Overall, the highest performing stock over the last 5 years was Apple, followed by Microsoft. The stock with the most growth over the last 5 years was also Apple with a massive spike in revenue in Q2/Q3 of 2020. Surprisingly, Apple experienced the second lowest average percent revenue change with only 5.15%, meaning there were some quarters where the stock was performing well below average. Since Microsoft experienced the largest increase in stock price, we expected it to be the top performer, but because of the lack of volume, Apple outperformed it. Based off of our analysis, Apple was by far the smartest investment for our client, however, if they were to ask for a more growth oriented stock we would steer them towards Nvidia or Microsoft.