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Passive Investment Portfolio Project

Passive Investment Portfolio ProjectProject Description: The following Excel File contains fundamental information on the 240 largest market cap (non-financial service) companies listed anywhere in the world. You have to complete the following tasks:1. Identify the 5 most undervalued firms in this sample, using a Relative Valuation Method. In making this analysis:You can pick any multiple you want to make this judgment. This multiple can either be an existing multiple (like PE or EV/EBITDA), a modified version of an existing multiple (like PEGY) or a multiple that you invent (Just make sure that you put it through the consistency test).2. Search Online and other resources and identify why are these five companies undervalued?3. Recommend and discuss several corrective actions that management of these companies can take in order to improve the valuation of their firms.4. Assume that you are an activist investor (Blackstone and KKR’s competitor) and are interested in acquiring one of the firms in the sample, which you plan to take private, restructure (operating and financing, if necessary) and take public again. Which company would you pick and why? (Note that it does not have to come from your list of 5 most undervalued companies).Data that you wish you had but will not have: There is no market value for debt or the information necessary to compute it and no bond ratings. You only have a five year forecasted growth in EPS and no expected growth rates in revenues & EBITDA. You do have historical growth rates (CAGR) in a bunch of variables. Do the best you can with the information you have.Final Format: Keep your write-up short and descriptive. Include your statistical output, if any, as an appendix and explain how you used it.Data Restrictions: For your own sake, I am going to restrict you from going outside the data provided on the spreadsheet. So, no visiting Bloomberg, Yahoo Finance, or any other sites.P.S.: You can use Microsoft Excel for your statistical analysis but your options will be much more extensive if you use a statistics package. My favorite is SPSS, but MINITAB will also do the trick.

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