umu.sePublications
Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
"I´m buying U.S. shares": Does the Broad Fear of the Financial Crisis 2007 - 2009 Lead to Undervaluation of Companies which have not Experienced Influences from the Financial Crisis?
Umeå University, Faculty of Social Sciences, Umeå School of Business.
Umeå University, Faculty of Social Sciences, Umeå School of Business.
2009 (English)Independent thesis Advanced level (degree of Master (One Year)), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

The starting point of this Master Thesis have been utterances of well known investors during

the financial crisis which recommend to buy shares especially in the time of financial

downturn because one could buy good performing companies at a low price.

This arouse the question if broad fear of market participants during the financial crisis of 2007

to 2009 leads to undervaluation of companies which have not experienced influences of the

financial crisis.

The researchers found that this question must be answered positively.

The authors come to this result after they, in a first step, detected unaffected companies by

observing the key financial indicators (earnings, book value and operating cash flow) of the

600 constituents companies of the S&P 600 Small Cap Index during the time period from

2004 to 2008 (before and during the financial crisis).

In a second step the writers selected one company out of all unaffected companies and carried

out a valuation to find the fundamental (or intrinsic value) of this company. By comparing the

fundamental value of the company with its share price they found that this company was

undervalued.

In a third and last step the researchers discovered the indication that this undervaluation

results from investors' fear, as they could show that a confidence indicator that measures the

confidence of institutional investors correlates with the value of the S&P 600 Small Cap

Index but not with the financial indicators (in this case EBIT and Book Value) of the

constituents companies of the S&P 600 Small Cap Index.

Thus, the main research question if the broad fear of market participants leads to

undervaluation of companies which have not experienced influences of the financial crisis of

2007 – 2009 must be answered positively, as mentioned before.

Moreover, the hypothesis:

to 2009

Markets can be inefficient in the times of the financial crisis 2007, which the researchers established must be seen as true.

Place, publisher, year, edition, pages
2009. , 80 p.
Keyword [en]
valuation of shares
National Category
Business Administration
Identifiers
URN: urn:nbn:se:umu:diva-24617OAI: oai:DiVA.org:umu-24617DiVA: diva2:226904
Presentation
(English)
Uppsok
samhälle/juridik
Supervisors
Examiners
Available from: 2009-07-07 Created: 2009-07-07 Last updated: 2009-07-07Bibliographically approved

Open Access in DiVA

fulltext(507 kB)619 downloads
File information
File name FULLTEXT01.pdfFile size 507 kBChecksum SHA-512
aad49fd5af2c235062ae770ee579c536243f990d602c1c8e415bb6d0ebea9fb1d4494188761e3909383dc0df97091fffc9c6c8f867b7f78494d4d5b9ff24a89b
Type fulltextMimetype application/pdf

By organisation
Umeå School of Business
Business Administration

Search outside of DiVA

GoogleGoogle Scholar
Total: 619 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

urn-nbn

Altmetric score

urn-nbn
Total: 359 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf