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Proiect Final 2 TUDOSE

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    Transilvania University

    Faculty of Economic Sciences - Business Administration

    PORTFOLIO ANALYSIS FORMED FROM

    COMPANIES ACTS: ANTIBIOTICE IASI, SIF

    TRANSILVANIA, BERMAS SUCEAVA,

    ELECTROAPARATAJE BUCURESTI, PETROM

    Students: Belciugeanu Geanina Nicoleta

    Molea Alexandra Ana-Maria

    Tudose Mariana

    Brasov

    2011

    CONTENT

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    INTRODUCTION.........................................................................................................3

    COMPANIES PRESENTATION.................................................................................4

    ANTIBIOTICE IASI ....................................................................................................................4

    SIF TRANSILVANIA S.A ............................................................................................................5BERMAS SUCEAVA ..................................................................................................................6ELECTROAPARATAJ BUCURESTI ..........................................................................................6PETROM ........................................................................................................................................7

    MACRO-ECONOMIC ENVIRONMENT...................................................................8

    The global crisis...............................................................................................................................8Country risk......................................................................................................................................8Unfriendly legislation ....................................................................................................................10

    SECTORIAL PERSPECTIEVES...............................................................................10

    The pharmaceutical sector..............................................................................................................11Financial intermediation sector......................................................................................................11Food sector ....................................................................................................................................12Manufacturing sector.....................................................................................................................12Petroleum sector.............................................................................................................................13

    FINANCIAL - ECONOMIC ANALYSIS ................................................................13

    Sector analysis................................................................................................................................14Quantitative cumulative value analysis ......................................................................................14Management issues .................................................................................................................... 14

    Technical analysis.......................................................................................................14ATIBIOTICE IASI.........................................................................................................................15

    SIF TRANSILVANIA...........................................................................................................18BERMAS SUCEAVA...................................................................................................................21ELECTROAPARATAJE BUCURESTI........................................................................................24

    PETROM.....................................................................................................................................26

    TECHNICAL ANALYSIS.........................................................................................29

    A. LINE CHART...........................................................................................................................30B. CANDELSTICK CHART.........................................................................................................31

    ANTIBIOTICE IASI .....................................................................................................................31SIF TRANSILVANIA...................................................................................................................33BERMAS SUCEAVA...................................................................................................................35ELECTROAPARATAJE BUCURESTI........................................................................................37PETROM........................................................................................................................................39

    RUMORS AND NEWS .............................................................................................41

    ANTIBIOTICE IASI......................................................................................................................41SIF TRANSLIVANIA...................................................................................................................42BERMAS SUCEAVA...................................................................................................................42ELECTROAPARATAJ BUCURESTI..........................................................................................42PETROM .......................................................................................................................................42

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    BIBLIOGRAPHY.......................................................................................................43

    INTRODUCTION

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    In this project has been realized a case study, which is made of an stock analysis to a portfolio build from listed actions at BVB. All the data used are real, data for the issuing

    companies at the shares from the portfolio, their price of close, the value of the dividends.

    It is known that in general, in every human activity, the success is directly proportional with

    the effort that you make the things. This thing it is valid in every sector of activity, in business,

    sport, social relations.

    We dont have any doubt when we talk over the investments, while the efforts are greater

    than the profits are higher. In the case of investments the effort is compared with the activity of the

    opportunities identification, offered by the financial medium, from the of the market mechanisms,

    from the realization of a proper strategy of investments, from an analyze of financial indicators and

    the identification of the risks.

    We chose to invest in a share portfolio of the following societies: Antibiotice Iasi, SIF

    Transilvania, Bermas Suceava, Electroaparataje Bucuresti and Petrom. We chose this companiesbecause: - the shares were quoted at the first and second category, the principle of diversification of

    the project, the quote to be realized from an computerized stock system, the structure of mobile

    values to implies titles from different sectors of activity, the shares to be the most liquid, the shares

    to have the greater capitalization.

    We will present for the shares portfolio the fundamental analyzes and the technical one, but

    the management analyzes it needs for the beginning a short presentation of the companies, at the

    macroeconomic context and also of the sector perspectives.

    COMPANIES PRESENTATION

    ANTIBIOTICE IASI

    The company operates in the pharmaceutical and medical services sector. For three consecutiveyears (2006, 2007, 2008) the company Antibiotice was included in Top 100 most valuable active

    companies in Romania, based on the exchange capitalization, made by Ziarul Financiar. The social

    capital of the company was in 2010 of 45.489.729,10 lei. The financial results of Antibiotice at the end of

    the first nine months of this year confirm the upward trend recorded by Antibiotice as early as the first

    semester, when the net profit was LEI 17.25 million.

    The pharmaceutical company Antibiotice Iasi has reported for the first 9 months in 2010 a net profit

    of 21,11 mil. RON, a figure which is increasing with 33,9% than the one from the period of the last year,

    when the net profit was 15,766 mil. RON, according to financial information emitted by the Stock

    Exchange from Bucharest. The sales turnover has increased in 2010 with 12, 37, from 157,793 mil. RON

    to 177,324 mil. RON

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    The structure of Antibiotice Iasi shareholders on November 2010 is:

    - Ministry of health 53.0173%

    - S.I.F. Transilvania 10.0954%

    - Other shareholders 36.88%

    Exports represented a strategic orientation of Antibiotice companys management, considering that,

    in the crisis of the national health system, prices are more favorable on the external markets than on the

    national one and the profit margins are greater. Expressed in lei, last year Antibiotice exports rose to a

    value of 40,724,373 lei, higher by 56% as compared to 2008, when the value was 26,159,806 lei.

    Antibiotice has developed its own Center for Medicine Evaluation, further to an investment of over

    a million Euros. Thanks to this acquisition, the company will be able from now on to perform phase 1clinical studies as well as bioequivalence studies, both for its medicine portfolio, as well as for other

    beneficiaries.

    SIF TRANSILVANIA S.A

    Its main activities focus on the administration of shares, management of its own portfolio of stocks

    and shares, as well as investment and brokerage activities. As of December 31, 2009, the Company owns

    shares in 265 companies. These companies are active in such fields as tourism, banking, machine

    building, food and beverage, building, finance, chemical, industrial and construction sector, agriculture

    and pisciculture, transportation and others. The stocks deposits of SIF Transilvania SA are kept by ING

    Bank NV Amsterdam, through its branch office in Bucharest. SIF Transilvania SA is a full member of theEuropean Venture Capital Association (EVCA).

    SIF Transilvania S.A. company has a capital of 109.214.333,20 lei and number of shares1.092.143.332.

    SIF Transilvania S.A. announced earnings results for the third quarter of 2010. For the period, thecompany reported net profit of 31,619,670 RON on total revenue of 63,242,157 RON compared to net

    profit of 123,756,852 RON on total revenue of 163,820,196 RON for the same period a year ago. Pre-tax

    profit was 31,975,647 RON compared to 129,286,990 RON for the same period a year ago.

    The shareholders of the SIF company is very dispersed, because no investor can hold, either alone

    or together with other investors, individuals and legal entities acting in concert with more than 1% of the

    capital. Currently it is estimated that the company has about 9 million shareholders. In February 2009 the

    capitalization of the company was about 264.3 million lei.

    Management

    General Manager: Mihai Fercala

    Chairman of the Board: Mihai FercalaBoard Members: Valentin Rata, Gheorghe Lutac, Marin Ramneantu, Stefan Szabo, Aurel Besliu,

    Constantin Radu.

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    The strategic objectives of SIF Transilvania on short, medium and long terms are the following:

    - to manage its portfolio to a high level of performance, with a focus on increasing

    quality and efficiency of portfolio management;

    - to keep on restructuring the existing portfolio and to insure the pre-requisites of an

    optimum portfolio;

    - to correlate investment / divestment activities with opportunities on the Romanian

    money and capital markets;

    - to increase the net asset value (NAV) and to consolidate the financial position of SIF

    Transilvania and of its shareholders on the capital market;

    - to maximize the profitability of the activity at all its levels and to distribute an

    optimum dividend to the shareholders.

    BERMAS SUCEAVA

    Its main activities focus on the manufacturing of beerr on local plan. The company is one of the

    largest independent producers of beer from Moldova.

    Alcoholic drinks producer Bermas Suceava (BRM) has budgeted 2010 net profit of 1.54 million

    RON. The company has a registered capital of 15.087 million lei, divided into 21,553,000 shares with a

    nominal value of 0.70 lei. The company turnover is of 23,456,618 RON and its net profit of 1,520,488

    RON.

    The structure of Bermas Suceava shareholders on November 2010 is:

    - Asociatia Victoria Bermas 30.87%

    - Pas Bermas Suceava 20.80%

    - Other shareholders 48.33%

    SC Bermas Suceava SA will bring to market a new range of beer, the fourth produced by this

    company. It is about beer Bucovina.

    The company plans to, in the next period, installation of illuminated and banner all over the country

    that sells beer, and plans for next year doubling bottling capacity type KEG barrels.

    ELECTROAPARATAJ BUCURESTI

    Electroaparataj is the largest Romanian manufacturer of low voltage switchgears and wiring

    accessories, as well as a noticeable supplier of steel sheet parts, other kinds of metal works and anti-

    corrosion coatings. Electroaparataj sells its products to more than 13,000. domestic customers, mainlythrough 24 authorized dealers. Among the users of Electroaparataj products there are Metrorex, Mittal

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    Steel Galati, The National Railway Company, National Electric Company, mining, water and

    transportation companies. Electric System integrators are also an important kind of clients.

    Bucharest Electroaparataj company reported a net profit of 4.339 million lei in first nine months of

    2010, 12.3 times higher than that obtained in the same period last year. Net turnover dropped by 4.8% in

    the reference period, from 5.906 million to 5.619 million lei, while total revenue increased by 67.52%

    from 7.217 million lei to 12.090 million lei and total costs by about 13%, from 6.855 million to 7.739

    million lei.

    The structure of Bermas Suceava shareholders on November 2010 is:

    - Broadhurst Investments Limited Nicosia Cyp 67.72%

    - SC. Metrex Big SA Galati 10.81%

    - Others shareholders 21.47%

    The strategy of the company is to:

    - maintain the national leader position as low voltage manufacturer.

    - consolidate our position in mettal works and anti-corosion coatings.

    - continue the technological development and accomplish the aim that by 2007 at

    minimum 80% of endowments are new and modern.

    - increase the quality level and to qualify TS 16949.

    PETROM

    Petrom is the largest oil and gas company in South-East. A successful actor with sustained profits in

    exploration and production, refining and marketing natural gas. The company creates value for its

    shareholders and benefits for employees, business partners and the Romanian economy in general.

    Petrom in the first half of 2010 net profit of 1.526 billion lei, over four times higher than in the

    corresponding period last year, 331 million.

    Also, the company sales amounted to 8.343 billion lei at the end of the first half odf the semester,

    up 14% compared to sales recorded in the first six months of last year to 7.328 billion lei.

    The structure of the Petrom shareholders:

    - sterreichische Minerallverwaltung OMV AG 51.01%

    - AVAS (Agency for the Recovery of State Assets) 20.64%

    - Property Fund S.A. 20.11%

    - EBRD (European Bank for Reconstruction and Development) 2.03%- Free float (around 500,000 private and institutional investors from Romania and from

    http://en.wikipedia.org/wiki/OMVhttp://en.wikipedia.org/wiki/OMV
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    abroad) 6.21%

    SNP Petrom SA aims to explore and exploit oil and gas deposits on land and in the Black Seacontinental shelf, petroleum and petroleum products transportation, marketing through its own

    distribution network, the transport of oil and petroleum products. The compny wants to become the key

    player in the regional energy market.

    MACRO-ECONOMIC ENVIRONMENT

    The capital market represents a market where demand and offer of financial assets meet and are

    freely regulated on long and short run. We talk about a market where we can transaction securities

    (shares or bonds) and the main role of it is to mobilize the capitals of persons (legal or natural persons)

    who want to save some money (they are the buyers of shares and bonds) and also want a profitableinvestment of these founds.

    The macro-economic environment has an important and decisive role regarding the direction of

    the capital markets. The macro-economic factors that can influence the capital market are: consumer

    credit, consumer price index, current account balance, export, gross domestic product, import, industrial

    production, producer price index, retail, trade balance, unemployment rate etc. This paper will analysesome of them in order to build a picture of the macro-economic environment that affects Romania.

    The global crisis

    Since its appearance, the global crisis has made many victims. One of them, a quit easy one wasRomania, a developing country which was struggling in 2007-2008 to make some progresses. The main

    aspect of the crisis is the lack of liquidities, which has led to bankruptcy for some companies. The

    indicators and the quotation prices for companies have decreased the option of investing being a very

    unoportunistic one. Persons who want nowadays to put their money in some investments are more

    cautious, informing themselves twice before acting, using small amounts and waiting for the market totake an up-turn. For the stock market, on short run the crisis had a major impact small players have

    disappeared, being undertaken by big companies or just dissolved, on long run we can talk about big

    companies that will be more valuable and will gain the trust of the investors. So, the crisis is all bad and

    is scaring all the shy kids of the market, but how about the bold kids who will transform the crisis in

    everything that they dreamed of. We have now the category of opportunistic investors: the scientistsforesee the rise of the alliance U.S.A. China in a new G2 forum. A possibility could be a future transferof technology and know-how from this country in a developing country such as Romania, which will

    strengthen the economy. Investing in this kind of company can be an opportunity. A part of the

    companies can receive help from the state thanks to different friendly relationships with important

    persons from the countries administration. An example can be in Russia where the business man Oleg

    Deripaska is released from his debt by the premier Vladimir Putin (president of Commitee of Observers

    for the public bank Vnesekonombank) for a determined period.

    Country risk

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    Country risk refers to the risk associated to investing in a country, taking into account changes

    in the business environment that may adversely affect operating profits or the value of assets in a specificcountry. There are several types of factors with impact on the stock exchange, financial factors for

    example currency controls, devaluation or regulatory changes, stability factors mass riots, civil wars

    or other unpredictable events. Political risk analysis providers and credit rating agencies use differentmethodologies to assess and rate countries' comparative risk exposure. Credit rating agencies tend to use

    quantitative econometric models and focus on financial analysis, whereas political risk providers tend to

    use qualitative methods, focusing on political analysis. However, there is no consensus on methodologyin assessing credit and political risks.

    For Romania the country risk is very big, because of the political and economical instability.

    Politically speaking, the major future events that will affect Romania are parliamentary election in 2012

    and presidential election in 2014. There is also a possibility of that the government will not survive for a

    full parliamentary term, another set of elections will result in a possible coalition with the centre-left SDPlikely to be returned as the largest party, supported by smaller groups, and perhaps ruling together with

    the centre-right NLP, despite policy differences.For the financial factors as part of the macro-environment, Romania presents most of the figures

    on a negative light. For 2010 it had a GDP smaller than the one registered in the year before. As a

    forecast, we have for 2011 and 2012 some improvements, but the crisis will still be present with its

    effects. The inflation in 2010 reached a percentage of 6.10 with a possible decrease in 2011 and 2012.

    The budget balance remains negative even for the forecasted period, the expenses exceeding the incomes.

    BB: more prone to changes in the economy

    B: financial situation varies noticeably

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    Unfriendly legislation

    In order to improve the business climate in Romania and attract foreign capital to the economy,

    the Romanian Government set up new regulations in 2008 aimed to support investments.

    In this context, authorities issued the Emergency Government Ordinance no. 85/2008 setting general

    legal framework in the field of investment incentives.

    Romania has a poor quality of the incentives when talking about the market of capitals. Our

    country is placed on the 24th place in Europe regarding how favorable is the juridical and fiscal system

    from a total number of 27 countries (study made by the European Association for Private Equity andVenture Capital-EVCA). This is the second presence in the top realised by EVCA, first one situating

    Romania on the last place of the top.

    For our companies the macro-economic environment has also a major influence. The

    pharmaceutical sector is known to have a constant position in the preferences of the investors, maybe

    because it is a safe sector that can not take a down turn very quickly because the demand will always

    exist and the customers are willing to pay important amounts for this type of product. In my opinion, amacroeconomic factor that will influence the Antibiotice Iasi company is the GDP of Romania, is

    particular one element of the GDP, the consumption. With the increase of the consumption, we will get

    an increase of the expenditure per person regarding the pharmaceutical products, which in 2010 is of 75-

    80 Euro/inhabitant, a value two times smaller than the ones from some European countries, even six

    times smaller than the one from some countries in west. In conclusion, with the increase of consumption,the profit of the company will increase, the company will invest more and the price of shares will be a

    better one for Antibiotice Iasi.

    For the SIF company which has a portfolio very diversified we can talk about a lot of factors thatinfluence the price of the shares. In my opinion the majority of the factors that influences the price of the

    shares have negative connotation, the crisis still affecting the country, but it can exist a particular one that

    can influence in a positive direction the future price of the shares for SIF TRANSILVANIA, and so will

    talk about the internal rate of growth, which all the analysts expect to give good news for the exchange

    market. This factor will not influence in a very great amount the quotation of the BVB shares of SIFTransilvania, but by getting healthier the economy of the country, all the other companies will get

    healthier. For 2010, the internal rate of growth was predicted to be around 0%, number estimated by the

    European Bank for Reconstruction and Development, but for January 2011 a rate of growth of 1.3% was

    estimated, and for the entire year we have even a more positive number of 3%. The question is in which

    amount the austerity policies (downsizing the number of employees, cutting-offs from salaries, moretaxes) will influence this growth, this measures having an effect on the internal demand.

    SECTORIAL PERSPECTIEVES

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    The pharmaceutical sector

    The reason for which the stock brokerage house recommends these stocks in the coming years is

    the demand for drugs, because of the generalized phenomenon of the aging of the population will

    increase. We have four companies that are transaction at BVB: Antibiotice (ATB), Biofarm (BIO),Zentiva (SCD) si Farmaceutica Remedia (RMAH).The capitalization of three of the companies

    fluctuates between 200 and 315 million lei, while the market value of Remedia Deva is around ten times

    smaller. The volume of the Remedia businesses is comparable with the sales of the other companies.The explanation comes from the fact that the main activity domain of the company from Deva is

    marketing of the pharmaceutical products, while the other three companies are also producing

    pharmaceutical products. Thus, the need of investing in fixed assets, and also investing in research is

    higher for the last ones named.

    Antibiotic Iasi registers a lower efficiency of capitals in comparison with Biofarm, they offer

    more stability to stakeholders. The company from Iasi had profit in 2009, while BIO had a loss in thesame year because of the depreciation of the share portfolio. During the last seven years, the company

    has shown that is the most stable on the market. Net profit per share has doubled from 2003 to 2007, and

    the medium profit per share from 2007-2009 was with only 11.5% smaller than the one from 2004 to

    2006. The results obtains by the other companies were significantly lower, appreciate the Tradeville

    analysts. From financial stability point of view, ATB detach from the other companies, stockholders

    investing in a solid business, without major fluctuations from one year to another.

    Financial intermediation sector

    Financial institutions (intermediaries) perform the vital role of bringing together the agents in the

    markets with surplus of funds and that want to lend, with those with a shortage of funds who want to

    borrow. Through the process of financial intermediation, certain assets or liabilities are transformed into

    different assets or liabilities. When market condition change, the behavior of the participants change, thus

    leading to structural changes.

    The past one year and half gave the possibility for researchers to study and observe what nextgenerations will study from now on. The word crisis was on everybodys agenda some were hit harder

    some took real advantage of it. But globally speaking there has been a huge financial loss. Already thereare a lot of studies and books on the market, trying to figure out what went wrong or trying to give

    solutions. Just as all the other countries, Romania was also hit by this financial turmoil. If in other

    countries, the financial institutions were hit harder, followed by the corporate sector, in Romania the

    pressure that is on the economy reaches now to the financial institutions. So far they are holding good,

    but for the past year, we can observe a change in the structure of the assets and liabilities due to the

    modification of the behavior from the corporate and household sector concerning the loans and savings.

    The increasing trend will begin in the second half of 2011 mainly because of the diminution of the

    effects of the crisis. The investors will start regaining their trust in Romanian economy and the financial

    intermediation sector will be very appealing to them.

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    Food sector

    The per capita caloric value of food consumption in Romania hardly changed between 1990 and

    2009, remaining at about 3,100 calories a day. The structure of food consumption also remained fairly

    constant, with about 25 percent of caloric intake coming from animal products. Food consumption

    accounted for 53 percent of household expenditure in 2003. Farmer households spent substantially larger

    shares of their disposable income on food (69 percent) than salaried workers (45 percent). The relatively

    large share of expenditure on food reflects farmers low incomes, which are about 6070 percent those of

    salaried employees and have been declining.

    Consumption of food products produced in the household plays a very important role in farmer

    families, representing 60 percent of total cash and noncash spending on consumption (figure 1.11). Bycomparison, in households of salaried employees, this imputed component of consumption expenditure is

    about 15 percent. The importance of consumption of food products shows that farmer householdsconsume more than 50 percent of cereals and most livestock products (excluding beef) produced on their

    farms. Although this figure has declined over time, it nevertheless remains very high compared with

    European averages.

    Manufacturing sector

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    The machine building industry was created and developed in Romania after the Second World War

    and, today, is one of the most important industry of the manufacturing industry;-The most importantbranches are: electric and electronic equipment, equipments and technological aggregates (mining, oil,

    machines)-the most important trade partners for Romania are: Germany and Italy.-The total number of

    companies from this sector is 1.748.-The turnover of the companies activating in this field is 1.102,8 millEuro.

    Some weak points of the manufacturing industry in Romania are: the low productivity, the smallpercentage (2%) of the research & development costs, the small percentage of using Internet in the

    process of buying-selling, the small percentage of employees using PCs. The activity from the

    manufacturing industry has continuously register a moderate increase in the period November - January

    compared to the previous three months. The number of employees will continue to decrease, and

    contextual sold will be of -8% of the total manufacturing industry. For some of the activities, respectively

    the production of coke goods and the products obtained from the oil processing, will be registered a

    decreasing trend more important than the total one.

    Petroleum sector

    The petroleum sector has always been an important factor that was in the active BVB investors

    attention. Thanks to the great liquidity and the good financial results this sector is attractive to big

    investors. But the last months have offered an unfavorable market context at an international level.

    Romanian companies have had to suffer because of the big recalls of foreign companies from BVB. Even

    though these are hard moments, there exist potential given by the activity evolution and good positioning.

    There are listed on BVB 18 companies from petroleum extraction and refining sector but the

    investors attention is focused almost constantly on the three most important companies from BVB,

    because of their high liquidity. The transactions with Petrom and Rompetrol Refinery Constanta

    summarizes almost 8% from total BVB transactions.

    The petroleum and gas sector is dependent more and more of states politics which exposes the

    companies to political risks all around the world affecting their rating. Also these kind of problems can

    appear in the future even in developed countries such as U.S.A., Great Britain and Canada which are the

    pylons of worlds economy. The cause can be considered the frequent changes and intentions of changingfiscal code.

    In 2011 the perspectives for the refining sector arent good, on international level the marketconditions are unclear so there is place for speculations, anything can happen.

    FINANCIAL - ECONOMIC ANALYSIS

    An investor must take into account many factors before entering on the stock market. He willundertake some risks depending on the sum of money that he will invest so the decision of investing

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    must be an informed one. The tool that could help the potential investor in order to lower the quantity of

    risk is the fundamental analysis. Fundamental analysis of a business involves analyzing its financialstatements and health, its management and competitive advantages, and its competitors and markets.

    When applied to futures and forex, it focuses on the overall state of the economy, interest rates,

    production, earnings, and management. When analyzing a stock, futures contract, or currency usingfundamental analysis there are two basic approaches one can use: bottom up analysis and top down

    analysis. The term is used to distinguish such analysis from other types ofinvestment analysis, such as

    quantitative analysis and technical analysis.

    When selecting the criterion depending on which to invest you must take into account:

    Sector analysis

    Sector analysis involves identification and analysis of various industries or economic sectors that

    are likely to exhibit superior performance. Academic studies indicate that the health of a stock's sector isas important as the performance of the individual stock itself. In other words even the best stock locatedin a weak sector will often perform poorly because that sector is out of favor.

    Quantitative cumulative value analysis

    Quantitative cumulative value analysis: This method is also commonly referred to as fundamental

    analysis.Fundamental analysts consider past records of assets, earnings, sales, products, management,

    and markets in predicting future trends in these indicators and how they may affect a companys future

    success or failure. By appraising a firms prospects, these analysts determine a stocks intrinsic value

    and assess whether a particular stock or group of stocks is undervalued or overvalued at the current

    market price. If the intrinsic value is more than the current share price, then this stock would appear to

    be undervalued and a possible candidate for investment.

    Management issues

    Management issues: This involves examining perceptions about management and perceptions by

    management. It includes various qualitative judgments regarding the competence of current and

    prospective company management, as well as issues related to insider buying, future strategies to

    increase operations and market share. Most large companies compensate executives through acombination of cash, restricted stock and options. It is a positive sign when members of management are

    also shareholders. When management makes large purchases of their own stock with private funds, it

    may indicate that management insiders feel the company is undervalued, or that a favorable company

    event will occur soon.

    Technical analysis

    http://en.wikipedia.org/wiki/Financial_statementshttp://en.wikipedia.org/wiki/Financial_statementshttp://en.wikipedia.org/wiki/Competitorshttp://en.wikipedia.org/wiki/Marketshttp://en.wikipedia.org/wiki/Futures_contracthttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Investment_analysishttp://en.wikipedia.org/wiki/Quantitative_analysishttp://en.wikipedia.org/wiki/Technical_analysishttp://en.wikipedia.org/wiki/Economic_sectorshttp://en.wikipedia.org/wiki/Fundamental_analysishttp://en.wikipedia.org/wiki/Fundamental_analysishttp://en.wikipedia.org/wiki/Intrinsic_value_(finance)http://en.wikipedia.org/wiki/Market_pricehttp://en.wikipedia.org/wiki/Qualitative_researchhttp://en.wikipedia.org/wiki/Managementhttp://en.wikipedia.org/wiki/Market_sharehttp://en.wikipedia.org/wiki/Financial_statementshttp://en.wikipedia.org/wiki/Financial_statementshttp://en.wikipedia.org/wiki/Competitorshttp://en.wikipedia.org/wiki/Marketshttp://en.wikipedia.org/wiki/Futures_contracthttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Investment_analysishttp://en.wikipedia.org/wiki/Quantitative_analysishttp://en.wikipedia.org/wiki/Technical_analysishttp://en.wikipedia.org/wiki/Economic_sectorshttp://en.wikipedia.org/wiki/Fundamental_analysishttp://en.wikipedia.org/wiki/Fundamental_analysishttp://en.wikipedia.org/wiki/Intrinsic_value_(finance)http://en.wikipedia.org/wiki/Market_pricehttp://en.wikipedia.org/wiki/Qualitative_researchhttp://en.wikipedia.org/wiki/Managementhttp://en.wikipedia.org/wiki/Market_share
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    Technical analysis: Involves examining how the company is currently perceived by investors as a

    whole. Technical analysis is a method of evaluating securities by researching the demand and supply fora stock or asset based on recent trading volume, price studies, as well as the buying and selling behavior

    of investors. Technical analysts do not attempt to measure a security's intrinsic value, but instead use

    charts or computer programs to identify and project price trends in a market, security, fund, or futurescontract. Most analysis is done for the short or intermediate-term, but some technicians also predict

    long-term cycles based on charts, technical indicators, oscillators and other data. This is widely

    considered to be unsound and similar to astrological methods of discovery.

    ATIBIOTICE IASI

    1. ROE (Return on Equity):

    ROE=Net profits/Equity

    ROE will be analyzed in the following periods:

    Periods 09.30.2010 06.30.2010 03.31.2010

    ROE Value 8.09% 6.71% 4.29%

    d Value 6.25% 6.25% 7.5%

    This is one of the most important indicators which show the companies capability to use the assets inan efficient manner in order to realize the final scope of gaining profit. In the first studied period,

    03.31.2010, the indicator was lower than in the other two periods and also as can be seen in the above

    table the value was lower than interest rate with almost 2%. So the trend from the first period to the

    second one was of small increase, the indicator value in June was with 2% more than in March, it was

    also bigger than d value. In the next period was a small increase but it has to be specified the fact that the

    interest rate has increased but the company managed to stay efficient.

    2. ROA (Return on Assets) ROA=Net income/Total assets

    An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how

    efficient management is at using its assets to generate earnings. Calculated by dividing a company's

    annual earnings by its total assets. Sometimes it is refered to as an return on investment.

    3. EPS(Earnings per share)

    EPS=Net income/Nr shares

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    09.30.2010 06.30.2010 03.31.2010

    0.0207 0.0262 0.0379

    EPS is the part of the company's profit that is attributed to each individual share of stock. EPS is agood indicator of a company's profitability, and is a very important metric to look at while evaluating a

    certain stock. The indicator value in the first period was bigger than the other two caused by the big netincome gained by the company, the number of shares stayed from 2005 until now the same. Moving to

    the second period was a decrease with almost 0.01 followed by a small increase in the recent period

    caused by an increase in net income.

    4. Net profit

    Net income =Gross profit deductions09.30.2010 06.30.2010 03.31.2010

    15 766.77 lei 11 916.81 lei 21 110.74 lei

    Net profit is an indicator that shows the result of a company and if the company is profitable this

    indicator will have a big value. From the table above it can be said that the company was more profitable

    in the first period with a drastic decrease the company registering a net profit almost half of the one from

    the previous period. But in the following period there was an increase which shows that the company

    passes a recovering period with a positive perspective.

    5. Liquidity index

    Liquidity index=Total assets/Total liabilities

    09.30.2010 06.30.2010 03.31.2010

    2.06 1.89 1.93

    In all three periods the indicator is more than 1. Whit a slow tendency of decrease from March to

    June but followed by an increase so the company is solvable and that makes it attractive to investors.

    6. Debt to equity ratio

    Debt ratio=Debt/Liabilities

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    09.30.2010 06.30.2010 03.31.2010

    43.45% 52.07% 49.35%

    The values are close to 50% so it is good even if it is a bit low then 50%. So the company is wellmanaging his activities. If the indicator value was very low or very big thecompany wasnt managingwell his equity and debts to sustain his activities.

    Market indicators

    1. PER(price earnings ratio)=Price per share/EPS

    PER=Price per share/EPS

    09.30.2010 06.30.2010 03.31.2010 sector market

    20.23 18.32 32.17 13.50 10.68

    The price-earnings ratio (PER) is a popular measure of equity value. However, the level of price-

    earnings that is justified depends upon knowing the future.

    If the growth rate of earnings is positive, a higher price-earnings ratio would be justified, but by notknowing the future, we cannot say what future earnings will be and therefore we cannot know what a

    reasonable price-earnings ratio might be. The values of indicator in the three periods show that the shares

    are over evaluated compared with the reference value or market value which is 15.In the first period

    the shares are over evaluated almost 200% but the trend in the next period is of decrease so the the price

    tends to come to normal. But the situation turn and the price again is rising indicating another trend of

    over evaluation. The value indicator from the last period is double from the sector indicator which means

    that the company is very attractive for investors and the market indicator is even much lower.

    2. P/BV

    P/BV=Price/Book Value

    09.30.2010 06.30.2010 03.31.2010 sector market

    1,18 0,92 1,23 0,86 1,09

    Price-to-book value is a commonly used valuation technique in the stock market. Many analysts

    believe that this is one of the best ways to determine the value of a stock. The price-to-book value is aratio that tells you the relationship between the price that a stock is currently trading for and the actual

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    book value of a company. By comparing these two values, it can be determined if the stock is currently

    trading at a bargain or if it is overpriced.The indicator value from the recent period is bigger than the sector and market values which

    means that the companys shares are over evaluated.

    3. DIV/Y

    DIV/Y=Dividend/Price per share

    09.30.2010 06.30.2010 03.31.2010 sector market

    2.64 5.34 2.50 2.72 1.87

    The dividend yield or the dividend-price ratio on a company stock is the company's annual dividendpayments divided by its market cap, or the dividend per share, divided by the price per share. It is often

    expressed as a percentage. However, the price of preferred shares varies according to the market so the

    yield based on the current price fluctuates. Owners of preferred shares calculate multiple yields to reflect

    the different possible outcomes the life of the security.

    Comparing the indicator value from the recent period with the market appears that the shares are

    underpriced and that the future dividends will not be as high as previous ones. But the sector value is

    bigger than the last period value meaning that from the sector point of view the shares are overpriced andthat future dividends might be higher.

    SIF TRANSILVANIA

    1.ROE (Return on Equity):

    ROE=Net profits/Equity

    ROE will be analyzed in the following periods :

    09.30.2010 06.30.2010 03.31.2010

    4.82% 3.45% -0.55%

    As you can see the indicator ROE has increased from -0.55% to 4.82% during a year. The interest

    rate for BNR at 30.09.2010 was 6.25% which is a higher figure than the level of our ROE indicator in the

    same period. Taking into account the opportunity cost, the investor will be more advantaged if he will

    invest his money in a bank account than investing them in SIF Transilvania. The bank investment is the

    most certain one because it brings fix interest rate.

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    2. EPS

    EPS=Net income/Nr shares

    09.30.2010 06.30.2010 03.31.2010

    0.0225 0.0267 0.0999

    With the help of EPS indicator we will compute the price of one shere.The price depends on the net

    income and the number of share. An increase or a decrease of the EPS indicator must take into account

    the both termes. As we can see from our table the price of one share during year 2010 has decreased from0.0999 to 0.0225. From 2007 the number of shares of the company is the same 1.092.143.332, meaning

    that the net income of the company has decreased from 31.03.2010 to 30.09.2010.

    4. Net profit

    Net income =Gross profit deductions

    09.30.2010 06.30.2010 03.31.2010

    31,619.67 22,312.53 -3,563.62

    The situation of the company at 31.03.2010 was a difficult one because the company was sufferinga loss, the expenses being more than the revenues. In 30.06.2010 the situation improved and in present is

    even better. This thing shows us that the company is profitable and it can distribute dividends or even

    better invest in new companies, which will bring an increase in the company value.

    4. Liquidity index

    Liquidity index=Total assets/Total liabilities

    09.30.2010 06.30.2010 03.31.2010

    0.88 1.21 1.90

    The liquidity index shows the companies solvability, meaning if the company can create money topay its debt. The companies solvability has decreased from 31.03.2010 to 30.09.2010 in an important

    amount. The causes can be that the company is facing some major investments or debts, or that some

    interest rates on some loans have increased in an important quantity.

    5. Debt to equity ratio

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    Debt ratio=Debt/Liabilities

    09.30.2010 06.30.2010 03.31.2010

    13.65% 12.67% 7.56%

    The debt ratio shows the debt and equity used by the company in order to sustain its activities. The

    percentage of this indicator is good to be close to 50% or even smaller, then the company could well

    manage its debts and will not go bankrupt. SIF TRANSILVANIA sustains its activity mainly from the

    equity, the debt ratio in 30. 09.2010 being of 13.65% and has reached even lower levels in 31.03.2010.

    Market indicators

    1. PER(price earnings ratio)=Price per share/EPS

    PER=Price per share/EPS

    09.30.2010 06.30.2010 03.31.2010 market sector

    26.05 17.68 8.61 10,68 12,77

    PER indicator shows the price that the investors are willing to pay in order to gain one dollar. We

    can see from the table above an impressive increase during 2010 from a value of 8.61 to a value 3 times

    bigger of 26.05. As we know from the table above the EPS indicator has increased facing the period31.03.2010, thus we can appreciate that the price per share has increased in such amount that the level of

    PER has tripled. The level of the PER indicator is greater than the level of the references value or market

    value which is 15 it can be observed that the shares are overvalued. The level of the PER for the entire

    sector is lower than the one of the PER for SIF Transilvania meaning that the investors will want to put

    their money in SIF Transilvania more than they will want to put in other companies from the same

    sector.

    2. P/BV

    P/BV=Price/Book Value

    09.30.2010 06.30.2010 03.31.2010 market sector

    0,97 0,78 1,62 1,09 0,97

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    From 30.09.2010 the value of the P/BV indicator is less than 1(reference value of the market)

    meaning that the shares of SIF Transilvania are undervalued. In comparison with the sector P/BVindicator there is no difference, thus the investor can chose any of the companies of the financial

    intermediation sector. As we can see the P/BV indicator of the market is greater than the indicator of

    sector.3. DIV/Y

    DIV/Y=Dividend/Price per share

    09.30.2010 06.30.2010 03.31.2010 market sector

    5,13 6,36 3,49 1,87 3,34

    Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in

    an equity position - in other words, how much "bang for your buck" you are getting from dividends.Investors who require a minimum stream of cash flow from their investment portfolio can secure this cash

    flow by investing in stocks paying relatively high, stable dividend yields. As we can see the table above

    suggests that in 30.09.2010 the investors of the SIF Transilvania were getting 5.13 $ for each dollar

    invested in a equity position. This level is higher than the level of the market and also the level of the

    sector.

    BERMAS SUCEAVA

    1. ROE (Return on Equity):

    ROE=Net profits/Equity

    09.30.2010 06.30.2010 03.31.2010

    11.83% 0.82% -7.23%

    dValue: 6.25 6.25 7.25

    As you can see the indicator ROE has increased from -7.23% to 11.83% during a year. The

    interest rate for BNR at 30.09.2010 was 6.25% which is lower than the level of our ROE indicator in the

    same period. The investor will be more advantaged if he will invest his money in Bermas Suceava

    because his profit will be greater.

    2. EPS

    EPS=Net income/Nr shares

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    09.30.2010 06.30.2010 03.31.2010

    0.0981 0.0832 0.0914

    EPS indicator will help us to compute the price of one share. A decrease or a increase of EPS

    indicator must take into account in both terms. As you can see in the table above the price of one share

    during 2010has increased from 0.0914 to 0.0981. From 2008 the number of shares it is the same21.553.049, meaning that the net income of the company has decreased from 31.03.2010 to 30.09.2010.

    3. Net profit

    Net income =Gross profit deductions

    09.30.2010 06.30.2010 03.31.2010

    2,648.44 163.54 -1,410.43

    The company had a difficult situation at 31.03.2010 because the company was suffering a damage,

    the expenses being more then the revenues. In the period 30.06.2010 the company situation has improved

    and in presents the company rise. This thing shows us that the company is profitable and it can invest in

    new machineries or buildings and in the same tame the company can distribute dividends.

    4. Liquidity index

    Liquidity index=Total assets/Total liabilities

    09.30.2010 06.30.2010 03.31.2010

    1.93 1.48 1.51

    The table above shows us if the company can create money to pay his debts. The companysolvability has increased from 31.03.2010 to 30.09.2010 in an important amount. The causes can be that

    the company is going very well, or the dividends have increased.

    5. Debt to equity ratio

    Debt ratio=Debt/Liabilities

    09.30.2010 06.30.2010 03.31.2010

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    28.15% 49.95% 52.45%

    The percentage of this indicator is good to be close to 50% or even smaller, then the company could

    well manage its debts and will not go bankrupt. Bermas Suceava sustains its activity mainly from the

    equity, the debt ratio in 30. 09.2010 being of 28.15% and has reached even higher levels in 31.03.2010.

    This think mean that the company has some problems with managing his debts.

    Market indicators

    1. PER(price earnings ratio)=Price per share/EPS

    PER=Price per share/EPS

    09.30.2010 06.30.2010 03.31.2010 market sector

    6,25 5,91 9,96 10,68 10.56

    From the table above you can see that the company had a decrease in 2010 from a value of 9.96 to a

    value of 5.91 in 30.06.2010 and from that period until now the value increased to 6.25. So we can say that

    the EPS indicator has decreased facing the period 31.03.2010.The level of the PER indicator is lower than

    the level of the references value or market value which is 15 it can be observed that the shares are

    undervalued. The level of the PER for the entire sector is higher than the one of the PER for Bermas

    Suceava meaning that the investors will want to put their money in companies from the same sector

    more than they will want to put in Bermas Suceava.

    2. P/BV

    P/BV=Price/Book Value

    09.30.2010 06.30.2010 03.31.2010 market sector

    0,54 0,56 0,93 1,09 0.86

    From 30.09.2010 the value of the P/BV indicator is less than 1(reference value of the market)

    meaning that the shares of Bermas Suceava are undervalued. In comparison with the sector P/BV

    indicator there is no difference meaning that the sector indicator is lower then 1, thus the investor can

    chose any of the companies of the financial intermediation sector. As we can see the P/BV indicator of

    the market is greater than the indicator of sector.

    3. DIV/Y

    DIV/Y=Dividend/Price per share

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    09.30.2010 06.30.2010 03.31.2010 market sector

    10,58 10,19 0,00 1,87 2,74

    As we can see the table above suggests that in 30.09.2010 the investors of the Bermas Suceava weregetting 10.58 $ for each dollar invested in a equity position. In 31.03.2010 the investors werent getting

    anything from investing a dollar in a equity position. This present level is higher than the level of the

    market and also the level of the sector.

    ELECTROAPARATAJE BUCURESTI

    1. ROE (Return on Equity):

    ROE=Net profits/Equity

    ROE will be analyzed in the following periods :

    Periods 09.30.2010 06.30.2010 03.31.2010

    ROE Value 11.93 4.85 2.99

    d Value 6.25 6.25 7.25

    In the first period the indicator was very low compared with the interest rate almost half of its

    value so the company wasnt gaining profit from his investments. Passing to the next period the indicator

    trend was one of increase with almost 2% but even though the interest rate has decreased the indicator isstill small and the company hasnt passed on profit. From the second to the third period, the recent one the

    trend was of very good increase the indicator exceeded the interest rate value being almost the double, so

    the investments were good and the company was gaining.

    2. EPS

    EPS=Net income/Nr shares

    09.30.2010 06.30.2010 03.31.2010

    0.0675 0.0314 0.0254

    The general trend of the three period is one of increase the indicator value improved from March to

    June with 0.01 and in the next period with 0.02 so the company is doing well.

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    3. Net profit

    Net income =Gross profit deductions

    09.30.2010 06.30.2010 03.31.2010

    4,339.78 1,600.67 955.74

    The indicator values are continuously increasing is almost it triples it from the first period to thelast one meaning that the company is gaining a better and better result. So is efficient and attractive for

    investors.

    4. Liquidity index

    Liquidity index=Total assets/Total liabilities09.30.2010 06.30.2010 03.31.2010

    0.67 0.49 0.36

    As you can see in the above table the indicator value is less the 1 all three periods but it has an

    increasing trend so the company is recovering it can became solvable and pay his debts on time.

    5. Debt to equity ratio

    Debt ratio=Debt/Liabilities

    09.30.2010 06.30.2010 03.31.2010

    123.82% --- 155.53%

    This indicator value is critical is well above average. From the first period to the third one it has a

    slow decrease but the value it is not close to the normal. There is the tendency to recover but it is not

    enough and its critic to stay in this position because it isnt a long way to bankruptcy.

    Market indicators

    1.PER(price earnings ratio)=Price per share/EPS

    PER=Price per share/EPS

    09.30.2010 06.30.2010 03.31.2010 sector market

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    3.94 4.69 - 13.50 10.68

    From the table above it can be seen that the indicator values are decreasing. The recent value is low

    than his predecessor and even lower compared with the market and sector values so it isnt an attractivecompany, investor from both sector and market arent willing to invest in this company.

    2. P/BV

    P/BV=Price/Book Value

    09.30.2010 06.30.2010 03.31.2010 sector market

    0.26 0.25 0.40 0.86 1.09

    The indicator tendency is of decrease. The last period compared with the sector and market one

    indicates that the shares are under evaluated so the company is not attractive for investors.

    3.DIV/Y

    DIV/Y=Dividend/Price per share

    09.30.2010 06.30.2010 03.31.2010 sector market

    0.00 0.00 0.00 2.74 1.87

    The company offers no cash flow for his shares so investors dont receive dividends. So the

    company it is not attractive to the investors then other companies that offer dividends. The level of thesector is bigger than the market one.

    PETROM

    1. ROE (Return on Equity):

    ROE=Net profits/Equity

    ROE will be analyzed in the following periods :

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    06.30.2010 12.31.2009 09.30.2009

    10.13% 9.73% 10.58%

    In the table it is shown that the indicator ROE has decreased from 10.85% to 9.73% during ayear. The interest rate for BNR at 30.06.2010 was 6.25% which is a lower figure than the level of our

    ROE indicator in the same period. The investor will be more advantaged if he will invest his money in

    Petrom, than put the money in a bank account.

    2. EPS

    EPS=Net income/Nr shares

    06.30.2010 12.31.2009 09.30.2009

    0.0367 0.0242 ---

    EPS indicator will help us to compare the price of one share. The price depends on the net income

    and the number of share. As we can see from our table the price of one share in 30.09.2009 didnt exist

    and from 31.12.2009 the price of one share has started to increase from 0.0242 to 0.0367. From 2006 the

    number of shares of the company is the same 56.644.108.335.

    3. Net profit

    Net income =Gross profit deductions

    06.30.2010 12.31.2009 09.30.2009

    1,631,595.73 1,368,127.63 1,538,649.55

    Between 30.09.2009 and 31.12.2009 the company net profit was decreasing that meaning theexpenses being more than the revenues. In 30.06.2010 the situation improved and in present is even

    better. This thing shows us that the company is profitable and it can distribute dividends or even better

    invest in new companies, which will bring an increase in the company value.

    4. Liquidity index

    Liquidity index=Total assets/Total liabilities

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    06.30.2010 12.31.2009 09.30.2009

    1.60 1.24 1.70

    From liquidity index we understand that the companies are solvability or not, meaning if the

    company can create money to pay its debt. The company solvability has decreased from 30.09.2009 to

    31.12.2009 in an important amount and from 31.12.2009 has started to increase until the present period.

    5. Debt to equity ratio

    Debt ratio=Debt/Liabilities

    06.30.2010 12.31.2009 09.30.2009

    39.60% 45.42% 41.38%

    The percentage of this indicator is good to be close to 50% or even smaller, then the company could

    well manage its debts and will not go bankrupt. Petrom sustains its activity mainly from the equity, thedebt ratio in 30.06.2010 being of 39.60% this being the lowest level between our periods. Because the

    indicator it has the lower value in the present period this thing shows us that the company know how tomanage his debts and will not go bankrupt.

    Market indicators

    1. PER(price earnings ratio)

    PER=Price per share/EPS

    06.30.2010 12.31.2009 09.30.2009 sector market

    12.55 - 53.32 12.50 10.70

    In the above table we can see that the indicator value has a drastic decrease trend from the first

    period till the recent one. Compared with the sector and market level the indicator is good the company isattractive so investors are interested on buying shares. The indicator value compared to the sector gives a

    good image of the company because it is a bit bigger than the average so the company is one of the most

    appealing companies.2. P/BV

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    P/BV=Price/Book Value

    6.30.2010 12.31.2009 9.30.2009 sector market

    1.22 0 1.11 1.21 0.97

    The indicator tendency is to increase. In comparison with the sector is approximately equal so the

    company is one of the most attractive from the mining and quarrying sector and on the market the shares

    are over evaluated.

    3. DIV/Y

    DIV/Y=Dividend/Price per share

    6.30.2010 12.31.2009 9.30.2009 sector market

    0.00 0.00 0.00 0.02 1.52

    The company offers no cash flow for his shares so investors dont receive dividends. So the

    company it is not attractive to the investors then other companies that offer dividends. The market level isbigger than the sector.

    TECHNICAL ANALYSIS

    In finance, technical analysis is a security analysis discipline for forecasting the direction of prices

    through the study of past market data, primarily price and volume.

    In Asia, the oldest example of technical analysis is thought to be a method developed by during

    early 18th century which evolved into the use of candlestick techniques, and is today a main charting tool.Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other

    tools to identify patterns that can suggest future activity.

    It is based on three assumptions:

    1) the market discounts everything

    2) price moves in trends

    3) history tends to repeat itself

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    Technicians believe that all the information they need about a stock can be found in its charts.

    Technical traders take a short-term approach to analyzing the market.

    One of the most important concepts in technical analysis is that of a trend, which is the general

    direction that a security is headed. There are three types of trends: uptrend, downtrends and sideways/horizontal trends. If fundamental analysis suggests what to buy, our technical analysis shows when to

    buy.

    A. LINE CHART

    CLOSING PRICE

    The final price at which a security is traded on a given trading day. The closing price represents themost up-to-date valuation of a security until trading commences again on the next trading day. The

    closing price of one day can be compared to the previous closing price in order to measure market

    sentiment for a given security over a trading day.

    SMA

    A simple, or arithmetic, moving average that is calculated by adding the closing price of the

    security for a number of time periods and then dividing this total by the number of time periods. Short-

    term averages respond quickly to changes in the price of the underlying, while long-term averages are

    slow to react.

    EMA

    A type of moving average that is similar to a simple moving average, except that more weight is

    given to the latest data. The exponential moving average is also known as "exponentially weightedmoving average". This type of moving average reacts faster to recent price changes than a simple moving

    average. The 12- and 26-day EMAs are the most popular short-term averages, and they are used to create

    indicators like the moving average convergence divergence (MACD) and the percentage price oscillator

    (PPO). In general, the 50- and 200-day EMAs are used as signals of long-term trends.

    BOLLINGER

    In the 1980s, John Bollinger, a long-time technician of the markets, developed the technique of

    using a moving average with two trading bands above and below it. Unlike a percentage calculation from

    a normal moving average, Bollinger bands simply add and subtract a standard deviation calculation.

    Standard deviation is a mathematical formula that measures volatility, showing how the stock price

    can vary from its true value. By measuring price volatility, Bollinger bands adjust themselves to market

    conditions. This is what makes them so handy for traders: they can find almost the entire price data

    needed between the two bands.

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    Bollinger bands consist of a center line and two price channels (bands) above and below it. The

    center line is an exponential moving average; the price channels are the standard deviations of the stockbeing studied. The bands will expand and contract as the price action of an issue becomes volatile

    (expansion) or becomes bound into a tight trading pattern (contraction).

    Technicians use moving averages with support and resistance lines to anticipate the price action of astock. Upper resistance and lower support lines are first drawn and then extrapolated to form channels

    within which the trader expects prices to be contained. Some traders draw straight lines connecting either

    tops or bottoms of prices to identify the upper or lower price extremes, respectively, and then add parallel

    lines to define the channel within which the prices should move. As long as prices do not move out of this

    channel, the trader can be reasonably confident that prices are moving as expected.

    B. CANDELSTICK CHART

    The candlestick turns hollow (white or in some cases green) if the close price exceeds the openprice. A filled (black or red) candlestick is seen when the open price exceeds the close one. The body

    (either filled or hollowed) of the candlestick is formed out of the difference between the open price and

    close price whether the shadows, which are thin lines at the top and at the bottom of the candlestick, give

    the information about the trading range during the candlestick's period. The upper shadow ends at the

    level showing the high price of the period and the lower shadow ends at the level of low price.

    When the candlestick has one or two very long shadows, the situation is called the Long-legged

    Doji. It signalizes that the market has reached its tops. The Rickshaw Man occurs when the open andclose are located in the session's trading range middle. It is thought that this situation shows the trendlosing its direction. The end of the downtrend forms the Bullish Engulfing Pattern. The white candlestick

    has its open price below and the close price above the ones of the previous day black candle body. This

    total exceeding of the previous day's values says that that the enormous pressure of the buyers overcomes

    the one of the sellers. The Bearish Engulfing Pattern is an opposite process to the bullish one. It occurs

    when an uptrend comes to an end. The black body of an actual candlestick gets longer than the white

    body of the previous day one. This process is the sign of the bears winning. When a bearish pattern lasts

    for two days and reaches the end of an upturn as well as the highest level of an overloaded are of trading,

    then the Dark Cloud Cover occurs. In this case the first day gives a reliable white candlestick and thesecond day opening price exceeds any of the values of the previous day.

    ANTIBIOTICE IASI

    For the technical analyses we will work with two types of graphics: the line one and the candle.

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    Line Chart

    For the interpretation of this graphic we will use the indicators: SMA 20, EMA 26, Bollinger 20, RSI 14;

    Chart interpretation

    Mobile average (SMA 20): it can be see that the price has big fluctuations and mobile average is

    plain then the price, this below it is following the price value with a delay , because the number of days

    that it is calculate the SMA. This delay makes that all the mobile averages to be succeeded indicators andalways to be beyond price moving. At some days after the price moving appeared you can see its effect

    on mobile average. For a low trend the price is under the average and for an uptrend the price is over

    average. Before 05.08.2010 we can observe that the SMA it is on growth and the price is rising. In the

    case that the price it exceeds the mobile average, this can represent am over evaluated, with other words a

    signal of buying, and in the case of the graphic above we have such a situation. In the case that the priceis under the mobile average we can appreciate that the shares are under evaluated, and this can represent a

    signal of selling. In the period 27.09.2010 the price has reached a maximum value and the mobile average

    was increasing.

    Exponential moving average (EMA 26): It can be observed that we have a quietly line it tends to

    follow the moving average. As the period of calculation for EMA it is lesser the EMA it can be follow the

    price variations. Same with the moving average the EMA indicates an over evaluation of the shares when

    the quote is over the exponential mobile line, and under evaluated otherwise. In our graphic we can see

    that we use 7.4% from the actual value calculated from the formula 2/(26+1) and 92.6% from previousmoving average.

    Bollinger bands (20): When the price has reached the maximum value the band has expended (thatreflects an increased volatility), the case of September month to a quotation of 0.650, closer to the

    maximum reached in that period. At the end of the year the band has expended again and the price valuewas overlapped with the top band.

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    Candlestick chart

    Chart interpretation

    For the interpretation of the candlestick we will analyze the last 4 periods like it is shown in the

    picture above. The price of the Antibiotice Iasi had a worst period between 02.08.2010 until 07.10.2010

    when the price has increased and now is still increasing.

    The first candlestick (inverted hammer) is green and has a little tile that suggests us a higher

    pressure of sells. This type of candle appears of a positive trend and this shows that the next period willbe a negative trend. The candlestick has a long body and for this reason the trend is strong.

    The second candlestick (Morubozu) is a red one and dont have any tile, this thing confirms the

    negative trend. The body is long and for this reason the trend is strong.

    The third candlestick has the body red and very small with a tiny tile that suggests a strong symbol.

    This shadow means that the price variations are accelerated.

    And the last one of the candlestick it is also red that means it in a negative trend. The tiles of the

    candle body are long, for this we understand that the symbol is weak, this announce a weak trend and a

    change in future.

    SIF TRANSILVANIA

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    For the technical analyses we will work with two types of graphics: the line one and the candle.

    Line Chart

    For the interpretation of this graphic we will use the indicators: SMA 20, EMA 26, Bollinger 20, RSI 14.

    Chart interpretation

    Simple moving average SMA - For this analysis we set a time frame of 20 days. It has a plain

    evolution compared with the big price fluctuations. Also noted is the fact that the average follow withsome delay value price, the delay is given by the number of days that is calculated SMA, namely 20 days.

    This delay makes all mobile average to be tracking indicators and always be behind the price movement.

    For a decreasing trend the price is situated under the average so it has a lower trend and for a increasing

    trend the price is situated above the average so it has an upper trend. In the last period the quotation was

    below the line from 20.10.2010 until 10.12.2010 but from that moment the trend changes becoming an

    upper one and the average are following it. Because it is an tracking indicator results that the moving

    average it is useful only when the price is following a trend.Exponential moving average EMA It pursues closer the price but following a certain delay value

    price, which is given by the number of days, 26 days. In computing this indicator considerable

    importance is given to the current value of shares.

    BOLLINGER BANDS In the first period the Bollinger bands interval dimensions were big

    indicating a high volatility. In that period the price registered his biggest value 0.620, reaching the

    Bollinger bands. In the following period the band approached indicating a volatility reduction. The

    following period was marked of the slow increase in distance between the bands indicating a rising

    volatility. During the entire period there is an alternation of high and small volatility.

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    Candlestick chart

    Chart interpretation

    For the chart interpretation we have chosen the last 4 candles 6.01.2011 until 10.010.2011.

    The first candle is green meaning that it is a powerful increasing trend with a small shadow on the

    top indicating a small fluctuation so speculations can not be made. The following candle is a star with a

    shadow not so big in the bottom so there werent fluctuations and can be made speculations also the

    volume for this candle is low. It can indicate a trend change. The third candle is green so the trend ismaintained even though the precedent candle was a star. It has a little shadow on the bottom. And the last

    candle is also green and has a big body with no shadows indicating a strong increase and thanks to the

    market pressure the trend will be the same in the following period.

    BERMAS SUCEAVA

    For the technical analyses we will work with two types of graphics: the line one and the candle.

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    Line Chart

    For the interpretation of this graphic we will use the indicators: SMA 20, EMA 26, Bollinger 20, RSI 14.

    Chart interpretation

    This type of chart will analyze the following indicators: closing price, SMA indicator, Simple

    Moving Average, EMA, Exponential Moving Average and Bollinger Bands.

    SMA indicator: The SMA indicator is computed for an interval of 20 days delay (is behind theclosing price with 20 days, so we can see that is out of phase). The average of the price is smoother than

    the value of the prices which has important fluctuations. At the end of August we can observe an increase

    of the closing price, the SMA indicator being below the line corresponding to the closing price, but for

    the period October November we can see that the SMA indicator is above the line of closing price.

    Simple Moving Average is useful only if the company is experiencing a trend regarding the closing price.

    EMA indicator: The EMA indicator, computed with a delay of 26 days has almost the same

    behaviour as the SMA indicator, following the evolution of the closing price. The indicator was computedwith the help of the formula 2/(26+1), so we have a percentage of 7.4 implication of the actual moving

    value and the rest implication of the previous moving average. Exponential Mobile Average highlightsthe importance of the current value of the stock exchange.

    Bollinger Bands: We have an interval of 20 days for the Bollinger indicator which indicates the

    volatility of the price of the shares. For instance, when the closing price of a Forex market moves over its

    upper Bollinger Band, it usually increases in that direction. Bollinger Bands also helps to find out when

    trend reversals may happen. A reversal is usually characterized by new peaks or falls outside of the bands

    followed by another peak or fall inside the bands. We can observe for the period 1-10.12.2010 that thewidth of the bands is shrinking, forecasting an increase of the price for the following period.

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    Candlestick chart

    Chart interpretation

    The price of the Bermas Suceava company has suffered from 01.08.2010 until the end of the

    year many fluctuations, the most important increase was in the month December. The lowest price was

    reached in October. In the current period, the increase of the price should attract new investors who want

    to take advantage of this situation. The price will increase until this will not be possible anymore and the

    price will suffer a decrease. We analyzed four of the cadles stick, which are more recent, in order to

    establish the trend of the company.

    From the candles shown in the picture we can observe that the price hasnt suffered any

    fluctuations in the last period, following the ascending trend registered in the previous days.

    ELECTROAPARATAJE BUCURESTI

    For the technical analyses we will work with two types of graphics: the line one and the candle.

    Line Chart

    For the interpretation of this graphic we will use the indicators: SMA 20, EMA 26, Bollinger 20, RSI 14.

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    Chart interpretation

    The level of the price of the shares of Electroaparataje Bucuresti in the period 14.07.2010

    01.01.2011 had a variation between 0.1 and 0.2. We can say that the company had just small fluctuations,

    the highest price being reached in November.

    SMA indicator: The Simple Moving Average for Electroaparataj for a period of 6 month isrepresented by a smooth line, which follows with a delay of 20 day the prices of the shares. For the period

    August September the SMA indicator is above the price line, from September to November is belowand continuing to be below after a short period of time at the beginning of the month.

    EMA indicator: EMA indicator is following almost the same trend as the SMA indicator, being

    computed with a delay of 26 days. EMA is similar to the SMA, the difference is that the last value has a

    bigger weight in the calculation of EMA. EMA has appear in order to remove the major disadvantage ofthe SMA the delay. EMA is closer to the movement of the price.

    Bollinger Bands: From the Bollinger Bands can be observed 2 ascending trends that have started in

    September and in November. The band width has shrink, predicting an increase in the closing price. InJuly and in December the Bollinger bands show a decrease in the closing price of the shares.

    Candlestick chart

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    Chart interpretation

    From the candles shown in the picture we can observe that the price hasnt suffered any fluctuations

    in the last period, following the ascending trend registered in the previous days. The price for close it is

    the same with the price for open.

    For the second candlestick we understand that because it has a little body and a tail that it is small

    the symbol is strong and the price variations are accelerated.

    On the next candle the body is big and it is a positive trend. It doesnt have any shadow (Morubozu)

    and the next period will be a positive one. This thing it is shown in the picture because the next candle it

    is green and it is on positive trend and possible followed from a star candle.

    PETROM

    For the technical analyses we will work with two types of graphics: the line one and the candle.

    Line Chart

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    For the interpretation of this graphic we will use the indicators: SMA 20, EMA 26, Bollinger 20, RSI 14

    Chart interpretation

    Mobile average (SMA 20): For the interpretation of mobile average we have established an interval

    for 20 days. It can be observed that the mobile average is plain and it follows the trajectory of the price.

    The mobile average has been constant from the end of September until the beginning of December. Also

    we can say that the line of mobile average it is a little bit beyond the price line, and that it is given of the

    number of days that it is calculated the SMA. In the graphic it can be observed that the price is sometimesunder the mobile average line, that means there is a weak trend and sometimes over the mobile average

    line, which means it is a strong trend.

    Exponential moving average (EMA 26): We have approximately the same situation like SMA line.

    The line is plain and it follows the price value with some delay because the number of days, in our case

    26 days. The exponential mobile average grant a big importance to the current curs of shares.

    Bollinger bands: For this instrument of technical analyze we have a interval of 20 days. It ca be

    observed that at the beginning of the period the interval was greater and from end of September and

    beginning of November until middle of December the interval vas constant and in the same time lower,which led to a decrease of the price, that produce a reduction of the volatility .

    Candlestick chart

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    Chart interpretation

    The first candle is green with a big body and a small shadow on top which means that the trend

    might change suffering a sudden change. The next one is red with a big body meaning that it was a big

    decrease and a small shadow on top suggesting that there was no volatility so the trend is changing. These

    two candles indicates the big pressure that is on the market caused by the reach of a top level wich is

    always fallowed by a decrease period. The third one is also red but with a shadow on the bottom that

    means a there exists volatility so the speculations is that there will be an increase. The last is green with a

    small body but a big shadow on top so there is volatility and a very big volume so the trend will be anupper one.

    RUMORS AND NEWS

    ANTIBIOTICE IASI

    The company planes to penetrate new market. The intention is to export medicines in U.S.A. The BCR annalists wager that it will be a long term increase of 7% on the medicine market.

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    The company analysts estimates a 20mil $ profit in the next 5 years from the exports in

    U.S.A.

    SIF TRANSLIVANIA Buys shares at Property Found

    The owners estimate a profit growth

    Property Found will be listed on the stock exchange on 25 January 2011

    BERMAS SUCEAVA

    30% Profit rise registered in the last year

    Has brought dividend yields of 20% to investors

    ELECTROAPARATAJ BUCURESTI

    The shares of Electroaparataj Bucuresti have registered an increase in the period 10

    November 10 December 2010 of 26.23% until they reached 0,16 lei/share.

    The profit of Electroaparataj Bucuresti has increased by 12.3 times (4,339 mil. RON) in

    the first 9 months of the year 2010.

    PETROM

    OMV Petrom (SNP), the biggest Romanian company from the stock exchange, it didnt

    finalized the procedure of actions withdrawal, which vote in august month against company

    division, write the Financial Newspaper.

    Petrom , it is in negotiations for the selling of the headquarters from Straulesti- a building inwhich the employees didnt moved. It might be the year transaction: in the market its

    speak about an offer of 100 mill euro.

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    BIBLIOGRAPHY

    www.bvb.ro

    www.ktd.ro

    www.investopedia.com

    www.infobursier.ro

    www.wikipedia.ro

    http://www.bvb.ro/http://www.ktd.ro/http://www.investopedia.com/http://www.infobursier.ro/http://www.bvb.ro/http://www.ktd.ro/http://www.investopedia.com/http://www.infobursier.ro/