A Fundamental Analysis of Lotus Bakeries NV

Details

Supervisors

Platten, Isabelle

Faculty

Louvain School of Management

Degree label

Master [120] : ingénieur de gestion, à finalité spécialisée

Abstract

The first role of financial markets is the allocation of ownership of an economy’s capital stock. An optimal market offers investors securities that represent ownership of firms’ activities under the assumption that prices at any time “fully reflect” all available information. Such an optimal market is called “efficient”, this theory’s name is the efficient market hypothesis (EMH) (Fama, 1970). In case all information is already incorporated into assets’ prices, there do not exist ways to beat the market. Indeed, this would mean that there are no undervalued or overvalued securities available (Investopedia, 2022). However, many believe that capital markets are also ruled by emotions such as fear and greed. Tuckett (2009) argues that the 2008 Financial crisis was a result of an inability of the financial market to manage the emotions generated by assets. The goal of this thesis is not to determine whether capital markets are efficient or not but to explore the role of an equity analyst who tries to determine the valuation of a stock. Compared with a financial analyst, it focuses on companies rather than on general market trends. Equity analysts are usually experts in a field, sector, or market capsize. Their end goal is to determine a recommendation, to buy, sell or hold a specific ticker. In my thesis, the objective is to analyse the value and to determine such a recommendation for the company Lotus Bakeries NV (LOTB.BR) on the 17th of May 2022.