Investment Decision Analysis for IPG Photonics Corporation

By: Stacey Fletcher

FIN6409-1
Financial Management

June 24, 2013

Everest University

Introduction

The premise of this paper is to assume that I have just graduated from the MBA program and have taken a job as a fund manager for a well-known investment banking house where I have been given $300 million fund to manage/invest. The type of fund I am managing is a pension/retirement fund of long-term perspective and tolerable of moderate risk for loss of capital, it has a required annual return of 9%. As such, in order to mitigate the investment risk, I am instructed to make 12 investments of $25 million dollars each. My first assignment is to preform an analysis on a company of my choice to determine if the fund I am managing should make the investment of $25 million in the stock of this company, and prepare a report. My analysis will be primarily based upon the company's most recent 3 years annual and quarterly SEC filings, and will be comprised of calculations of financial ratios for cash flows and profitability, as well as, forecast performance measures of earnings, analysts' reports and related articles. The decision to invest or not invest will be based upon and supported by this analysis. The company I have chosen for my analysis, IPG Photonics Corporation ,went public in 2006 and is listed on the NASDAQ represented by ticker symbol IPGP. IPG is currently headquartered in Oxford, Massachusetts, but was originally founded in Russia in 1990 by physicist Valentin P. Gapontsev, Ph. D., as a small optics company (Wikipedia, 2013). Dr. Gapontsev was given recognition in 2009, by the Laser Institute of America, as "the father of the fiber-laser industry as it is known today," and, in 2010, he was the recipient of the Russian Federation National Award in Science and Technology