Stock Project
For the purpose of this project, the stock chosen to invest in was Media Arts Group Inc. (MDA). It is a publicly traded company and it has been traded in the New York Stock Exchange since December of 1998. This company was incorporated in Delaware1993. It is a designer, manufacturer, marketer, licensor and distributor of fine art and it went public in August of 1994 at $7.25 a share. The artwork sold includes canvas and paper lithographs and art inspired gift products derived from the works of Thomas Kinkade. Media Arts Group only promotes the work of Thomas Kinkade. The company has sold Thomas Kincaid art for over ten years and these products have proven to be the strength of their business plan, since he has become the most recognized and best selling living artist in the world. The artist is known for his warm and inviting renditions of quaint cottages and sophisticated cityscapes.
MDA has currently 51.85 million shares, none of which are preferred stocks. The company employs over 450 people between its corporate headquarters and production facility located in Morgan Hill, California. MDA has not paid dividends on its common stock and will be using any earnings for diversification efforts. Their major enterprise is art and gift products, but their future goal is to diversify into a comprehensive creative content management company, going beyond their current art publishing and gift products. This will include music, film, television, literature and multimedia.
Average customers are 35 to 65 years old, married with children, and with a household income that exceeds $55,000 a year. The price range of the works is from $20 for a book to $15,000 for limited edition prints that are hand enhanced by Mr. Kinkade. The company’s strategic partners include Avon, QVC, Hallmark, La-Z-Boy, Kincaid Furniture and Warner Books. The company does not sell franchises; rather it licenses distributors to sell their products. It also sells products on-line at www.thomaskinkade.com.
The company was chosen because it was estimated that it had a potential for growth and that a quick return on the investment would be possible. It has a very good position in the marketplace because of its leading edge technology and aggressive marketing strategies and sales program. It has a distribution network of over 4,500 dealers and very good relationships with some of the major companies in the gift industry.
The result of our investment from October 27th to November 5th was a total profit of $9,918.00. With just our initial investment capital of $12,000, our group was able to achieve an 83.65 percent profit margin on this small investment.
Overall, it was a very successful venture because in a little less than two weeks we were able to almost double our investment. The only regret is that this venture was only make believe and that we did not actually invest on this stock.
