Value Investing During an Impending Recession: A Case Study of Pegasystems

Abstract

The purpose of this paper is to use fundamental analysis to analyze a stock, Pegasystems. I will use value investing principles to determine whether PEGA is a good investment or not. First, I will discuss the basics of value investing. Second I will provide a macroeconomic overview of the current economy. Third, I will apply the first two sections to a case study of Pegasystems to conclude with an investment hypothesis. For my research, I instituted a down-up method. Normally, a top-down method is used when analyzing stocks. First the entire market is analyzed, then growth industries are identified and finally sector leading companies in these growth industries are picked as potential strong growth stocks. However for my research I first started with the company Pegasystems. Since this was my first time doing any research of this nature, my mentor at Shaker Investments recommended Pegasystems because he had previously evaluated this stock. This proved helpful to me as I was able to bounce ideas off of him while doing my financial analysis of the company.