AC Investment Research

FNV:TSX Franco-Nevada Corporation Research Report

Outlook: Franco-Nevada Corporation assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Hold
Time series to forecast n: 27 Dec 2022 for (n+6 month)
Methodology : Modular Neural Network (Emotional Trigger/Responses Analysis)

Abstract

With the advent of machine learning, numerous approaches have been proposed to forecast stock prices. Various models have been developed to date such as Recurrent Neural Networks, Long Short-Term Memory, Convolutional Neural Network sliding window, etc., but were not accurate enough. Here, the aim is to predict the price of a stock and compare the results obtained using three major algorithms namely Kalman filters, XGBoost and ARIMA.(Sable, R., Goel, S. and Chatterjee, P., 2019, December. Empirical study on stock market prediction using machine learning. In 2019 International conference on advances in computing, communication and control (ICAC3) (pp. 1-5). IEEE.) We evaluate Franco-Nevada Corporation prediction models with Modular Neural Network (Emotional Trigger/Responses Analysis) and Polynomial Regression1,2,3,4 and conclude that the FNV:TSX stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Hold

Key Points

  1. Prediction Modeling
  2. Buy, Sell and Hold Signals
  3. How do you pick a stock?

FNV:TSX Target Price Prediction Modeling Methodology

We consider Franco-Nevada Corporation Decision Process with Modular Neural Network (Emotional Trigger/Responses Analysis) where A is the set of discrete actions of FNV:TSX stock holders, F is the set of discrete states, P : S × F × S → R is the transition probability distribution, R : S × F → R is the reaction function, and γ ∈ [0, 1] is a move factor for expectation.1,2,3,4


F(Polynomial Regression)5,6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Modular Neural Network (Emotional Trigger/Responses Analysis)) X S(n):→ (n+6 month) r s rs

n:Time series to forecast

p:Price signals of FNV:TSX stock

j:Nash equilibria (Neural Network)

k:Dominated move

a:Best response for target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do AC Investment Research machine learning (predictive) algorithms actually work?

FNV:TSX Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: FNV:TSX Franco-Nevada Corporation
Time series to forecast n: 27 Dec 2022 for (n+6 month)

According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Hold

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

IFRS Reconciliation Adjustments for Franco-Nevada Corporation

  1. An entity that first applies these amendments after it first applies this Standard shall apply paragraphs 7.2.32–7.2.34. The entity shall also apply the other transition requirements in this Standard necessary for applying these amendments. For that purpose, references to the date of initial application shall be read as referring to the beginning of the reporting period in which an entity first applies these amendments (date of initial application of these amendments).
  2. Sales that occur for other reasons, such as sales made to manage credit concentration risk (without an increase in the assets' credit risk), may also be consistent with a business model whose objective is to hold financial assets in order to collect contractual cash flows. In particular, such sales may be consistent with a business model whose objective is to hold financial assets in order to collect contractual cash flows if those sales are infrequent (even if significant in value) or insignificant in value both individually and in aggregate (even if frequent). If more than an infrequent number of such sales are made out of a portfolio and those sales are more than insignificant in value (either individually or in aggregate), the entity needs to assess whether and how such sales are consistent with an objective of collecting contractual cash flows. Whether a third party imposes the requirement to sell the financial assets, or that activity is at the entity's discretion, is not relevant to this assessment. An increase in the frequency or value of sales in a particular period is not necessarily inconsistent with an objective to hold financial assets in order to collect contractual cash flows, if an entity can explain the reasons for those sales and demonstrate why those sales do not reflect a change in the entity's business model. In addition, sales may be consistent with the objective of holding financial assets in order to collect contractual cash flows if the sales are made close to the maturity of the financial assets and the proceeds from the sales approximate the collection of the remaining contractual cash flows.
  3. Paragraphs 6.9.7–6.9.13 provide exceptions to the requirements specified in those paragraphs only. An entity shall apply all other hedge accounting requirements in this Standard, including the qualifying criteria in paragraph 6.4.1, to hedging relationships that were directly affected by interest rate benchmark reform.
  4. As noted in paragraph B4.3.1, when an entity becomes a party to a hybrid contract with a host that is not an asset within the scope of this Standard and with one or more embedded derivatives, paragraph 4.3.3 requires the entity to identify any such embedded derivative, assess whether it is required to be separated from the host contract and, for those that are required to be separated, measure the derivatives at fair value at initial recognition and subsequently. These requirements can be more complex, or result in less reliable measures, than measuring the entire instrument at fair value through profit or loss. For that reason this Standard permits the entire hybrid contract to be designated as at fair value through profit or loss.

*International Financial Reporting Standards (IFRS) adjustment process involves reviewing the company's financial statements and identifying any differences between the company's current accounting practices and the requirements of the IFRS. If there are any such differences, neural network makes adjustments to financial statements to bring them into compliance with the IFRS.

Conclusions

Franco-Nevada Corporation assigned short-term Ba1 & long-term Ba1 estimated rating. We evaluate the prediction models Modular Neural Network (Emotional Trigger/Responses Analysis) with Polynomial Regression1,2,3,4 and conclude that the FNV:TSX stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Hold

FNV:TSX Franco-Nevada Corporation Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementB2B1
Balance SheetBaa2Baa2
Leverage RatiosCaa2B1
Cash FlowBaa2B3
Rates of Return and ProfitabilityBa2Baa2

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Prediction Confidence Score

Trust metric by Neural Network: 90 out of 100 with 704 signals.

References

  1. Bai J. 2003. Inferential theory for factor models of large dimensions. Econometrica 71:135–71
  2. Clements, M. P. D. F. Hendry (1997), "An empirical study of seasonal unit roots in forecasting," International Journal of Forecasting, 13, 341–355.
  3. K. Boda, J. Filar, Y. Lin, and L. Spanjers. Stochastic target hitting time and the problem of early retirement. Automatic Control, IEEE Transactions on, 49(3):409–419, 2004
  4. Scott SL. 2010. A modern Bayesian look at the multi-armed bandit. Appl. Stoch. Models Bus. Ind. 26:639–58
  5. Mikolov T, Sutskever I, Chen K, Corrado GS, Dean J. 2013b. Distributed representations of words and phrases and their compositionality. In Advances in Neural Information Processing Systems, Vol. 26, ed. Z Ghahramani, M Welling, C Cortes, ND Lawrence, KQ Weinberger, pp. 3111–19. San Diego, CA: Neural Inf. Process. Syst. Found.
  6. F. A. Oliehoek and C. Amato. A Concise Introduction to Decentralized POMDPs. SpringerBriefs in Intelligent Systems. Springer, 2016
  7. Künzel S, Sekhon J, Bickel P, Yu B. 2017. Meta-learners for estimating heterogeneous treatment effects using machine learning. arXiv:1706.03461 [math.ST]
Frequently Asked QuestionsQ: What is the prediction methodology for FNV:TSX stock?
A: FNV:TSX stock prediction methodology: We evaluate the prediction models Modular Neural Network (Emotional Trigger/Responses Analysis) and Polynomial Regression
Q: Is FNV:TSX stock a buy or sell?
A: The dominant strategy among neural network is to Hold FNV:TSX Stock.
Q: Is Franco-Nevada Corporation stock a good investment?
A: The consensus rating for Franco-Nevada Corporation is Hold and assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of FNV:TSX stock?
A: The consensus rating for FNV:TSX is Hold.
Q: What is the prediction period for FNV:TSX stock?
A: The prediction period for FNV:TSX is (n+6 month)

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