Presentation December 9 th 2015 Akhil Sood Akhilesh Kumar Alex Sadowski Christopher Norris Edward Laclaustra Jason Harris Jifeng Hu Lingfan Sun Neel Munot Yun Xie ID: 1020824
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1. University of Connecticut MBA SMF PresentationDecember 9th 2015Akhil Sood, Akhilesh Kumar, Alex SadowskiChristopher Norris, Edward Laclaustra, Jason Harris, Jifeng Hu, Lingfan Sun, Neel Munot, Yun Xie ,,
2. Investment Philosophy and Strategy Process & Procedure Risk ManagementEconomic OutlookPortfolio AnalysisPerformance Selected HoldingsAgenda
3. Value Investing Emphasis on Fundamental Analysis5-Year Investment HorizonCorporate Social ResponsibilityInvestment Philosophy and Style
4. Bottom-Up Investment Approach35-40 Stocks When Fully Invested4 Stock Pitches Per Investment ManagerCurrently Invested in 17 Stocks (~46% Invested)No Bond InvestmentInvestment Strategy
5. Process & Procedure
6. Risk Management
7. Global growth forecast at 3.3% in 2015 and 3.8% in 2016Forces are now more redistributive in nature:Sharp declines in oil pricesDiverging trajectories of the major economiesStrengthening of the U.S. dollar and the weakening of the euro and yen Outlook for advanced economies is showing signs of improvementDisposable incomes from lower oil prices Accommodative monetary policyGrowth in emerging market economies is softeningAdjustment to diminished medium-term growth expectationsLower revenues from commodity exportsEconomic Outlook
8. U.S. economy is in the middle of what could turn out to be the longest expansionLeading economic indicators point towards mid cycle position Yield CurveCharts Source: Bank of America Capital Markets Outlook http://corp.bankofamerica.com/documents/16307/0/capital_market_outlook.pdf Economic Outlook - US
9. Leverage & household obligation Economic Outlook - US
10. Wages & Consumer ConfidenceEconomic Outlook - US
11. Portfolio Status I :17 Stocks
12. Portfolio Status II : Return
13. Portfolio Analysis: Sector Allocation
14. IndustryCompanyDate PurchasedShares HeldCurrent PricePortfolio WeightCurrent Position ValueConsumer Discretionary23.5%201,182Leisure ProductsPolaris29-Oct-15450105.735.9%47,601Media & Entertainment Disney29-Oct-15435119.425.8%50,195Household DurablesToll Brothers29-Oct-15140037.105.9%53,284Specialty RetailCarmax6-Nov-1587556.635.9%50,103Consumer Staples11.9%101,809Food & Staples RetailingCVS Health17-Nov-1553591.565.9%51,066TobaccoReynolds American 19-Nov-15110047.036.0%50,743Energy5.9%53,406Oil, Gas & Consumable FuelsMarathon Petroleum 19-Nov-1590056.415.9%53,406Financials11.8%104,577Consumer FinanceCapital One18-Nov-1565078.825.9%51,883Real Estate Investment TrustsAvalonBay 19-Nov-15285181.505.9%52,694Health Care11.6%98,423BiotechnologyGilead Science6-Nov-15460106.365.8%48,691Health Care Equ & SupMedtronic11-Nov-1565076.565.8%49,732Industrials11.6%98,452Aerospace & DefenseUTX29-Oct-1550098.095.8%48,350Air Freight & LogisticsUPS6-Nov-15480103.595.8%50102.4Information Technology6.0%51,630Tech Hard, Storage & PeriphApple Inc18-Nov-15440117.756.0%51,630Materials5.9%50,989Construction MaterialsMartin Marietta 18-Nov-15320159.925.9%50,989Telecommunication Services5.9%50,655Diversified Telecomm ServicesAT&T19-Nov-15150033.465.9%50,655Utilities6.0%58,652Electric UtilitiesITC Holding 19-Nov-151,550.033.306.0%58,652Portfolio Analysis: Positions
15. Portfolio Analysis (Invested Portfolio): Statistics SMF PortfolioS&P 500Difference Dividend Yield1.912.09-0.18Price to Earning16.3018.66-2.36Price to Cash flow12.2910.901.39EV/Sales2.072.22-0.15EV/EBITDA11.1212.68-1.56Profit Margin9.108.320.78Return on Assets4.852.722.13Beta0.961.00-0.04
16. Portfolio Performance: Individual Returns
17. Portfolio Performance: Invested PortfolioPortfolio StatisticsSMF Invested PortfolioS&P 500› Return Total Return1.540.88Mean Return (Annualized)28.7316.21Mean Excess Return (Annualized)10.78 › Risk Standard Deviation (Annualized)12.2812.18Downside Risk (Annualized)8.487.90› Risk/Return Sharpe Ratio1.600.92Jensen Alpha8.98 Information Ratio1.88
18. Sep 22, 2015December 1, 2015ETF1,860,328.771,146,099Equity- $869,774Cash327 $8,067Total1,860,655.77$2,023,940Return 8.78%Portfolio Performance: Total Portfolio
19. Consumer Discretionary: Leisure ProductsUnrealized Loss of 5.3%Reason for Underperformance Strong Dollar, softening economies abroadSluggish Oil and Agricultural MarketsConstraints for fast growing motorcycle businessFuture Outlook Zacks Rating: 1.85 (1-Buy, 5-Sell) 12/3/15Operational Constraints LiftedTaking market share from Harley DavidsonNew ORV Mfg Facility, JV for Emerging MarketsWorst Performing Stocks: Polaris
20. Consumer Discretionary: Leisure ProductsUnrealized gain of 14.7%Reason for over performance Exploring sale optionsSole U.S. Transmission only companyFuture Outlook Generate a lot of interest from infrastructure fundsUtility M&A are up among weaken electricity salesFERC Judge to decide on ROE reduction in Mid-DecBest Performing Stock: ITC Holding
21. Dr. Chinmoy Ghosh Dr. Michel Rakotomavo Laurel Grisamer Chris WilkosInvestment Advisory Board MembersUConn FoundationAcknowledgements
22. Thank YouQ&A
23. Stock/S&P 500 ComparisonAAPLAT&T
24. Stock/S&P 500 ComparisonAVBCOF
25. Stock/S&P 500 ComparisonCVSDIS
26. Stock/S&P 500 ComparisonGILDITC
27. Stock/S&P 500 ComparisonKMXMDT
28. Stock/S&P 500 ComparisonMLMMPC
29. Stock/S&P 500 ComparisonPIIRAI
30. Stock/S&P 500 ComparisonTOLLUPS
31. Stock/S&P 500 ComparisonUTX