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As of July 30 th , 2018- Subject to change. As of July 30 th , 2018- Subject to change.

As of July 30 th , 2018- Subject to change. - PowerPoint Presentation

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As of July 30 th , 2018- Subject to change. - PPT Presentation

August 2018 Stock Picks TOP 25 STOCKS August18     RANK TICKER NAME SECTOR INDUSTRY 1 NVDA NVIDIA Corporation 10 Technology 1033 Semiconductors 2 V Visa Inc 09 Services 0909 Business Services ID: 759827

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Slide1

As of July 30th, 2018- Subject to change.

August 2018 Stock Picks

TOP 25 STOCKS

August-18

 

 

RANK

TICKER

NAME

SECTOR

INDUSTRY

1

NVDA

NVIDIA Corporation

10 - Technology

1033 - Semiconductors

2

V

Visa Inc

09 - Services

0909 - Business Services

3

PYPL

Paypal Holdings Inc

07 - Financial

0703 - Consumer Financial Services

4

WLK

Westlake Chemical Corporation

01 - Basic Materials

0106 - Chemicals - Plastics and Rubbers

5

ISRG

Intuitive Surgical, Inc.

08 - Health Care

0812 - Medical Equipment & Supplies

6

COST

Costco Wholesale Corporation

09 - Services

0963 - Retail (Specialty Non-Apparel)

7

BABA

Alibaba Group Holding Ltd

09 - Services

0948 - Retail (Catalog & Mail Order)

8

LNG

Cheniere Energy, Inc.

06 - Energy

0609 - Oil & Gas Operations

9

AMZN

Amazon.com, Inc.

09 - Services

0948 - Retail (Catalog & Mail Order)

10

HD

Home Depot Inc

09 - Services

0960 - Retail (Home Improvement)

11

AAPL

Apple Inc.

10 - Technology

1003 - Communications Equipment

12

GOOGL

Alphabet Inc

10 - Technology

1018 - Computer Services

13

URI

United Rentals, Inc.

09 - Services

0939 - Rental & Leasing

14

FANG

Diamondback Energy Inc

06 - Energy

0609 - Oil & Gas Operations

15

DEO

Diageo plc (ADR)

05 - Consumer Non-Cyclical

0503 - Beverages (Alcoholic)

16

FB

Facebook Inc

10 - Technology

1018 - Computer Services

17

ATVI

Activision Blizzard, Inc.

10 - Technology

1036 - Software & Programming

18

GD

General Dynamics Corporation

02 - Capital Goods

0203 - Aerospace and Defense

19

KEY

KeyCorp

07 - Financial

0727 - Regional Banks

20

BAC

Bank of America Corp

07 - Financial

0727 - Regional Banks

21

FDX

FedEx Corporation

11 - Transportation

1103 - Air Courier

22

SYK

Stryker Corporation

08 - Health Care

0812 - Medical Equipment & Supplies

23

GS

Goldman Sachs Group Inc

07 - Financial

0718 - Investment Services

24

C

Citigroup Inc

07 - Financial

0718 - Investment Services

25

DWDP

DowDuPont Inc

01 - Basic Materials

0103 - Chemical Manufacturing

Slide2

August 2018 Growth Stock Picks

As of July 30th, 2018. Subject to change.

Slide3

August 2018 Growth Stock Picks

As of July 30th, 2018. Subject to change.

Slide4

August 2018 Growth Stock Picks

As of July 30th, 2018- Subject to change.

Slide5

August 2018 Growth Stock Picks

As of July 30th, 2018- Subject to change.

Slide6

Apple Inc. (AAPL)

Apple Inc. designs, manufactures, and markets mobile communication and media devices, and personal computers to consumers, and small and mid-sized businesses; and education, enterprise, and government customers worldwide. The company also sells related software, services, accessories, networking solutions, and third-party digital content and applications. It offers iPhone, a line of smartphones; iPad, a line of multi-purpose tablets; and Mac, a line of desktop and portable personal computers, as well as operating systems comprising iOS, macOS, watchOS, and tvOS. The company also provides iWork, an integrated productivity suite that helps users create, present, and publish documents, presentations, and spreadsheets; and other application software, such as Final Cut Pro, Logic Pro X, and FileMaker Pro. In addition, it offers Apple TV that connects to consumers' TV and enables them to access digital content directly for streaming high definition video, playing music and games, and viewing photos; Apple Watch, a personal electronic device; and iPod touch, a flash memory-based digital music and media player. Further, the company sells Apple-branded and third-party accessories, such as headphones, displays, storage devices, Beats products, and other connectivity and computing products and supplies. Additionally, it offers iCloud, a cloud service that stores music, photos, contacts, calendars, mail, documents, and others; AppleCare, which offers support options for its customers; and Apple Pay, a cashless payment service. The company sells and delivers digital content and applications through the iTunes Store, App Store, Mac App Store, TV App Store, iBooks Store, and Apple Music. It also sells its products through its retail and online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers. Apple Inc. was founded in 1977 and is headquartered in Cupertino, California.

Source: FinViz.com, January 2018

Slide7

Apple Inc. (AAPL)

Source: The Street. January 2018

POSITIVES:

Chances are that Apple's December quarter numbers will be solid, given strong early demand for the iPhone X, reasonably good iPhone 8/8-Plus demand and the momentum seen as of late for various other businesses (iPads, Macs, Apple Watch, services). The December quarter is a seasonally huge one not only for the iPhone, but also the iPad and the Apple Watch. And this time around, demand is expected to get a boost from a couple of recent product launches. For the iPad, it's the September launch of iOS 11, which brought with it a number of multitasking features meant to strengthen the iPad Pro's appeal as a notebook alternative. For the Apple Watch, it's of course the launch of 4G-capable models in September -- reviewers have had mixed feelings about 4G performance and battery life, but generally like the third-gen Watch otherwise. On Jan. 17, Apple said it would pay $38 billion in taxes to repatriate offshore cash, thanks to the recent passage of a tax reform bill that allows offshore funds to be brought home at a 15.5% tax rate. This suggests Apple will be repatriating $245 billion, and keeping $207 billion net of tax payments.

Possible concerns:

The analyst consensus for March quarter sales has already dropped by $3.2 billion since Jan. 10, and (given all of the negative news flow) it's possible that the "whisper" number is lower still. At $65.71 billion, the current consensus still implies 26% sales growth relative to a depressed March 2017 quarter. But with Apple shares now down about 7% from their Jan. 18 high even as the Nasdaq has surged towards 7,500, some of this is now priced in. As a result, if Apple can avoid confirming worst-case iPhone X fears while showing healthy growth in other areas, the market's reaction to a less-than-stellar report might not be that bad.

Slide8

Amazon.com Inc. (AMZN)

Source: FinViz.com, September 2017

Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions in North America and internationally. It operates through the North America, International, and Amazon Web Services (AWS) segments. The company sells merchandise and content purchased for resale from vendors, as well as those offered by third-party sellers through retail Websites, such as amazon.com, amazon.ca, amazon.com.mx, amazon.com.au, amazon.com.br, amazon.cn, amazon.fr, amazon.de, amazon.in, amazon.it, amazon.co.jp, amazon.nl, amazon.es, and amazon.co.uk. It also manufactures and sells electronic devices, including kindle e-readers, fire tablets, fire TVs, and echo; and provides Kindle Direct Publishing, an online service that allows independent authors and publishers to make their books available in the Kindle Store. In addition, the company offers programs that enable sellers to sell their products on its Websites, as well as their own branded Websites; and programs that allow authors, musicians, filmmakers, app developers, and others to publish and sell content. Further, it provides compute, storage, database, and other AWS services, as well as fulfillment, publishing, digital content subscriptions, advertising, and co-branded credit card agreements services. Additionally, the company offers Amazon Prime, an annual membership program, which provides free shipping of various items; access to unlimited streaming of movies and TV episodes; and other services. Amazon.com, Inc. also generates electricity through its wind farms and solar projects. It serves consumers, sellers, developers, enterprises, and content creators. The company was founded in 1994 and is headquartered in Seattle, Washington.

Slide9

Amazon.com Inc. (AMZN)

Source: Morningstar, September 2017

POSITIVES:

Amazon dominates North American online retail with an estimated GMV of approximately $180 billion in 2016. With more than half of the world's Internet users coming from developing markets, Amazon has sizable international growth opportunities, including Europe, Japan, and India. Kindle products and complementary devices like Fire TV, Dash, Echo, and Alexa represent intriguing customer acquisition and retention tools that capitalize on the shift to digital media while simultaneously promoting Prime memberships and AWS' various capabilities. Amazon is the most disruptive force to emerge in ecommerce in several decades, and with its $13.7 billion acquisition of Whole Foods it is poised to further upend traditional brick-and-mortar retail stores. Amazon owns one of the wider economic moats in the consumer sector and is likely to reshape retail, digital media, and enterprise software for years to come.

Possible concerns:

Amazon's margin expansion trajectory is likely to be uneven at times, given its global logistics and content investments, new sources of competition, and physical store aspirations. International expansion brings unique challenges such as local e-commerce regulations, infrastructure investments, and incumbent competition in some markets. Certain Amazon Web Services products will face competition from well-capitalized peers like Microsoft and Google, potentially exposing it to more aggressive price competition and longer-term margin pressures.

Slide10

Activision Blizzard, Inc. (ATVI)

Source: FinViz.com, January 2018

Activision Blizzard, Inc. develops and publishes games for video game consoles, personal computers (PC), mobile devices, and online social platforms. The company operates through three segments: Activision Publishing, Inc., Blizzard Entertainment, Inc., and King Digital Entertainment. The company develops, publishes, and sells interactive software products and entertainment content through retail channels or digital downloads; and downloadable content. It also publishes subscription-based massive multiplayer online role-playing games; and strategy and role-playing games. In addition, the company maintains a proprietary online gaming service, Battle.net that facilitates the creation of user generated content, digital distribution, and online social connectivity in its games. Further, it engages in creating original film and television content; and provides warehousing, logistics, and sales distribution services to third-party publishers of interactive entertainment software, as well as manufacturers of interactive entertainment hardware products. The company serves retailers and distributors, including mass-market retailers, consumer electronics stores, discount warehouses, game specialty stores, and consumers through third-party distribution and licensing arrangements in the United States, Australia, Brazil, Canada, China, France, Germany, Ireland, Italy, Japan, Malta, Mexico, the Netherlands, Romania, Singapore, South Korea, Spain, Sweden, Taiwan, and the United Kingdom. Activision Blizzard, Inc. was incorporated in 1979 and is headquartered in Santa Monica, California.

Slide11

Activision Blizzard, Inc. (ATVI)

Sources: The Motley Fool, February 2018

Morningstar, February 2018

POSITIVES:

Not only did Activision Blizzard see its price rise more than 20%, on its way to a 2017 gain of 75%, but there's also plenty of growth left. Activision is a wildly successful standalone interactive entertainment company, with franchises including Call of Duty, Destiny, World of Warcraft, and Overwatch, among many others. And there are two driving forces behind Activision that could propel it to new heights in the years ahead: e-sports and microtransactions. The driving force that could really turn Activision into a wealth-creating machine for investors will professional competitive gaming. Overwatch has been a huge success in the e-sports megatrend, and Activision owns four games in the top 10 of Twitch's most watched e-sports, according to Morningstar.com. Investors are just beginning to understand the potential of e-sports, which drives incredible engagement and competitive activity for franchise games. It also opens the door for Activision to delve into consumer products, from team jerseys to customized gaming equipment. Activision was an excellent investment in 2017 and has proved it can make engaging and brilliant games. If it can figure out how to optimally monetize microtransactions and increase its exposure to the e-sports trend, there's no way this stock is slowing down.

Possible concerns:

Microtransactions have been under the microscope thanks to Electronic Arts' Star Wars Battlefront II. EA took a beating over in-game purchases to unlock, or at least unlock more quickly, popular characters. Other games have had similar but less publicized issues, but despite the backlash, microtransactions are likely to be a major part of gaming in the future. Activision will just have to find a way to balance how to monetize them in a way that doesn't upset the gaming community. When it finds that equilibrium, the additional revenue generated will help boost its top and bottom line.

Slide12

Alibaba Group Holding Limited (BABA)

Source: FinViz.com, January 2018

Alibaba Group Holding Limited, through its subsidiaries, operates as an online and mobile commerce company in the People's Republic of China and internationally. The company operates in four segments: Core Commerce, Cloud Computing, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao Marketplace, a mobile commerce destination;

Tmall

, a third-party platform for brands and retailers; Rural Taobao program that enables rural residents and businesses to sell agricultural products to urban consumers; Juhuasuan, a sales and marketing platform for flash sales; Alibaba.com, an online wholesale marketplace;

Alitrip

, an online travel booking platform; 1688.com, an online wholesale marketplace; and AliExpress, a consumer marketplace. The company also provides pay-for-performance and display marketing services through its

Alimama marketing technology platform; and Taobao Ad Network and Exchange, a real-time bidding online marketing exchange in China. In addition, it offers cloud computing services, including elastic computing, database, storage and content delivery network, large scale computing, security, and management and application services, as well as big data analytics and a machine learning platform through its Alibaba Cloud Computing platform; Web hosting and domain name registration services; and payment and escrow services, as well as develops and operates mobile Web browsers. The company provides its solutions primarily for businesses. Alibaba Group Holding Limited has strategic collaborations with Driscoll's and Thai Union/Chicken of the Sea to launch their food products to China. The company was founded in 1999 and is based in Hangzhou, the People's Republic of China.

Slide13

Alibaba Group Holding Limited (BABA)

Source: Thomson Reuters, February 2018

POSITIVES:

Alibaba is the China's biggest e-commerce company. Revenue for the October-December period rose to 83.03 billion yuan ($13.19 billion), up from 53.2 billion yuan a year earlier. That exceeded the 79.8 billion yuan average estimate of 28 analysts polled by Thomson Reuters. Alibaba is looking for new areas such as cloud computing, payments and offline retail to maintain rapid growth rates that helped propel its shares to roughly double in value last year, making it one of the world's most valuable companies with a market capitalization of $523 billion. The firm's third-quarter sales are typically strong because of its Singles' Day sales event held on Nov. 11, the world's biggest shopping spree. This year a record $25.4 billion was spent on Alibaba platforms on the day. Cloud computing and offline retail make up a comparatively small fraction of the company's current sales, though Alibaba is betting on these units to become major revenue drivers as the Chinese e-commerce market shows signs of saturation.

Possible concerns:

Alibaba, and other tech rivals in China such as Tencent Holdings Ltd <0700.HK> and JD.com Inc (JD.O), have also been investing heavily in brick-and-mortar retailers over the last year to extend their shopper base offline.

Slide14

Bank of America Corporation (BAC)

Source: FinViz.com, January 2018

Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates through four segments: Consumer Banking, Global Wealth & Investment Management, Global Banking, and Global Markets. The Consumer Banking segment offers traditional and money market savings accounts, CDs and IRAs, noninterest- and interest-bearing checking accounts, and investment accounts and products, as well as credit and debit cards, residential mortgages and home equity loans, and direct and indirect loans. This segment provides its products and services through approximately 4,600 financial centers, 15,900 ATMs, call centers, and online and mobile platforms. The Global Wealth & Investment Management segment offers investment management, brokerage, banking, and retirement products, as well as wealth management and customized solutions. The Global Banking segment provides lending products and services, including commercial loans, leases, commitment facilities, trade finance, real estate lending, and asset-based lending; treasury solutions, such as treasury management, foreign exchange, and short-term investing options; working capital management solutions; and debt and equity underwriting and distribution, and merger-related and other advisory services. The Global Markets segment offers market-making, financing, securities clearing, settlement, and custody services, as well as risk management, foreign exchange, fixed-income, and mortgage-related products. Bank of America Corporation was founded in 1874 and is based in Charlotte, North Carolina.

Slide15

Bank of America Corporation (BAC)

Source: Motley Fool, February 2018

Seeking Alpha, September 2017

POSITIVES

: Bank of America has improved dramatically since the financial crisis. The company has been the most remarkable turnaround story of the big banks. The bank continues to improve, even eight years post-crisis. The bank's profitability -- return on equity and return on assets -- continues to climb and is getting close to the key 10% and 1% industry benchmarks. Thanks to investment in technology and reduction in its branch count, the bank's efficiency continues to get better, and now rivals even the most solid big U.S. banks. And it's worth mentioning that Warren Buffett's Berkshire Hathaway recently became the bank's biggest investor. Despite all of the improvement, there's reason to believe that Bank of America's best days are ahead. The bank generally operates at an effective tax rate of around 30%, and this should drop significantly going forward. Additionally, with a massive base of low-cost deposits, the bank stands to benefit from margin expansion as the Federal Reserve raises interest rates.

Possible concerns:

Due to BAC’s heavy reliance on the U.S. retail banking and wealth management, the bank is vulnerable to domestic economic weakness. This contrasts to its other money center peers that have international operations, potentially insulating them from U.S. weakness. Although the U.S. economy is projected to remain strong in coming years, it is still something to be aware of.

Slide16

Citigroup Inc. (C)

Citigroup Inc., a diversified financial services holding company, provides various financial products and services for consumers, corporations, governments, and institutions worldwide. The company operates through two segments, Citicorp and Citi Holdings. The Citicorp segment offers traditional banking services to retail customers through retail banking, commercial banking, Citi-branded cards, and Citi retail services. It also provides various banking, credit card lending, and investment services through a network of local branches, offices, and electronic delivery systems. In addition, this segment provides wholesale banking products and services, including fixed income and equity sales and trading, foreign exchange, prime brokerage, derivative services, equity and fixed income research, corporate lending, investment banking and advisory services, private banking, cash management, trade finance, and securities services to corporate, institutional, public sector, and high-net-worth clients. As of December 31, 2016, it operated 2,649 branches in 19 countries. The Citi Holdings segment provides consumer loans; and portfolio of securities, loans, and other assets. Citigroup Inc. was founded in 1812 and is based in New York, New York.

Source: FinViz.com, January 2018

Slide17

Citigroup Inc. (C)

Source:

Zacks

, January 2018

InvestorPlace

, January 2018

POSITIVES:

Citigroup has seen solid earnings estimate revision activity over the past month, suggesting analysts are becoming a bit more bullish on the firm’s prospects in both the short and long term. Revenue grew just 1.5% last quarter, but both sales and earnings beat expectations. For 2017, Citigroup now has earnings of $5.33 per share. Analysts expect that figure to swell roughly 20% to $6.37 this year and another 16% to $7.38 in 2019. Analysts are forecasting revenue growth of roughly 3.5% for both years. With a new lower tax rate, the bank’s bottom line should continue to swell. As the U.S. and global economies continue to strengthen, Citigroup’s core businesses will only gain strength. While some things can change in a hurry, the positive developments that are underway should continue in a positive direction. Possible concerns: With Citi's large emerging market presence though, it is important to be careful. If credit growth expands too rapidly in these regions, it could lead to an unsustainable bubble, ultimately leaving Citi in a vulnerable position. Moreover, Citi's investment bank continues to underperform expectations, and could be a drag on revenue going forward.

Slide18

Costco Wholesale Corporation (COST)

Costco Wholesale Corporation, together with its subsidiaries, operates membership warehouses. It offers branded and private-label products in a range of merchandise categories. The company provides dry and packaged foods, and groceries; snack foods, candies, alcoholic and nonalcoholic beverages, and cleaning supplies; appliances, electronics, health and beauty aids, hardware, and garden and patio products; meat, bakery, deli, and produces; and apparel and small appliances. It also operates gas stations, pharmacies, optical dispensing centers, food courts, and hearing-aid centers; and engages in the travel business. In addition, the company provides gold star individual and business membership services. As of September 3, 2017, it operated 741 membership warehouses, including 514 warehouses in the United States, Washington, District of Columbia, and Puerto Rico, 97 in Canada, 37 in Mexico, 28 in the United Kingdom, 26 in Japan, 13 in Korea, 13 in Taiwan, 9 in Australia, 2 in Spain, 1 in Iceland, and 1 in France. Further, the company sells its products through online. The company was formerly known as Costco Companies, Inc. Costco Wholesale Corporation was founded in 1976 and is based in Issaquah, Washington.

Source: FinViz.com, January 2018

Slide19

Source: Motley Fool, January 2018

POSITIVES:

Costco delivered a very strong December with same-store sales up 11.5% over last year including a 33.3% gain from e-commerce, an unbelievable number given there seemed to be a general belief that Costco was not keeping up with Amazon.com, Inc. The firm has taken the long-range approach to building its business. The warehouse club often reacts slowly to change, and while that may appear complacent, it's actually measured. Because the chain has a loyal user base that has steadily grown while renewing at a roughly 90% rate, it does not have to react quickly. The company's core customer base liked shopping in its warehouses. They enjoy not just the low prices, but also the ever-changing merchandise, the free samples, the cheap food, and many other things about the company's brick-and-mortar stores. That affinity for the experience offered in Costco warehouses has protected the company from the Retail Apocalypse. It also gave the company time to implement both a digital and a delivery strategy. After pretty much ignoring the internet, the chain began improving its website last year. That included increasing selection, but it most importantly involved the company investing heavily in infrastructure. Costco did not simply throw a bunch of merchandise online; it improved the back end of its digital operation while also making its website more user-friendly and spending heavily on improving its shipping logistics. That investment paid off strongly as the company reported a 43.5% gain in comparable e-commerce sales in Q1 2018. It then followed that up by reporting that December e-commerce sales, the first month of Q2 2018, rose by 33.3%. That's strong evidence that waiting did not hurt the company when it came to offering its customer base a strong digital product.

Possible concerns:

Every time another retailer makes a big move, it seems like a number of retail analysts predict that whatever has happened will doom Costco. The reality is that the warehouse club has remained largely apart from the fate of others retailers. Its success won't hinge on what Amazon does with Whole Foods, or whether Wal-Mart keeps lowering prices. Costco doesn't respond like most retailers because it has a different business model. There are no signs that model has any weakness, and while growth will be slow (with 20 to 25 new warehouses planned in 2018), it should stay steady.

Costco Wholesale Corporation (COST)

Slide20

Diageo plc (ADR)- (DEO)

Diageo plc, together with its subsidiaries, produces, markets, and sells alcoholic beverages worldwide. The company offers a collection of brands across spirits, beer, cider, and wine categories. Its brands include Johnnie Walker, Crown Royal, J&B, Buchanan's and Windsor whiskies, Smirnoff, C??roc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray, and Guinness. The company also provides adult beverages and non-alcoholic products. Diageo plc was founded in 1886 and is headquartered in London, the United Kingdom.

Source: FinViz.com, January 2018

Slide21

Source: Motley Fool, January 2018

POSITIVES: Diageo is one of the world's largest distillers, and it derives the lion's share of its revenue from its Scotch portfolio, which represents a quarter of Diageo's $15.9 billion in annual sales. Johnnie Walker is its premier brand, but the distiller also owns Buchanan's, which is the second most popular Scotch in the U.S.; Black & White, Diageo's top seller in Brazil; and J&B, the No. 1 Scotch in Spain. It also owns Windsor, Old Parr, and Lagavulin, each of which holds a leading position in various markets around the world. Sales driven by increased spending on marketing helped Diageo, the world's largest spirits company, to report better-than-expected first-half results. But the British-based maker of Johnnie Walker Scotch and Smirnoff vodka said foreign exchange rates would take a bigger-than-expected gulp out of sales and profits in the full year, due to a strengthening sterling and weak U.S. dollar. Diageo said organic net sales grew 4.2 percent in the six months ended in December, above what analysts said was a 3.7 percent consensus. Earnings per share before one-off items was 67.8 pence, 3.5 percent ahead of expectations, according to Liberum analysts. Like many global packaged goods companies, Diageo has adopted a plan of cost-cutting that has helped make its business more efficient, providing funds to use for generating sales.Possible concerns: Although the beverage sector is not particularly prone to disruption or rapid change, one possible source of disruption is startup brands. With the advent of micro-breweries, plus social media and other forms of viral marketing, new drinks can quickly scale up into significant businesses.

Diageo plc (ADR)- (DEO)

Slide22

DowDuPont Inc. (DWDP)

DowDuPont Inc is jointly owned by Dow and DuPont for the purpose of effecting the mergers. The company segmented its operating activities into three reportable business units: Agriculture, Specialty Products, and Material Science.

Source: FinViz.com, January 2018

Slide23

Sources: Reuters, January 2018

POSITIVES: Dow and DuPont .S. chemicals producer DowDuPont reported a 14 percent rise in net sales for the fourth quarter and beat Wall Street profit estimates as a strong global economy led to robust demand and higher prices for its products. The newly-combined company, formed by the merger of chemical giants Dow Chemical and DuPont four months ago, said its net sales came in at $20.1 billion versus comparable net sales - which the company terms "proforma" sales - of $17.7 billion a year earlier. It also said it planned to move ahead with plans to split the new company into three separate parts, starting with the Materials Science unit by the end of the first quarter of 2019. Agriculture and Specialty Products are expected to follow by June 1, 2019.Currently trading at a market value of about $176.9 billion, Dow and DuPont completed the $130 billion mega merger in September. That created the world's largest chemical maker, until the company goes through with a plan to split into three companies. DowDuPont's merger was welcomed by investors as a way to streamline the companies' sprawling operations by combining overlapping businesses.Possible concerns: Merger continues.

DowDuPont

Inc. (DWDP)

Slide24

Diamondback Energy Inc. (FANG)

Diamondback Energy, Inc., an independent oil and natural gas company, focuses on the acquisition, development, exploration, and exploitation of onshore oil and natural gas reserves in the Permian Basin in West Texas. Its activities are primarily focused on the Wolfcamp, Spraberry, Clearfork, Bone Spring, and Cline formations. As of December 31, 2017, the company's net acreage position was approximately 206,660 acres in the Permian Basin; and estimated proved oil and natural gas reserves were 335,352 thousand barrels of crude oil equivalent. It also held working interests in 1,166 gross producing wells, as well as royalty interests in 64 additional wells. In addition, the company, through its subsidiary, Viper Energy Partners LP, owns mineral interests in approximately 247,602 gross acres primarily in Midland County, Texas. Diamondback Energy, Inc. was founded in 2007 and is headquartered in Midland, Texas.

Source: FinViz.com, April 2018

Slide25

Diamondback Energy Inc. (FANG)

Source: Zacks Equity Research, January 2018

POSITIVES: Diamondback is a Permian pure-play company with around 207,000 net acres including 188,000 net acres in the Midland and Delaware Basins. This is a substantial amount of high-quality acreage in an areas that have thrived despite the downturn in oil prices during the last few years. This should allow Diamondback to run up to 20 rigs, up from 10 rigs currently. Potential for 30+% production growth from Q4 2017 to Q4 2018 while spending within cash flow at current strip. Diamondback also has a very low cost structure. Additionally, Diamondback has quite low interest costs per BOE and its cash G&A costs per BOE are among the lowest in the industry.FANG recently declared that its first-quarter 2018 output level climbed up to 102.6 thousand barrels of oil equivalent per day (MBoe/d), showing a rise of 10% from the fourth-quarter 2017's figure of 92.9 MBoe/d. Of the total production, 74% or 75.6 thousand barrels per day was oil. Notably, the company's subsidiary, Viper Energy Partners LP VNOM has also announced its Jan-Mar production volumes at 14.1 MBoe/d, reflecting a rise of 14% from the last reported quarter.Possible concerns: Diamondback may reach Q4 2018 production of over 120,000 BOEPD with its proposed drilling program. To maintain this level of production beyond 2018, Diamondback may need a capital expenditure budget of around $1 billion to $1.15 billion. This would result in Diamondback's unhedged oil breakeven point being estimated at around $45 WTI oil, including its current dividend payout. This also is based on 2018 service cost estimates. If oil prices fell to the mid-$40s again, service costs would likely go down a bit, dropping Diamondback's breakeven point to the low $40s for WTI oil.

Slide26

Facebook, Inc. (FB)

Source: FinViz.com, July 2018

Facebook, Inc. provides various products to connect and share through mobile devices, personal computers, and other surfaces worldwide. Its solutions include Facebook Website and mobile application that enables people to connect, share, discover, and communicate each other on mobile devices and personal computers; Instagram, a mobile application that enables people to take photos or videos, customize them with filter effects, and share them with friends and followers in a photo feed or send them directly to friends; Messenger, a messaging application to communicate with people and businesses across platforms and devices; and WhatsApp Messenger, a mobile messaging application. The company also offers Oculus virtual reality technology and content platform, which allow people to enter an immersive and interactive environment to play games, consume content, and connect with others. As of December 31, 2016, it had approximately 1.23 billion daily active users. Facebook, Inc. was founded in 2004 and is headquartered in Menlo Park, California.

Slide27

Facebook, Inc. (FB)

Source: Motley Fool, July 2018

MarketWatch, July 2018

POSITIVES: Facebook's secret weapon is scale and information. This platform still attracts 2.23 billion monthly active users and 1.47 billion daily active users. Folks go to Facebook because it's where the family, friends, and co-workers are. This is the networking effect at its extreme setting. Some may argue that younger users are flocking to Instagram as their visual-centric social platform of choice or leaning on WhatsApp for bare-bones communications, but Facebook owns those sites, too. Additionally, Facebook has years of data, a selling point that also applies to Netflix. No one knows usage trends better than Netflix when it comes to video and Facebook when we're talking about nearly everything else. Having this kind of information can backfire, as it did last year when Facebook got caught in the cookie jar. However, information is gold that can be monetized -- and companies like Facebook are doing exactly that. In the near term, no amount of fundamental or quantitative analysis is going to matter. Facebook’s stock is going to trade on sentiment. As of this writing, the sentiment on the stock is bullish. The sentiment is especially bullish among the momo (momentum) crowd that has been buying this stock hand over fist. The momo crowd is seeing this dip as a gift to buy the stock at a lower price. Moreover, Very long-term fundamentals just got better than before the dip in the stock. The moves that Facebook is making are likely to successful head off regulatory challenges. This is increasing costs in the short term and hitting the stock, but is very bullish for the long term. As Facebook makes new investments, it will become even more attractive to advertisers than it is today.Some of the moves Facebook is making now will ultimately increase the profitability of Instagram, WhatsApp and Messenger. There is a long runway ahead to monetize those assets. In the very long term, Facebook stock could go to over $300.Possible concerns: The stock got rocked last week after posting disappointing financial results. Investors are freaking out that European active users are declining. Flat daily active users closer to home also didn't help. Even with new, lower revenue growth expectations, Facebook FB, -3.60% is still one of only 11 companies in the S&P 500 that have notched year-over-year revenue growth of 20% or more in the last eight quarters.

Slide28

FedEx Corporation (FDX)

FedEx Corporation provides transportation, e-commerce, and business services worldwide. The company's FedEx Express segment provides various shipping services for the delivery of packages and freight; international trade services specializing in customs brokerage, and ocean and air freight forwarding services; assistance with the customs-trade partnership against terrorism program; and customs clearance services, as well as an information tool that allows customers to track and manage imports. This segment also publishes customs duty and tax information; and offers transportation management and temperature-controlled transportation services. Its TNT Express segment provides international express transportation, small-package ground delivery, and freight transportation services; and business-to-consumer services. The company's FedEx Ground segment provides business and residential money-back guaranteed ground package delivery services; and consolidates and delivers low-weight and less time-sensitive business-to-consumer packages, as well as offers integrated supply chain management solutions. Its FedEx Freight segment offers less-than-truckload freight and freight-shipping services. As of May 31, 2017, this segment operated approximately 66,000 vehicles and trailers from a network of approximately 370 service centers. The company's FedEx Services segment provides sale, marketing, information technology, communication, customer, technical support, billing and collection, and other back-office support services; FedEx Mobile, a suite of solutions to track packages, create shipping labels, view account-specific rate quotes, and access drop-off location information; copying and digital printing, professional finishing, document creation, direct mail, signs and graphics, computer rentals, and ground shipping and time-definite shipping services; and packing services, supplies, and boxes. FedEx Corporation was founded in 1971 and is headquartered in Memphis, Tennessee.

Source: FinViz.com, January 2018

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FedEx Corporation (FDX)

Source: Zacks, January 2018

POSITIVES: FedEx is bouncing back strongly after a concerning down period. The company beat our consensus earnings estimate by more than 10% in the most recent quarter, and shares have soared more than 20% within the past 12 weeks. That surge has lifted FedEx to these 52-week high levels, but the stock should break higher soon on the back of its improved earnings outlook. Our consensus estimates are soaring thanks to a tidal wave of positive revisions, so investors should be able to capitalize soon.Possible concerns: The late June ransomware attack disrupted TNT Express' operations for weeks. Not surprisingly, many TNT Express customers were extremely frustrated by the fallout from the cyberattack, which caused huge delays and made it impossible to track shipments. In some cases, this caused longtime customers to consider taking their future business elsewhere. As a result, TNT Express shipment volumes still haven't recovered to pre-crisis levels.

Slide30

General Dynamics Corporation (GD)

General Dynamics Corporation operates as an aerospace and defense company worldwide. It operates through four business groups: Aerospace; Combat Systems; Information Systems and Technology; and Marine Systems. The Aerospace group designs, develops, manufactures, and outfits business-jet aircraft; provides aircraft services, such as maintenance, repair, aircraft management, charter, fixed-base operational, and staffing services; and performs aircraft completion services for other original equipment manufacturers. The Combat Systems group is involved in the design, development, production, modernization, and sustainment of combat vehicles, weapons systems, and munitions. This group offers wheeled combat and tactical vehicles; main battle tanks and tracked combat vehicles; armaments; and maintenance and logistics support and sustainment services. The Information Systems and Technology group provides technologies, products, and services that support a range of military, federal/civilian, state, local, and commercial customers. This group offers information technology solutions and mission support services; communication, command-and-control, and computer mission systems; and imagery, signals, and multi-intelligence systems for customers in the defense sector, intelligence and homeland security communities, and the United States allies. The Marine Systems group designs, constructs, and repairs surface ships and submarines for the United States Navy and Jones Act ships for commercial customers. This group offers nuclear-powered surface combatants, auxiliary and combat-logistics ships, and commercial product carriers and containerships; and provides design and engineering support services, as well as maintenance, modernization, and lifecycle support services. General Dynamics Corporation was founded in 1899 and is based in Falls Church, Virginia.

Source: FinViz.com, January 2018

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General Dynamics Corporation (GD)

Source: Zacks Equity Research, September 2017

POSITIVES: General Dynamics enjoys a dominant position as a Navy contractor. This is because it is one of the only two contractors in the world equipped to build nuclear-powered submarines. The company is a prime contractor for the development of Virginia-class submarines (another class of nuclear-powered submarine). General Dynamics enjoys a dominant position as a Navy contractor. This is because it is one of the only two contractors in the world equipped to build nuclear-powered submarines. The company is a prime contractor for the development of Virginia-class submarines (another class of nuclear-powered submarine). The growing cross-border tension due to North Korea’s continuous nuclear tests, along with radical terrorism has boosted the defense sector in the recent times. Recently, the U.S. Senate Armed Services Committee approved fiscal 2018 defense policy bill. The National Defense Authorization Act for fiscal 2018, worth $700 billion, includes $25 billion to boost Navy shipbuilding. Notably, the bill is expected to boost revenue growth for General Dynamics, which is one of the prime shipbuilders in the United States. The conflict with North Korea is likely to be an ongoing concern. General Dynamics is likely to thrive in this fear environment.Possible concerns: If the current situation with North Korea cools off, the demand for defense products could be reduced. However, it is possible that North Korea would be hurt by sanctions over time and stop testing missiles as a result. If this happened, the U.S. might consider reducing the defense budget.

Slide32

Google Inc. (GOOGL)

Alphabet Inc., through its subsidiaries, provides online advertising services in the United States, the United Kingdom, and rest of the world. The company offers performance and brand advertising services. It operates through Google and Other Bets segments. The Google segment includes principal Internet products, such as Search, Ads, Commerce, Maps, YouTube, Google Cloud, Android, Chrome, and Google Play, as well as technical infrastructure and newer efforts, including Virtual Reality. This segment also sells digital contents, apps and cloud offerings, and hardware products. The Other Bets segment includes businesses, such as Access, Calico,

CapitalG, GV, Nest, Verily, Waymo, X, and Google Fiber. Alphabet Inc. was founded in 1998 and is headquartered in Mountain View, California.

Source: FinViz.com January 2018

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Google Inc. (GOOGL)

Source: The Street, January 2018

POSITIVES: Google's paid clicks, defined as revenue-producing ad clicks and views, rose 47% annually in Q3, with 55% growth registered on Google's sites and apps. Mobile search -- boosted by Google Shopping ads and larger text ads -- and YouTube have been the main growth drivers. Thanks to those growth drivers, as well as Google's continued ad targeting improvements and the popularity of Google Shopping ads among online retailers during the holiday season, strong paid click growth is also expected in Q4. The “Google Other” reporting segment covers sales of Google-branded hardware, Google Play transaction cuts, cloud app and service revenue, YouTube's subscription services and any other non-advertising Google revenue stream. Its revenue rose 40% in Q3 to $4.3 billion; the consensus for Q4 is for revenue to rise 35% to $4.6 billion.It wouldn't be shocking to see Google meaningfully top that consensus. Though not a blockbuster, it looks like the Pixel 2 XL (launched in October) had a solid debut, and Google also sold quite a few Home Mini speakers during the quarter. And revenue for both Google Play and the Google Cloud Platform (GCP) have been growing at healthy clips.Possible concerns: Google has talked about being more disciplined with its investments in the Other Bets segments, which covers Waymo, Google Fiber, Nest and a slew of other businesses, the segment continues bleeding red ink. In Q3, it had an operating loss of $812 million (improved just slightly from Q3 2016's $861 million) on $302 million in revenue (up 53%).

Slide34

Goldman Sachs Group Inc. (GS)

The Goldman Sachs Group, Inc. operates as an investment banking, securities, and investment management company worldwide. It operates through four segments: Investment Banking, Institutional Client Services, Investing & Lending, and Investment Management. The Investment Banking segment provides financial advisory services, including strategic advisory assignments related to mergers and acquisitions, divestitures, corporate defense activities, restructurings, spin-offs, and risk management; and underwriting services, such as debt and equity underwriting of public offerings and private placements of various securities and other financial instruments, as well as derivative transactions with public and private sector clients. The Institutional Client Services segment is involved in client execution activities related to making markets in cash and derivative instruments for interest rate products, credit products, mortgages, currencies, commodities, and equities; and provision of securities services comprising financing, securities lending, and other prime brokerage services, as well as markets in and clears client transactions on primary stock, options, and futures exchanges. The Investing & Lending segment invests in and originates longer-term loans to provide financing to clients; and makes investments in debt securities and loans, public and private equity securities, and infrastructure and real estate entities, as well as provides unsecured loans to individuals through its online platform. The Investment Management segment offers investment management products and services; and wealth advisory services consisting of portfolio management and financial counseling, and brokerage and other transaction services. The company serves corporations, financial institutions, governments, and individuals. The Goldman Sachs Group, Inc. was founded in 1869 and is headquartered in New York, New York.

Source: FinViz.com, January 2018

Slide35

Goldman Sachs Group Inc. (GS)

Source: Motley Fook, January 2018

POSITIVES: Goldman's earnings and revenue for 2017 beat expectations, and its investment-banking business is doing well. In fact, Goldman has the top market share in announced and completed mergers and acquisitions (M&A), and in equity and common stock offerings. For the year, Goldman's investment-banking revenue grew by an impressive 44%. While it's not a major part of Goldman's business just yet, the young Marcus consumer-banking platform could evolve into a major revenue source. After just over a year, the platform had originated more than $2 billion in loans with its simplified, consumer-focused process, and also took in more than $5 billion in deposits, thanks to offering some of the industry's highest rates on savings accounts.Possible concerns: Trading revenue generally suffers in low-volatility environments, and the current environment is about as low volatility as it gets. If volatility picks up and Goldman's trading revenue jumps, the bank's current share price may seem very cheap.

Slide36

The Home Depot, Inc. (HD)

The Home Depot, Inc. operates as a home improvement retailer. It operates The Home Depot stores that sell various building materials, home improvement products, and lawn and garden products, as well as provide installation, home maintenance, and professional service programs to do-it-yourself, do-it-for-me (DIFM), and professional customers. The company offers installation programs that include flooring, cabinets, countertops, water heaters, and sheds; and professional installation in various categories sold through its in-home sales programs, such as roofing, siding, windows, cabinet refacing, furnaces, and central air systems, as well as acts as a contractor to provide installation services to its DIFM customers through third-party installers. It primarily serves home owners; and professional renovators/remodelers, general contractors, handymen, property managers, building service contractors, and specialty tradesmen, such as installers. The company also sells its products through online. It operates through approximately 2,278 stores, including 1,977 in the United States, including the Commonwealth of Puerto Rico, and the territories of the U.S. Virgin Islands and Guam; 182 in Canada; and 119 in Mexico. The Home Depot, Inc. was founded in 1978 and is based in Atlanta, Georgia.

Source: FinViz.com, January 2018

Slide37

The Home Depot, Inc. (HD)

Source: Seeking Alpha, September 2017

POSITIVES:

Home Depot remains an attractive holding, even as it continues to hit fresh record highs. The home improvement retailer is in the midst of a structurally attractive economy for home buying, which should continue to drive fundamental performance. In addition, the company's valuation multiple is attractively priced relative to historical readings. Moreover, management is committed to its capital allocation plan, returning a healthy amount of cash flow to shareholders. With the number of tailwinds currently behind Home Depot, it is likely its stock price continues higher over coming years after breaking out to new highs this week. Within the home retail sector, Home Depot has shown to be the top player, growing both revenue and margins. In its most recent quarter, Home Depot saw comparable-store sales accelerate to 6.3% pace, up from 5.5% in the prior quarter. Management now states that Home Depot is on track to expand comps by 5.5% in 2017, ensuring another year of market share gains against rival Lowe's, which is expected to expand its comps by less than 4% over the next year. Moreover, Home Depot's operating margin is rising towards 15% of sales, a record high, compared to Lowe's, who recently reduced its profitability outlook and is closer to a 10% margin. Home Depot's management projects it should pass the $100 billion of annual sales mark in fiscal 2018, while also exceeding 15% operating margins. Home Depot is worth owning on its fundamentals before the tragic storms of the last month. Their earnings growth, financial stability,and healthy dividend would be attractive to most investors. That financial strength is likely to get an immediate and longer-term boost as a result of these tragic storms, and the rebuilding that will follow.Possible concerns: Over 25% of US stores are in states and provinces affected by hurricanes Harvey, Irma, and Maria. And when this turn is made, the company best positioned to provide the needed tools and supplies is Home Depot. Dow component Home Depot is the largest big box home improvement store in the United States. Due to this situation, there are no strong immediate concerns for the firm at the moment.

Slide38

Intuitive Surgical, Inc. (ISRG)

Intuitive Surgical, Inc. designs, manufactures, and markets da Vinci surgical systems, and related instruments and accessories. The company's da Vinci surgical System translates a surgeon's natural hand movements, which are performed on instrument controls at a console into corresponding micro-movements of instruments positioned inside the patient through small incisions or ports. Its da Vinci surgical system include surgeon's consoles, patient-side carts, 3-D vision systems, da Vinci skills simulators, da Vinci Xi integrated table motions, and Firefly fluorescence imaging products that enable surgeons to perform various surgical procedures, including gynecologic, urologic, general, cardiothoracic, and head and neck surgical procedures. The company also manufactures EndoWrist instruments that include forceps, scissors, electrocautery, scalpels, and other surgical tools, which incorporate wrist joints for natural dexterity for various surgical procedures. In addition, it offers da Vinci Single-Site instruments and accessories that allow surgical systems to work through a single incision; and EndoWrist One vessel sealers that are wristed single-use instruments intended for bipolar coagulation and mechanical transection of vessels up to 7 mm in diameter and tissue bundles that fit in the jaws of the instrument. Further, the company provides EndoWrist stapler, a wristed stapling instrument intended for resection, transection, and/or creation of anastomoses, as well as sells various accessories, including replacement 3-D stereo endoscopes, camera heads, light guides, and other items that facilitate use of the da Vinci system, as well as sterile drapes for ensuring a sterile field during surgery. Intuitive Surgical, Inc. markets its products directly and through distributors in the United States, Europe, Asia, and internationally. The company was founded in 1995 and is headquartered in Sunnyvale, California.

Source: FinViz.com, July 2018

Slide39

Intuitive Surgical, Inc. (ISRG)

Source: Moley Fool, July 2018

POSITIVES: ISRG is a designer of da Vinci surgical systems, and related instruments. It has a Momentum Score of A and an average four-quarter positive earnings surprise of 21.6%. Full or partial removal of the prostate is the top urology procedure in the U.S. and the top overall procedure performed using da Vinci outside of the U.S. The average age of men diagnosed with prostate cancer is 66, according to the American Cancer Society. The aging of the baby boomers in the U.S. and across the world should increase the number of prostatectomies performed using da Vinci. However, Intuitive Surgical reported more gynecology procedures last year than it did urology procedures. Hysterectomy was by far the most common gynecology procedure performed with da Vinci. The average age of women who have a hysterectomy is 42. And millions of millennial women will reach that age over the next decade. In Intuitive Surgical's blowout Q2 results announced recently, the company's management specifically pointed to colorectal procedures as a prime growth driver. Many of those procedures related to colorectal cancer. Although younger people can get colorectal cancer, the risk increases with age. The average age at the time of diagnosis of colon cancer is 68 for men and 72 for women, while the average for both sexes at the time of diagnosis of rectal cancer is 63. Baby boomers should push the number of colorectal procedures performed by da Vinci systems higher in the coming years. A whopping 71% of Intuitive Surgical's revenue comes from recurring sales of instruments, accessories, and services. The more procedures that are performed, the higher the company's recurring revenue. Long-term aging demographic trends are highly likely to make Intuitive Surgical increasingly profitable in the coming decade and beyond. Moreover, Intuitive Surgical enjoys a near-monopoly in robotic surgery right now. Possible concerns: Medtronic is behind schedule with launching its robotic surgical system that will rival da Vinci, but competition is coming. Transenterix could also go head-to-head with Intuitive Surgical in the future. Verb Surgical, a joint venture started by Alphabet and Johnson & Johnson, plans to roll out its own surgical robot in 2020.

Slide40

KeyCorp (KEY)

KeyCorp operates as the holding company for KeyBank National Association that provides various retail and commercial banking services in the United States. The company's Key Community Bank segment offers various deposit and investment products, personal finance services, residential mortgages, home equity loans, credit cards, and installment loans, as well as personal property and casualty insurance, such as home, auto, renters, watercraft, and umbrella insurance for individuals. It also purchases retail auto sales contracts through a network of auto dealership; offers financial, estate and retirement planning, asset management, and trust services, as well as portfolio management, life insurance, charitable giving, and related services for high-net-worth clients. In addition, this segment provides deposits, investment and credit products, and business advisory services to small businesses; and commercial lending, cash management, equipment leasing, investment, and commercial property and casualty insurance products, as well as employee benefit programs, succession planning, capital market access, derivatives, and foreign exchange services to mid-sized businesses. Its Key Corporate Bank segment offers a suite of banking and capital market products, such as syndicated finance, debt and equity capital market products, commercial payments, equipment finance, commercial mortgage banking, derivatives, foreign exchange, financial advisory, and public finance, as well as commercial mortgage loans for middle market clients comprising consumer, energy, healthcare, industrial, public, real estate, and technology sectors. As of December 31, 2017, the company offered its products and services through 1,197 retail banking branches and 1,572 automated teller machines in 15 states, as well as additional offices, online and mobile banking capabilities, and a telephone banking call center. KeyCorp was founded in 1849 and is headquartered in Cleveland, Ohio.

Source: FinViz.com, March 2018

Slide41

KeyCorp (KEY)

Source: Seeking Alpha, March 2018

POSITIVES:

The operating environment for the U.S. banks, especially the regional banks, has greatly improved over the last two-plus years. Specifically, rising interest rates and business-friendly regulatory changes have created an environment that should lead to improving fundamentals for the regional banks for many years to come. KeyCorp recently reported a ~7% YoY increase in net interest income, excluding purchase accounting accretion ("PAA") for Q4 2017. And more importantly, management mentioned during the Q4 2017 conference call that KeyCorp has the opportunity to greatly benefit from the additional interest rate hikes that are widely expected to occur over the next 12-18 months. The regulatory environment for the U.S. banks is becoming more favorable on what seems like an almost daily basis. In addition, the Senate recently passed a bill that would increase the asset level for the systemically important financial institution, or SIFI, designation from $50B to $250B. This bill would prevent KeyCorp from needing to comply with some of the burdensome rules/regulations that were put into place after the Financial Crisis. Simply put, KeyCorp is a well-managed bank that is properly positioned to benefit from several long-term catalysts: (1) Rising rates, (2) positive changes to the regulatory environment, and (3) cost/revenue synergies from the First Niagara assets.Possible concerns: The banking industry has promising prospects in 2018, but a significant downturn in the economy would negatively impact KeyCorp's business. Integration risk is another important factor that investors should consider for KeyCorp. Management has talked up the First Niagara acquisition so far, and analysts tend to agree with its assessment of the deal up until this point in time, but there is no guarantee that the acquired assets will be a strategic fit for KeyCorp through 2019 and beyond.

Slide42

Cheniere Energy, Inc. (LNG)

Cheniere Energy, Inc., an energy company, engages in the liquefied natural gas (LNG) related businesses in the United States. The company operates in two segments, LNG Terminal Business, and LNG and Natural Gas Marketing. It owns and operates Sabine Pass LNG terminal in Cameron Parish, Louisiana; and Corpus Christi LNG terminal near Corpus Christi, Texas. The company also owns Creole Trail pipeline, a 94-mile pipeline interconnecting the Sabine Pass LNG terminal with various interstate pipelines. In addition, it is involved in the LNG and natural gas marketing business. The company was founded in 1983 and is based in Houston, Texas.

Source: FinViz.com, July 2018

Slide43

Cheniere Energy, Inc. (LNG)

Source: Motley Fool, July 2018

POSITIVES: After a long period of construction, Cheniere Energy Partners started exporting LNG from its first liquefaction facilities, known as trains, in 2016. The financial impact was huge, almost like flipping a switch: Revenues went from $270 million in 2015 to $1.1 billion in 2016. Two more trains were completed in 2017, helping to increase revenues to $4.3 billion and pushing the partnership's bottom line into the black. With long-term contracts backing the LNG production and export at the Sabine Pass facility, 2017 is likely to be just the start of a long streak of profitable business. With a major portion of the project complete, the partnership increased that to $1.72 in 2017. This year the partnership is planning to up that to a run rate of between $2.20 and $2.30 per unit as it benefits from a full year of operation at the first three trains. But that's not the end of the story. Another LNG train was recently completed, which should push revenues higher still, with 2019 the first year that will see the full benefit of the new facility. And a fifth train is set to be completed in late 2019 or early 2020, providing another boost to revenues. As the next two trains start to produce revenue, Cheniere Energy Partners believes that distributable cash flow will increase to around $3 to $3.20 a unit.Possible concerns: Cheniere Energy is the general partner of Cheniere Energy Partners, so it has benefited along with its controlled partnership. But there's a very big difference between the two: Cheniere Energy is building an LNG facility in Corpus Christi, Texas. It has two trains currently under construction that are projected to be completed in 2019 and 2020, respectively, and there is a third train on the drawing board that has yet to be started. And there's additional room for expansion beyond that point. The story here is about the growth potential associated with the Corpus Christi facility. The Texas project, however, will be costly, and Cheniere Energy is going to be putting all of its cash toward construction.

Slide44

NVIDIA Corporation (NVDA)

NVIDIA Corporation operates as a visual computing company worldwide. It operates in two segments, GPU and Tegra Processor. The GPU segment offers processors, which include GeForce for PC gaming; GeForce NOW for cloud-based game-streaming service; Quadro for design professionals working in computer-aided design, video editing, special effects, and other creative applications; Tesla for deep learning, accelerated computing, and general purpose computing; and GRID for cloud-based visual computing users. The Tegra Processor segment provides processors that integrate a computer onto a single chip under the Tegra brand name; DRIVE automotive computers, which offer self-driving capabilities; and tablet and portable devices for mobile gaming and TV streaming under the SHIELD name. The company's products are used in gaming, professional visualization, datacenter, and automotive markets. It sells its products primarily to original equipment manufacturers, original device manufacturers, system builders, motherboard manufacturers, add-in board manufacturers, and retailers/distributors. NVIDIA Corporation was founded in 1993 and is headquartered in Santa Clara, California.

Source: FinViz.com, January 2018

Slide45

NVIDIA Corporation (NVDA)

Source: Seeking Alpha, October 2017The Motley Fool, October 2017

POSITIVES: Nvidia continues to deliver strong results, and as it updates the market in approximately one week’s time, of its Q3 2018 results. Gaming is NVIDIA's largest segment right now, but the company's biggest growth opportunity is in the data center. This has been a market where NVIDIA has consistently posted more than 100% year-over-year growth for several quarters in a row. The graphics specialist started shipping its new Volta GPUs for the data center last quarter, and it's in full production mode for the third quarter. Nvidia’s datacenter segment has been delivering strong growth as its Q2 2018 results showed that this segment was up a phenomenal 175% year over year. While its datacenter revenue comprises of less than 20% of its consolidated revenue, this type of growth could soon reach a third of Nvidia's overall revenue. Moving on, gaming also continues to provide Nvidia with strong industry tailwinds. Nvidia's Pascal-based GPUs are leading the gaming revolution. Nvidia's business model is an envious one too many operators in this highly competitive sector. The case in point being that Nvidia provides the platform which gamers crave in the most demanding and rewarding gaming experiences. This strong environment allowed Nvidia to deliver extraordinary results, with its Q2 2018 being up 52% year over year. This level of growth is welcome anytime, but particularly welcome when this level of aggressive growth comes from Nvidia’s core business, which accounts for just over 50% of Nvidia's consolidated revenue as of Q2 2018. Furthermore, Nvidia's financials are a truly remarkable money making machine. Not only does it have a 20% normalized free cash flow margin (which I use as cash proxy in place of ROIC), it also generates a nicely stable and largely predictable amount of free cash flow. Nvidia has delivered positive and growing EPS and free cash flow numbers over time. Possible concerns: Nvidia's shares are so egregiously overpriced relative to its past performance. For example, while Nvidia's revenue has arguably been steadily growing with a CAGR of 12% over the past years, investors are currently willing to pay 15.5 times its current revenue. This is 5 times more than in the past 5 years on average.

Slide46

PayPal Holdings, Inc. (PYPL)

PayPal Holdings, Inc. operates as a technology platform company that enables digital and mobile payments on behalf of consumers and merchants worldwide. It enables businesses of various sizes to accept payments from merchant Websites, mobile devices, and applications, as well as at offline retail locations through a range of payment solutions, including PayPal, PayPal Credit, Braintree, Venmo, Xoom, and Paydiant products. The company's platform allows consumers to shop by sending payments, withdraw funds to their bank accounts, and hold balances in their PayPal accounts in various currencies. PayPal Holdings, Inc. was founded in 1998 and is headquartered in San Jose, California.

Source: FinViz.com, Janury 2018

Slide47

PayPal Holdings, Inc. (PYPL)

Source: Morningstar, September 2017

POSITIVES: PayPal’s growth has been phenomenal in the last few years as the company continues to notch up 20% growth quarter after quarter. What makes PayPal’s growth phenomenal is that, despite being a new entrant to the payments processing industry and being pitted against formidable and well-established players, PayPal did a lot better than Visa (V) in terms of revenue increase over the last five years. Between 2012 and 2016, PayPal added $5,180 million to its top line, compared to Visa’s $4,661 million and MasterCard’s (MA) $3,385 million. One of the firm’s key metrics for growth is PayPal’s merchant services. By the end of the first quarter of 2016, PayPal had 14 million merchant accounts, which grew to 17 million by the end of the recently concluded second quarter of 2017. The three million additions in merchant accounts has resulted in a nearly $25 billion increase total payment volume. The metric also shows that merchants have been increasing their engagement with PayPal. It could be due to several factors, such as increased trust, PayPal continually adding more services and more customers, and so on. The combination of merchant accounts, ably supported by cross-border trade, is a wide moat that will be extremely hard for its competitors to break. Its customers who are already using the PayPal platform are not going to switch services that easily unless the competitor’s offering brings some tangible additional benefits. The growth of e-commerce already has shrunk global markets, and it will continue to connect merchants and customers all over the world. PayPal has made it extremely easy for merchants and customers to conduct their trade in a transparent manner, and the company has earned their trust. It’s a self-feeding cycle that PayPal has been constructing over the past several years, and that’s going to fuel the company’s growth over the next decade at least. With such a long growth runway and a robust ecosystem of products to keep customers and merchants coming in and coming back, this is one of the better investment opportunities in the payments industry.Possible concerns: One possible concern is the large concentration of business with eBay. Also, there might be a pullback due to Apple’s in-message payment recently announced.

Slide48

Stryker Corporation (SYK)

Stryker Corporation operates as a medical technology company. The company operates through three segments: Orthopaedics, MedSurg, and Neurotechnology and Spine. The Orthopaedics segment provides implants for use in hip and knee joint replacements, and trauma and extremities surgeries. The MedSurg segment offers surgical equipment and surgical navigation systems, endoscopic and communications systems, patient handling, emergency medical equipment and intensive care disposable products, reprocessed and remanufactured medical devices, and other medical devices for use in various medical specialties. The Neurotechnology and Spine segment provides neurotechnology products that include products used for minimally invasive endovascular techniques; products for brain and open skull based surgical procedures; orthobiologic and biosurgery products, such as synthetic bone grafts and vertebral augmentation products; and minimally invasive products for the treatment of acute ischemic and hemorrhagic stroke. It also provides spinal implant products comprising cervical, thoracolumbar, and interbody systems for use in spinal injury, deformity, and degenerative therapies. The company sells its products to doctors, hospitals, and other healthcare facilities through company-owned sales subsidiaries and branches, as well as third-party dealers and distributors in approximately 85 countries. Stryker Corporation was founded in 1941 and is headquartered in Kalamazoo, Michigan.

Source: FinViz.com, February 2018

Slide49

Stryker Corporation (SYK)

Source: Investopedia, February 2018

POSITIVES: The company has provided 10 uninterrupted years of revenue growth. Stryker markets to three healthcare areas: orthopedics, surgical equipment and supplies, and brain and spine surgery based on advanced technology. In mid-November 2016, the stock started an upward march, and it remained in an uptrend through the end of 2017, eventually reaching an all-time high high of $170 in late January 2018 before moving downward with the rest of the market. The stock's 50-day moving average remains well above its 200-day moving average, which is a bullish indicator. The company has been enhancing its growth potential via acquisitions, and in September 2017, Stryker acquired imaging technology firm NOVADAQ Technologies Inc. Possible concerns: The healthcare industry is watching the Trump presidency closely. President Trump's promise to repeal and replace Obamacare hit repeated stumbling blocks in Congress. Despite the uncertainty surrounding these efforts to overhaul the nation's healthcare system, Stryker has risen dramatically throughout 2017.

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United Rentals, Inc. (URI)

United Rentals, Inc., through its subsidiaries, operates as an equipment rental company. It operates in two segments, General Rentals; and Trench, Power, and Pump. The General Rentals segment engages in the rental of general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts, earthmoving equipment, and material handling equipment; aerial work platforms, such as boom lifts and scissor lifts; and general tools and light equipment comprising pressure washers, water pumps, and power tools. This segment serves construction and industrial companies, manufacturers, utilities, municipalities, and homeowners. The Trench, Power, and Pump segment is involved in the rental of specialty construction products, including trench safety equipment, such as trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers, and line testing equipment for underground work; power and HVAC equipment consisting of portable diesel generators, electrical distribution equipment, and temperature control equipment; and pumps primarily used by energy and petrochemical customers. It serves construction companies involved in infrastructure projects, municipalities, and industrial companies. The company also sells new equipment, such as aerial lifts, reach forklifts, telehandlers, compressors, and generators; contractor supplies, including construction consumables, tools, small equipment, and safety supplies; and parts for equipment that are owned by the company's customers, as well as provides repair and maintenance services. It sells its used equipment through its sales force, brokers, and Website, as well as at auctions and directly to manufacturers. As of January 1, 2018, the company operated 997 rental locations in the United States and Canada. United Rentals, Inc. was founded in 1997 and is headquartered in Stamford, Connecticut.

Source: FinViz.com, January 2018

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Sources: Barron’s, August 2017The Motley Fool, August 2017

POSITIVES: United Rentals was one of the beneficiaries of the so-called Trump Trade, as investors bet that it would benefit from increased infrastructure spending. It gained 88% from a low of $70.92 on Nov.3 to a high of $133.36 on March 1, but had dropped 20% through last Friday's close. But with construction needed to repair the damage from Harvey, United Rentals could see an uptick in demand for its products. Last month, United Rentals reported 8.5% higher earnings per share for its second quarter, backed by a 13.5% year-over-year jump in rental revenue. Encouraged by strong ongoing demand for equipment, management upgraded full-year revenue guidance to $6.25 billion-$6.4 billion, representing nearly 10% upside at the midpoint from last year's revenue level. Furthermore, management expects to generate strong free cash flow, to the tune of $825 million-$925 million, this year. Between its strong operational standing and a potential uptick in infrastructure spending in the U.S. in the wake of Trump's signing an executive order to expedite infrastructure-project approvals, United Rentals' stock appears to have solid upside potential. More so because at a trailing P/E of 16, United Rentals is trading at a significant discount to its five-year metric, as well as the industry average.Possible concerns: The stock has been struggling to maintain momentum, having lost nearly 14% of its value in the past six months. But if United Rentals' recent bumper quarterly numbers are anything to go by, there's every chance the stock could whip up solid returns going forward.

United Rentals, Inc. (URI)

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Visa Inc. (V)

Visa Inc. operates as a payments technology company worldwide. The company facilitates commerce through the transfer of value and information among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. It operates VisaNet, a processing network that enables authorization, clearing, and settlement of payment transactions; and offers fraud protection for account holders and assured payment for merchants. The company also offers gateway services for merchants to accept, process, and reconcile payments; manage fraud; and safeguard payment security online, as well as processing services for participating issuers of visa debit, prepaid, and ATM payment products. In addition, it provides digital products, including Visa Checkout that offers consumers an expedited, and secure payment experience for online transactions; and Visa Direct, a push payment product platform, that allows businesses, governments, and consumers to use the Visa network to transfer funds from an originating account to another via a debit, prepaid, or credit card number, as well as Visa token service that replaces the card account numbers from the transaction with a token. Further the company offers corporate (travel) and purchasing card products, as well as value-added services. It provides its services under the Visa, Visa Electron, Interlink, V PAY, and PLUS brands. Visa Inc. was incorporated in 2007 and is headquartered in San Francisco, California.

Source: FinViz.com, January 2018

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Source: Zacks January 2018

POSITIVES: Visa operates the world's largest retail electronic payments network, with more than 2.3 billion Visa-branded credit and debit cards in circulation globally. Visa witnessed a revenue CAGR of 12.7% from 2008-2017. Analysts believe that the company will retain its revenue momentum in the fiscal first quarter on the back of its strong market position and attractive core business that continues to be driven by new deals, renewed agreements, accretive acquisitions, increasing spending via cards, shift to digital form of payments and expansion of service offerings.The company expects annual net revenue growth of high single digits on a nominal dollar basis for fiscal 2018. The company resolved approximately 75% of contract conversions by the end of fiscal 2017, and the remainder will be done primarily in the first half of fiscal 2018. As a result, client incentives in the first half of 2018 will be significantly higher than fiscal 2017. Thus the quarter should enclose higher client incentives.Possible concerns: Visa does have an average annual P/E Ratio of 25 over the life of the company. That is high when compared to others.

Visa Inc. (V)

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Westlake Chemical Corporation (WLK)

Westlake Chemical Corporation manufactures and markets basic chemicals, vinyls, polymers, and building products. It operates through two segments, Olefins and Vinyls. The Olefins segment offers ethylene, polyethylene, styrene monomer, and various ethylene co-products, as well as sells propylene, crude butadiene, pyrolysis gasoline, and hydrogen. The Vinyls segment provides specialty and commodity PVC, VCM, EDC, chlorine, caustic soda, chlorinated derivative, and ethylene products. This segment also manufactures and sells products fabricated from PVC, including pipe, fittings, profiles, trims, mouldings, fence and decking products, window and door components, and film and sheet products. The company's products are used in various consumer and industrial markets, including flexible and rigid packaging, automotive products, coatings, and residential and commercial construction, as well as other durable and non-durable goods. Westlake Chemical Corporation also offers its products to a range of customers, including chemical processors, plastics fabricators, small construction contractors, municipalities, and supply warehouses primarily in North America and Europe. The company was founded in 1985 and is headquartered in Houston, Texas. Westlake Chemical Corporation is a subsidiary of TTWF LP.

Source: FinViz.com, January 2018

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Source: Zacks Equity Research, January 2018

POSITIVES: The company gained from significant contribution of Axiall acquisition, improved demand and increased selling prices for major products in the quarter. The company gained from significant contribution of Axiall acquisition, improved demand and increased selling prices for major products in the quarter. Westlake Chemical, in its third-quarter call, said that it benefited from increased demand for all major products in both Vinyls and Olefins segments along with higher prices in the Vinyls segment. The company sees increased ethylene availability with the start-up of new ethylene plants and completion of capacity expansions. The company believes that the Axiall buyout and continued investments to improve the reliability and operational efficiency of its assets will enable it to fully leverage the improving Vinyls market. It also sees favorable demand trends for all of its major products to continue moving ahead. Westlake Chemical should continue to benefit from the Axiall acquisition. The acquisition has diversified the company’s product portfolio and geographical operations, creating a North American leader in Olefins and Vinyls. The company is on track to realize around $120 million in synergies and cost savings related to the acquisition in 2017.Possible concerns: There might likely be a short-term bump in earnings fade.

Westlake Chemical Corporation (WLK)

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Lee Johnson Capital Management uses research and investment information from sources that it deems reliable. This information is not a recommendation to buy or sell, but for illustrative purposes. Please consult your advisor before investing in these or like investments, as not all investments are suitable. Each investor has different goals and objectives.

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LJCM uses our proprietary screening to determine what we consider, the Top 25

Growth Stocks to own in our All In Growth Model. Within this model LJCM will purchase

a 4% position of each stock. These stocks are evaluated on a weekly basis and due to market conditions LJCM may make adjustments to the stock percentage and holding positions through out the month.

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