Transcript Green&Gold Fund

Recommendation: Buy Och-Ziff (OZM)
Key Investment Points
• Stellar risk adjusted performance of their funds
• Good dividend
• Unfairly discounted valuation
•Opportune entry point
Industry Overview
•Focus on operational excellence, growth, performance, risk
management, and compliance
•Asset Management CEOs most optimistic out of any industry
•Very capable of adaptation and reinvention
•Asset allocation shift towards Alternative Assets
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Merger arbitrage
Convertible arbitrage
Equity Restructuring
Credit and distressed debt
Private Equity (to a lesser extent)
Real Estate (to a lesser extent)
Investment Information
Prev Close:
1y Target Est:
52wk Range:
Avg Vol (3m):
Market Cap:
P/E (ttm):
EPS (ttm):
Div & Yield:
3 Year Price Graph (Morningstar)
9.48
12.44
7.32-17.56
1,798,120
955.41M
18.96
.50
.36 (3.90%)
Forward P/E: 7.82
SWOT Analysis
Strengths
Alignment of Interest
Team based culture
Synergies among investment
strategies
Focused on infrastructure
Dividend
Low leverage
Weaknesses
Uncorrelated Equity vs. Fund
performance
Extensive regulation
No sunset provision/high water
mark reset
Opportunities
Expansion of global presence
Structured Credit
3-year money contribution to
revenue
Threats
China breakdown and global
economic effects
New debt and AUM covenants
Loss of key partner(s)
Exchange of Group A unit for
Class A share
Investors demand lower fees
Investment Thesis
• We should own this stock to take advantage of performance
fees not yet priced in. Management fees make up most of
the current valuation and 3 year money is scheduled to
boost management fees significantly in 2012 and 2013.
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Historical average industry P/E 12-13
OZM earnings
Earnings (ttm) 1.11
 Value 13.32 – 14.43
Earnings (2011 forecast) .50
 Value 6.00-6.5
Earnings (2012 forecast) 1.19
 Value 14.28 – 15.47
Average 2011/2012 forecast
Current Value 10.14 – 10.98 Stock currently undervalued
Portfolio Placement / Recommendation
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Sector : Alternatives
Industry Group: Asset Management
Current Holdings: ODMAX, PRPFX, MOO, GXG
Target Sector Allocation: 10%, $47,641
Current Sector Allocation: 7.5% , $35,696
Remaining Allocation: 2.5%, $11,945
BUY 800 shares of OZM at Limit Price of 9.48
(approx. $7,584 1.5% of portfolio)
Holding Period/Exit Strategy: 12 months, Consider
selling if stock price rises above $15.
Recommendation: Buy iShares MSCI Canada Etf
(ECW)
Key Investment Points
• Second largest oil reserve behind Saudi Arabia
• Financially stable country
• Resource rich
• Chemicals, Energy, Minerals
Industry Overview
•Better GDP growth than US 2.7% vs. 1.8% yet the index has lagged
the S&P 500 -15% vs. 2.11%
•More expansion potential in terms of agriculture due to growth in
arable land
•Low fiscal public debt to GDP ratio 34%
•Less exposure to European crisis than US or emerging markets
•Currently trading at about par with the dollar despite the dollar’s rise
Sector Breakdown
•Financials
31.98%
•Energy
26.66%
•Materials
21.32%
•Industrials
5.79%
•Consumer D
3.47%
•Telecom
3.28%
•Consumer S
3.01%
•Utilities
1.29%
•Information T
1.22%
•Health Care
1.18%
•Other
.81%
Royal Bank of Canada
 TD Bank
 Bank of Nova Scotia
 Suncor Energy
 Barrick Gold
 Canadian Natural Res
 Potash of Sask
 Goldcorp
 Bank of Montreal
 Canadian Natural Rail
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6.14%
5.67%
4.64%
4.22%
4.06%
3.41%
3.22%
3.08%
3.04%
2.89%
Investment Information
Prev Close:
1y Target Est:
52wk Range:
Avg Vol (3m):
Market Cap:
P/E (ttm):
EPS (ttm):
Div & Yield:
3 Year Price Graph (Morningstar)
27.63
12.44
23.48-34.57
2,512,750
4.47B
13.61
2.00
.39 & 2.60%
Forward P/E: N/A
SWOT Analysis
Strengths
Weaknesses
Financially stable country
Slow global growth
Financially stable holdings
Exposure to Oil
Low exposure to European
Oil production cumbersome
Low population
crisis
Opportunities
Threats
Increase global trade outside
China breakdown and global
of US
Overlooked upside potential
Increase Oil production
economic effects
Investment Thesis
•We should own this security to diversify out of dollar
denominated assets as a result of potential QE3 and gain
exposure to Canada's rich resources and financial stability.
This is an opportune time to take advantage of the divergence
in the index's performance and the country's fundamentals.
Portfolio Placement / Recommendation
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Sector : Alternatives
Industry Group: Asset Management
Current Holdings: ODMAX, PRPFX, MOO, GXG
Target Sector Allocation: 10%, $47,641
Current Sector Allocation: 7.5% , $35,696
Remaining Allocation: 2.5%, $11,945
BUY 400 shares of EWC at Limit Price of 27.63
(approx. $11,052 2.32% of portfolio)
Holding Period/Exit Strategy: 12 months, Consider
selling if stock price rises above $34.