Transcript presentation - University of Connecticut

UNIVERSITY OF CONNECTICUT
Student Managed Fund
December 3rd, 2004
Undergraduate Portfolio
Timur Braziler
Jason Bliss
Paul Dobrynin
Gigi Gopalan
Daniel Hey
Ryan MacNeil
Adam Poussard
Nick Prastos
Tanicka Ward
Trevor Russo
Mission
• To employ a systematic approach that
consists of both quantitative and
qualitative elements in order to identify
companies to invest in
Portfolio Objectives
• Outperform the S&P 500 index
• Develop a well-diversified portfolio
within a fluctuating market
environment
• Select holdings with low-medium risk
• Invest in companies with greater than
10% required rate of return over a 5-10
yr. period
Current Status
• Starting funds = $382,960 (9/1/04)
• Current balance= $409,124.79 (12/2/04)
• Return to date: 6.83%
S&P 500 vs. SMF
10
9
8
7
6
5
4
3
2
1
0
6.73%
6.83%
S&P
SMF
Equity Allocation
CASH
$31,410.10
7%
AMGN
KO
$18,012.00 $19,655.00
5%
5%
KCP
$25,682.40
6%
LOW
$22,132.00
6%
MSFT
$19,169.15
5%
VIA
$26,677.50
7%
VFINX
$217,083.22
54%
WMT
$18,221.00
5%
Portfolio Statistics
Ticker
Date
Quantity
Purchase
Price
12/02
Close
Change
Total
Change
Current
Value
KO
9/24
500
39.86
40.40
1.4
270.00
20,200.00
KCP
11/18
870
28.68
31.19*
8.8
2,183.70
27,135.30
AMGN
11/10
300
59.50
62.98
5.8
1044.00
18,894.00
LOW
11/01
400
56.50
57.72
2.2
488.00
23,088.00
VIA
10/04
750
35.80
37.03
3.4
922.5
27,772.50
MSFT
11/01
715
28.16
30.26*
7.5
1501.5
21,635.90
WMT
11/08
350
56.58
53.18
-6.0
-1190
18,613.00
VFINX
9/08
-
103.48
110.43
6.74
-
220,375.99
Cash
-
-
-
-
-
-
31,410.10
*Include dividend yields to be realized.
409,124.79
Portfolio Gains/Losses
Percent Return
KCP
8.80%
MSFT
7.75%
VFINX
6.74%
.
AMGN
5.80%
Gains/Loss
VIA
3.40%
KO
1.4%
LOW
2.20%
WMT
-6.00%
Procedures for Allocation
• Small team research efforts
• Selection of companies based on
potential growth and stability
• Screening of equities based on
qualitative and quantitative analysis
within the required objectives
Investment Process: A
Disciplined Bottom-Up Approach
Monitor Portfolio
Portfolio
Consensus
Qualitative Analysis
Quantitave Analysis
Company Analysis
Equity Selection Criteria
• Perform a historical and current analysis of
information disclosed in financial statements
and analyst reports
• Financial Strength
– Companies who generate excess cash
– Companies who are repurchasing stock
– Companies that operate with low debt
• Accounting Practices
– Scrutinize accounting and reporting practices
• Probability of future projections
Equity
Analysis
Historical
Information
Annual
Reports
Financial
Statements
Efficiency
Future
Projections
Equity
Analysis
Value
Analysis
Competition
Ratio
Analysis
Management
• Management objectives
• Board of directors
– Invested interest
• Management
• Capital Allocation Strategy
– Low debt
• Insider Trading
• SEC Filings
Financial Models
• Value-line Model
– Estimate of FV of equity in 10 years, discounted using our
required rate of return to find buy price
• Discounted Cash Flow Model
– Growth is analyzed to determine today’s stock price based
on projected Cash Flows
• Earnings Yield Model
– Measures yield power with earnings’ growth
Monitor and Review
• Review
– -10% , + 10%
• Stop loss
– -15%
• Earning Announcements
• Headline News
• Market factors
C
C
pl
es
U
til
iti
es
Te
le
co
m
at
er
ia
ls
Te
ch
20
M
In
fo
ia
ls
e
al
s
ea
l th
ca
r
In
du
st
r
H
Fi
na
nc
i
En
er
gy
ta
is
cr
et
io
na
ry
on
su
m
er
S
on
su
m
er
D
Industry
allocation
25
S&P
SMF
15
10
5
0
Looking Forward
• Diversify portfolio holdings
• Currently evaluating:
– Nestle
– Wrigley
– Diageo
– American Financial Realty
Conclusion
• Stock Selection and Market Conditions
• Stability and confidence gained
through extensive research and
analysis
• Surpass the S & P 500
Thank You
•
•
•
•
The Steering Committee
The Foundation
The Advisory Board
Faculty
– Patrick Terrion
– Chinmoy Ghosh
QUESTIONS?
&
COMMENTS?