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360 Huntington FundSession One – Summer 2013

Fund Management – FINA 6360 & 6361

The 360 Huntington Fund

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The 360 Huntington Fund:

• A student run investment fund – created through donations from the university, faculty, administrators, and alumni.

• Course is designed to give students experience in equity research and portfolio management.

• Expectation is for students to be proficient in asset valuation, asset allocation and understand investment concepts – become a mutual fund analyst

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Organizational Chart:

Managing Director(MD)L. Howard

Chief of Research (COR)

Manny Epperly

Alumni Advisor Alumni Relations, Equity AdvisorS. Altschuler

Faculty Advisors

H. Platt & P. Bolster

Sector ManagerInfotech, Healthcare, Telecom

R. Kinkead

Sector ManagerIndustrials, Materials, Energy, Utilities

P. DaSilva

Sector ManagerConsumer Disc/Staples, Financials

J. D’Souza

Alumni Advisor Macroeconomic StrategyK. Lavin

Chief Operations Officer(COO)

J. Lofaro

Chief Marketing Officer (CMO)

D. Qi

Chief Risk Officer(CRO)

(Open)

Chief Accounting Officer (CAO)

M. McCarthy

Chief Compliance Officer (CCO)

M. Janer

24 Analysts1-15 Jr. Analysts

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WE HOLD 30 STOCKSTHE NAV IS 405,508.04$ CA$H 649.02$ BUYS 4% OF A $15,000 BLOCKQUARTERLY CASH PROJECTION 7/28/2013 DVD's 1,202.41$ Contributes 8.02% OF A $15,000 BLOCKYTD RETURN* 10.70%BENCHMARK** UNDERPERFORMANCE -182.752 BPS*YTD Return is calculated as (NAVt-NAV0)/NAV0, NAV0 being the NAV on 31 December 2012**Our benchmark is the Russell 3000. The YTD return is also calculated / 31 December 2012

BETA PORTFOLIO IS 1.13

Gilead Sciences Inc. 39% 1 -19%AbbVie Inc 36% 2 -18%Red Robin Gourmet Burgers, Inc. 31% 3 -17%IntercontinentalExchange, Inc. 31% 4 -13%Blackrock, Inc. 31% 5 -11%NRG Energy Inc 22% 6 -1%United Therapeutics Corportation 22% 7 -1%Halliburton Company 20% 8 3%Stericycle Inc 16% 9 3%Google, Inc. 16% 10 4%

Blackrock, Inc. 122% 41%NRG Energy Inc 113% 47%IntercontinentalExchange, Inc. 112% 55%Lowe's Companies, Inc. 106% 59%Ingredion Inc 101% 64%Google, Inc. 98% 64%Red Robin Gourmet Burgers, Inc. 96% 65%Empresas ICA SA (ADR) 95% 66%United Therapeutics Corportation 95% 69%Church & Dwight Co., Inc. 94% 73%***This ranking is for sell discipline purposes, does not take in account the holding period

Denbury ResourcesUltratech, Inc.TW Telecom Inc

Apple Inc. (LOT-1)CARBO Ceramics Inc.

TW Telecom Inc

Silver Wheaton Corp.NVIDIA CorporationStericycle IncApple Inc. (LOT-1)

Church & Dwight Co., Inc.

Ranking on % of target***WINNERS LOSERS

The Western Union Company

The Middleby Corporation

360 HUNTINGTON FUND PERFORMANCE SPREADSHEET

4/29/2013AS OF

WINNERS LOSERSRanking on capital gains + dividend yield YTD

1.74%

Apple Inc. (LOT-2)

(2 LOTS OF APPLE)

Jones Lang Lasalle Inc

Apple Inc. (LOT-1)Ultratech, Inc.Raymond James FinancialCARBO Ceramics Inc.Diana Containerships Inc

CURRENT RISK FREE RATE

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Sector Weights

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Sector Gaps vs. Russell 3000

Research Deadlines:

• 3 weeks prior to your presentation:– Speak with you sector manager about the fund’s

portfolio needs– Reply to you sector manager in 1-2 day with four

possible securities to present– Please cc the managing director and chief of research

on your correspondence with your sector manager

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Research Deadlines:

• 2 weeks prior to your presentation:– Work with your sector manager to choose a stock to

present from the four choices– Create a draft of your presentation

• Including a valuation and PowerPoint presentation

– Please cc the managing director and chief of research on your correspondence with your sector manager

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Research Deadlines:

• 5 days prior to your presentation:– Your sector manager will contact you by e-mail or by

phone and give you feedback on your draft.– You will be responsible for implementing your sector

manager’s recommendations.– Communicate any concerns regarding your progress

to your sector manager.– Please cc the managing director and chief of research

on your correspondence with your sector manager

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Research Deadlines:

• 3 days prior to your presentation:– Send the final draft of your presentation to your

sector manager. – Send an e-mail to the fund’s e-mail group: 360hf-

all@googlegroups.com• In your message, identify the stock you will be

presenting and explain briefly why you choose it.

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Research Deadlines:

• 2 days prior to your presentation:– Your sector manager will give you the “go/no go” to

present.– If you are cleared to present, post your research,

both the valuation and PowerPoint presentation, on blackboard.

• Post your work in the Discussion Board in the Regular Meeting and Research folder.

– Small changes to your presentation are still allowed after this point.

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Company Name (Ticker)

Recommendation (Buy, Initiate, Sell, etc.)

Analyst Names

The 360 Huntington Fund

Sector:

Industry:

Industry (VL):

Sector:

Industry:

Industry (VL):

**(Sector from GICS; Industry from GICS & Value Line)**

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Disclosure statement

• I own xxx shares of the stock recommended.

• I have no positions in any stocks mentioned, but plan to initiate new positions within the next 72 hours.

• I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

• Or others

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Business Description & Market Profile

• Market Profile– Market cap (small/mid/large)– Primary market (US/global/Europe/Asia/emerging/…)

• Business Description– Describe the company’s business lines, market, share,

accolades, etc…

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Industry Analysis

• SWOT/Porter’s Five Forces/ Relevant Macroeconomic Factors/etc.

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Catalysts

• Your company’s specific catalysts

• Discuss key research-supported factors that have historically driven excess returns, possibly including valuation ratios (versus industry, the market, and/or firm history), insider activity, M&A activity, earnings beats/misses, and earnings revisions.

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Risks

• Market risks

• Industry risks

• Company specific risks

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Comparables• Important quantitative data for your company vs. the

peer group, industry, etc. (below is not exhaustive!)Your company

Competitor 1 Competitor 2 Competitor 3

52W Range

Market Cap

Beta

ROA

ROE

Operating Margin

P/S (TTM)

P/B (TTM)

P/E (TTM)

PEG

Dividend Yield

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Price Graph

• (Your company vs. Russell 3000 (IWV) and peer group

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Others – your discretion

• In-depth financial statement analysis

• Technical analysis

• Psychological factors

• Anything else

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Valuation

Value Weight$57.88 50%$56.07 25%$63.67 25%

100%

$54.28

$58.888.5%-0.8%

NordstromSummary

Expected Alpha

Current Price

Target

% Undervalued

DCF

MultiplesHistorical Relative P/E

• (copy your valuation summary as image)

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Supplements

• Materials for Q&A

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Q&A

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Working with Your Sector Manager:

• Your sector manage will be your best resource for questions regarding valuations, presentations, and coverage updates.

• Sector managers will report analysts’ progress to the managing director and chief of research.

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Jr. Analyst Responsibilities• Coverage updates:

– Jr. Analysts will follow and document updates, earnings reports, press releases, and other market factors that effect their assigned securities.

– Coverage updates are due before each class– Use sites like Factiva, Morningstar, and Valueline through the NEU

website to find information on your stocks.

• Support Analyst research:– Jr. Analysts will help analysts search for quality securities, and help

with the early research under the direction of the Sector Managers.

• Valuation Model Tutorial Session– All Jr. Analysts must attend a tutorial session session, where Sector

Managers will teach the Fund’s valuation model in depth. – The session will be held on an “off” Monday, during regular class

hours. Date to be determined.

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Author: Sabrina Sabau Date: Monday, April 22, 2013 3:37:09 PM EDT Subject: RE: Coverage Update 4-20-13 Coverage Update April 22, 2013 Market Sentiment: The Russell 3000 will return > 3% in the next 3 months. HAL

Hold at target of $50

Current price: $38.29

52 week range: $26.28-$43.83

MarketWatch Analyst Recommended Buys: 27; Overweight: 4; Hold: 5; Sells:0 On April 22, HAL announces diluted Q1 EPS of $0.67, down from $0.89 diluted EPS of Q1 2012, but in-line with consensus forecasts. Chairman Dave Lesar explains the company achieved a quarterly revenue record of $7 billion with the help of international rig operations. The Sperry Drilling, Baroid, and Multi-Chem products contributed to the highest product line revenues per quarter. Operating income in North America increased 30% aided by favorable input costs and tolerance for higher priced technological services to clients. Whereas North America focused on margins, the international top line grew 21% yoy. HAL’s quarterly dividend increased from $.09 to $.125 per share as well. Further management expectations revolve around deepwater, unconventional, and mature fields markets with revenue growth in the low teens.

Sample Coverage Update

Other ways to contribute to the Fund:

• Rise & Game Competitions:

• http://www.udayton.edu/business/rise/

• Take on a leadership position– Risk Officer position currently available– Many other officer/manager positions available for the spring

semester (including COO, Compliance Officer, Sector Manager).

– If interested in an officer position, speak with COO Jordan Lofaro after class.

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What Has Worked in Investing:• Research paper is located on blackboard,

offering investment strategies:– Low P/E or P/B– High dividend yields– Insider trading– A dramatic decline in trading price– Small market capitalization stocks– Momentum

• Please familiarize yourself with this reading, especially if you do not have a finance background.

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Investment Approaches:

• Catalyst:

• Macroeconomic events:

• Valuation driven:

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How to find stocks using Value Line:

• Using a Value Line filter to find securities…

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Closing:

• Class Participation:– We expect discussion and debates to take place

during class, in order to uncover investment opportunities and enhance the learning experience.

• Attendance:– If you will miss class please e-mail Manny Epperly

and Lee Howard

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