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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?