UNIVERSITY OF CONNECTICUT Student Managed Fund December 3rd, 2004 Undergraduate Portfolio Timur...

UNIVERSITY OF UNIVERSITY OF CONNECTICUT Student CONNECTICUT Student

Managed FundManaged FundDecember 3rd, 2004December 3rd, 2004

Undergraduate PortfolioUndergraduate PortfolioTimur

BrazilerJason Bliss Paul

DobryninGigi Gopalan Daniel Hey Ryan

MacNeilAdam

PoussardNick 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

6.73% 6.83%

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10

S&P SMF

Equity Allocation

LOW $22,132.00

6%

KCP$25,682.40

6%

KO $19,655.00

5%

AMGN $18,012.00

5%

MSFT $19,169.15

5%

VIA $26,677.50

7%

WMT $18,221.00

5%

CASH $31,410.10

7%

VFINX $217,083.22

54%

Portfolio StatisticsTicker 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

409,124.79*Include dividend yields to be realized.

Portfolio Gains/LossesPercent Return

AMGN5.80%

KCP8.80%

KO1.4%

LOW2.20%

MSFT7.75%

VIA3.40%

WMT-6.00%

VFINX6.74%

.

Gai

ns/L

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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

Quantitave Analysis

Monitor Portfolio

Investment Process: A Disciplined Bottom-Up Approach

Portfolio

Qualitative Analysis

Consensus

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

EquityAnalysis

HistoricalInformation

Annual Reports

FutureProjections

FinancialStatements

Competition

EfficiencyRatio

AnalysisValue Analysis

Equity 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

0

5

10

15

20

25S&PSMF

Industry allocation

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?