IT Sector Presentation

IT Sector PresentationIT Sector PresentationKyle Schneider Patrick SymmondsKyle Schneider Patrick Symmonds

Information Technology in the S&P 500

Information Technology in the S&P 500

Financials - 20.77%

Info. Technology 15.45%

Health Care - 11.67%

Industrials - 11.43%

Energy - 10.79%

Consumer Disc. - 10.20%

Consumer Stap. - 9.29%

Telecom - 3.75%

Utilities - 3.51%

Materials - 3.12%

Current HoldingsCurrent Holdings

Akamai Technologies, Inc (AKAM)1.03%

Hewlett-Packard Company (HPQ)3.68%

Intel Corporation (INTC) 4.04%

Microsoft Corporation (MSFT)5.02%





Class RecommendationClass Recommendation

Current: Information Technology1.38% Underweight

Class Vote: Increase holdings up to1% Overweight

Current: Information Technology1.38% Underweight

Class Vote: Increase holdings up to1% Overweight

General StrategyGeneral Strategy

Intra-sector diversificationWe like most current holdingsBut see new opportunitiesIndustries:

Intra-sector diversificationWe like most current holdingsBut see new opportunitiesIndustries:

Communications EquipmentComputer HardwareComputer Networks

Computer PeripheralsComputer Services

Computer Storage Devices

Electronic Instr. & ControlsOffice EquipmentScientific & Technical Instr.SemiconductorsSoftware & Programming

Proposed HoldingsProposed Holdings





Research In Motion Limited USA (RIMM)3.00%

Google Inc. (GOOG)3.00%







AkamaiAkamai

RecommendationSell our 103 basis points in AkamaiAll CDN companies are facing

uncertainty Increased competition and

alternatives taking away market share

Online video is currently increasing at a decreasing rate

RecommendationSell our 103 basis points in AkamaiAll CDN companies are facing

uncertainty Increased competition and

alternatives taking away market share

Online video is currently increasing at a decreasing rate

AkamaiAkamai

Why the recent drop?Lost three million in market capitalization

in three weeks timeSecond Quarter earnings, the company

announced increased spending and lower margins

Market leader whose patents and early technological leads are wearing off

Increased CDN competition, price wars, video content growing online, but at slower rate

Priced very aggressively, such that any bad news would have caused the stock to slip

Why the recent drop?Lost three million in market capitalization

in three weeks timeSecond Quarter earnings, the company

announced increased spending and lower margins

Market leader whose patents and early technological leads are wearing off

Increased CDN competition, price wars, video content growing online, but at slower rate

Priced very aggressively, such that any bad news would have caused the stock to slip

AkamaiAkamai

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

AKAMAI TECHNOLOGIES INC (AKAM)PRICE 34.18 DATE 08-10-2007PRICE 34.18 DATE 08-10-2007StockVal®

0.50.5

1.01.0

2.02.03.03.0

5.05.0

8.08.0

14.014.0

23.023.0

41.041.0

70.070.0

120.0120.0

210.0210.0

370.0

630.0

1100.0

The Ohio State UniversityFisher College of Business

Price Change % Diff SP5

1-Day -0.87 -0.91

1-Week 3.89 2.45

4-Weeks -32.05 -25.68

QTD -29.73 -26.42

YTD -35.66 -38.15

2006 166.53 152.91

2005 52.95 49.95

2004 21.10 12.10 FYE Dec 2006 EPS 0.40

First Call Data 2007 2008 2009

Mean Estimate 1.27 1.67 2.06Change +217% +32% +23%

High 1.30 1.79 2.10

Low 1.25 1.56 2.04

Total 21 20 3

# Up 0 0 0

# Down 12 12 2

House Estimate

PE Ratio 26.9 20.4 16.6

Revenues ($Mil) 529

Market Value ($Mil) 5,637

Shares Out (Mil) 164.9

Volume 60-Day Avg (Th) 6,158

Volume 60-Day Avg ($M) 210.5

Dividend Estimate None

Payout Ratio

Retention Rate

Dividend Yield

Data Page # 1

AkamaiAkamai

StockVal®AKAMAI TECHNOLOGIES INC (AKAM) Price 34.182003 2004 2005 2006 20072003 2004 2005 2006 2007 2008

PRICE RELATIVE TO S&P INFO TECH. SECTOR COMPOSITE ADJ (SP-45) M-Wtd1

2

4

10

20

HI 10.54 LO 1.00 ME 3.45 CU 6.31

08-08-200308-10-2007

PRICE / YEAR-FORWARD EARNINGS RELATIVE TO S&P INFO TECH. SECTOR COMPOSITE ADJ (SP-45) M-Wtd0

1

2

3

4

HI 3.78 LO 0.87 ME 1.83 CU 1.30

08-08-200308-10-2007

PRICE / SALES RELATIVE TO S&P INFO TECH. SECTOR COMPOSITE ADJ (SP-45) M-Wtd0

3

6

9

HI 8.60 LO 1.00 ME 3.36 CU 4.29

08-08-200308-10-2007

PRICE / CASH FLOW ADJUSTED RELATIVE TO S&P INFO TECH. SECTOR COMPOSITE ADJ (SP-45) M-Wtd0

2

4

6

HI 99.99 +LO 0.82 ME 2.17 CU 2.76

08-08-200308-10-2007

AkamaiAkamai

StockVal®AKAMAI TECHNOLOGIES INC (AKAM) Price 34.182003 2004 2005 2006 20072003 2004 2005 2006 2007 2008

PRICE RELATIVE TO INTERNET SERVICES (166A) E-Wtd0.5

1.0

1.5

2.5

4.0

HI 3.62 LO 0.97 ME 2.16 CU 1.82

08-08-200308-10-2007

PRICE / YEAR-FORWARD EARNINGS RELATIVE TO INTERNET SERVICES (166A) E-Wtd0.0

0.1

0.2

0.3

HI 1.58 LO 0.00 ME 0.11 CU 0.75

08-08-200308-10-2007

PRICE / SALES RELATIVE TO INTERNET SERVICES (166A) E-Wtd0

3

6

9

HI 8.46 LO 1.96 ME 3.91 CU 2.06

08-08-200308-10-2007

PRICE / CASH FLOW ADJUSTED RELATIVE TO INTERNET SERVICES (166A) E-Wtd0.0

0.5

1.0

1.5

2.0

HI 2.21 LO 0.00 ME 0.64 CU 1.10

08-08-200308-10-2007

AkamaiAkamai

StockVal®AKAMAI TECHNOLOGIES INC (AKAM) Price 34.182003 2004 2005 2006 2007

PRICE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd1

2

4

10

20

HI 10.40 LO 1.00 ME 3.58 CU 6.32

08-08-200308-10-2007

PRICE / YEAR-FORWARD EARNINGS RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd0

2

4

6

HI 5.42 LO 1.40 ME 2.65 CU 1.66

08-08-200308-10-2007

PRICE / SALES RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd0

3

6

9

12

HI 16.65 LO 1.99 ME 6.77 CU 8.14

08-08-200308-10-2007

PRICE / CASH FLOW ADJUSTED RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd0

3

6

9

12

HI 99.99 +LO 1.58 ME 3.69 CU 4.26

08-08-200308-10-2007

AkamaiAkamai

1/07 2/07 3/07 4/07 5/07 6/07 7/07 8/07

AKAMAI TECHNOLOGIES INC (AKAM)PRICE 34.18 DATE 08-10-2007PRICE 34.18 DATE 08-10-2007StockVal®

3131

3333

3535

3737

3939

4141

4343

4646

49495151

5454

5757

61

64

68

200

50SP5

0.63

Volume in Thousands of Shares10001000

20002000

30003000

50005000

90009000

1500015000

25000 60 Day Avg. Volume 6,158

GoogleGoogle

Recommendation Purchase 300 basis points of SIM

portfolio

Recommendation Purchase 300 basis points of SIM

portfolio

GoogleGoogle

Story Had very good second quarter, but missed

and was beaten up by market (over reaction)

Google phone in the works, expected release in 2008 or 2009

Entering into battle for old analog distribution systems

Currently all earnings come from ads Believes in investing in people, may harm

short term, but good long term for long term growth

Story Had very good second quarter, but missed

and was beaten up by market (over reaction)

Google phone in the works, expected release in 2008 or 2009

Entering into battle for old analog distribution systems

Currently all earnings come from ads Believes in investing in people, may harm

short term, but good long term for long term growth

GoogleGoogle

2003 2004 2005 2006 2007 2008

GOOGLE INCORPORATED (GOOG)PRICE 515.75 DATE 08-10-2007PRICE 515.75 DATE 08-10-2007StockVal®

70708080

100100

120120

140140

170170

200200

240240

280280

340340

400400

480480

570

680

810



1-Day 0.20 0.16

1-Week 2.53 1.10

4-Weeks -6.59 -0.23

13-Weeks 9.91 13.81

26-Weeks 11.66 10.58

QTD -1.33 1.98

YTD 12.00 9.51

2006 11.00 -2.62 FYE Dec 2006 EPS 9.98



High 15.92 20.73 25.79

Low 14.93 18.13 19.89

Total 34 32 10

# Up 19 19 1

# Down 15 12 4

House Estimate

PE Ratio 33.8 26.5 22.1

Revenues ($Mil) 13,431






Payout Ratio

Retention Rate

Dividend Yield

Data Page # 1

Google Google

StockVal®GOOGLE INCORPORATED (GOOG) Price 515.752004 2005 2006 20072004 2005 2006 2007 2008

PRICE RELATIVE TO S&P INFO TECH. SECTOR COMPOSITE ADJ (SP-45) M-Wtd0.5

1.0

1.5

2.5

4.0

HI 3.59 LO 0.93 ME 2.96 CU 3.59

08-20-200408-10-2007

PRICE / YEAR-FORWARD EARNINGS RELATIVE TO S&P INFO TECH. SECTOR COMPOSITE ADJ (SP-45) M-Wtd1.2

1.5

1.8

2.1

2.4

HI 2.23 LO 1.25 ME 1.59 CU 1.62

08-20-200408-10-2007


4

6

8

HI 7.55 LO 3.99 ME 5.48 CU 4.41

08-20-200408-10-2007


4

6

8

HI 7.72 LO 2.20 ME 3.49 CU 2.46

08-20-200408-10-2007

StockVal®GOOGLE INCORPORATED (GOOG) Price 515.752004 2005 2006 20072004 2005 2006 2007 2008

PRICE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd0.5

1.0

1.5

2.5

4.0

HI 3.65 LO 0.91 ME 2.97 CU 3.65

08-20-200408-10-2007

PRICE / YEAR-FORWARD EARNINGS RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd1

2

3

4

HI 3.48 LO 1.75 ME 2.30 CU 2.08

08-20-200408-10-2007

PRICE / SALES RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd7

8

9

10

HI 15.40 LO 7.63 ME 10.72 CU 8.36

08-20-200408-10-2007

PRICE / CASH FLOW ADJUSTED RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd2

4

6

8

10

HI 12.54 LO 3.38 ME 5.27 CU 3.80

08-20-200408-10-2007

Research in MotionResearch in Motion

Manufacturer of BlackBerry communication device

Founded 1984, taken public 40 Billion Dollar Market Cap Canadian based company Currently trading around $210-$215 Price Target $265-$280 Upside Potential 23%-33%

Manufacturer of BlackBerry communication device

Founded 1984, taken public 40 Billion Dollar Market Cap Canadian based company Currently trading around $210-$215 Price Target $265-$280 Upside Potential 23%-33%

Cons of Research in Motion

Cons of Research in Motion

Trading close to all time high is price and many ratios

Competition from iPhone and other alternatives.

Trading close to all time high is price and many ratios

Competition from iPhone and other alternatives.

2002 2003 2004 2005 2006 2007 2008

RESEARCH IN MOTION LIMITED (RIMM)PRICE 207.00 DATE 08-10-2007PRICE 207.00 DATE 08-10-2007StockVal®

3344

66

99

1313

1919

2727

3939

5656

8181

118118

170170

245

353

510



1-Day -4.17 -4.20

1-Week -5.26 -6.70

4-Weeks -9.02 -2.65

QTD 3.51 6.81

YTD 62.00 59.51

2006 93.58 79.96

2005 -19.91 -22.91

2004 146.66 137.66 FYE Feb 2007 EPS 3.34



High 6.51 9.84 11.37

Low 5.48 6.35 8.92

Total 31 30 5

# Up 1 2 3

# Down 0 0 0

House Estimate

PE Ratio 35.2 26.1 20.8

Revenues ($Mil) 3,506






Payout Ratio

Retention Rate

Dividend Yield

Data Page # 1

StockVal®RESEARCH IN MOTION LIMITED (RIMM) Price 207.002002 2003 2004 2005 2006 20072002 2003 2004 2005 2006 2007 2008

PRICE4

10

30

90

240HI 231LO 4ME 67CU 207GR 108.7%

08-09-200208-10-2007

PRICE / YEAR-FORWARD EARNINGS10

20

30

40

50

HI 99.9 +LO 11.2 ME 24.2 CU 30.3

08-09-200208-10-2007

PRICE / SALES0

5

10

15

20

HI 17.52 LO 2.44 ME 8.76 CU 11.22

08-09-200208-10-2007

PRICE / CASH FLOW ADJUSTED20

40

60

80

100

HI 100.0 +LO 20.1 ME 36.6 CU 46.1

08-09-200208-10-2007

StockVal®RESEARCH IN MOTION LIMITED (RIMM) Price 207.002002 2003 2004 2005 2006 20072002 2003 2004 2005 2006 2007 2008

PRICE RELATIVE TO S&P INFO TECH. SECTOR COMPOSITE ADJ (SP-45) M-Wtd1

2

5

10

23

HI 22.69 LO 0.94 ME 8.49 CU 22.59

08-09-200208-10-2007

PRICE / YEAR-FORWARD EARNINGS RELATIVE TO S&P INFO TECH. SECTOR COMPOSITE ADJ (SP-45) M-Wtd0.0

0.5

1.0

1.5

2.0

HI 99.90 +LO 0.37 ME 1.08 CU 1.71

08-09-200208-10-2007


2

4

6

HI 5.69 LO 1.01 ME 2.99 CU 4.10

08-09-200208-10-2007


2

4

6

HI 99.99 +LO 1.13 ME 2.04 CU 2.67

08-09-200208-10-2007

Pros of Research in MotionPros of Research in Motion

International Exposure large part of business and growingIncludes Europe and China

Recent decline presents good buying opportunity

Company is growing and has great upside potential

International Exposure large part of business and growingIncludes Europe and China

Recent decline presents good buying opportunity

Company is growing and has great upside potential

Proposed HoldingsProposed Holdings













Questions?Questions?

Documents

IT Sector Presentation