John L. Grove College of Business Financial Advisory€¦ · Capital One Financial, LLC David J. Morgan ‘80 Farmers Insurance - Retired Joseph T. Nicholas, III, CFP ‘99 Wilmington

John L. Grove College of Business Financial Advisory

Council 2019-2020

Jennifer L. Sassani, '93, Chair

Hershey Trust Company

Michelle R. Chopper, '02, CPA

Cohen & Company

Justin J. Ellsesser, '11, CFA, CAIA

AndCo Consulting

Chris J. Jackson, '97, AFIM

truNorth Financial Services

Joshua L. Jenkins, '12, CFP, ChFC

Jenkins Financial

Timothy G. Long, CFP, IAR

The Advisors at Cornerstone Financial, LLC

Louise Wisman Lovell

US Nuclear Regulatory Commission-Retired

Jonathan C. Moats, '10

Capital One Financial, LLC

David J. Morgan ‘80

Farmers Insurance - Retired

Joseph T. Nicholas, III, CFP ‘99

Wilmington Trust

Zach T. Paul, ‘09

Berkshire Hathaway Home Services

Lisa H. Percetti, ’15, CPA

Ernst & Young

Richard Powers, ‘98

Vanguard Group

Christopher S. Weber, '03

DeRock Electric Company, Inc.

Letter to Friends and Affiliates

John L. Grove College of Business Shippensburg University 1871 Old Main Drive Shippensburg, PA 17257-2299

www.ship.edu/business

Office: 717-477-1435

Fax: 717-477-4003 [email protected]

Dear Stakeholders, May 2, 2020 The 2019-20 Investment Management Program (IMP) is honored to share the following report with the friends and

supporters of the Wisman Fund. We are enriched by the educational foundation that is created through our coursework

in the Finance Program of the John L. Grove College of Business, the Finance Advisory Council, Shippensburg

University, and the Shippensburg University Foundation, all whom generously contributes to the program. The Wisman Fund was created by Mr. Frank Wisman through the SU Foundation to provide the undergraduate students

of Shippensburg University an opportunity to actively manage an active fund in the legitimate financial markets, with a

goal to generate returns above the predetermined benchmark. In agreement with the founders of the fund, the class

provides an annual four-year scholarship to an incoming finance student. Over the past year, the IMP has enhanced operational processes, standards of reporting securities and annual and semi-

annual reports that have contributed to our value of constant improvement. We suggest that each new program member

should utilize the Bloomberg terminal training known as Portfolio Management. This will allow new investment

analysts to better understand how to research securities and learn for themselves what kind of investment strategies

prove successful. The year of 2019 proved to be a year of growth. In that time, we saw companies benefit from increased consumer

spending and industrial expansion. We experienced the Federal Open Market Committee lowering rates to try and fuel

the continuing economic growth. The United States and China trade war stood to be a volatile series of events that had

serious impacts on global economic activities. During the spring of 2020, the IMP managers faced adversity due to COVID-19. Not only did the fund experience a

significant loss in value, the managers were forced to adapt to a situation that altered how the program had traditionally

operated. Since Shippensburg University decided to move classes to be 100% online for the remainder of the semester,

the fund’s managers were not able to meet face-to-face, had no access to the Trading room or Bloomberg Terminal, and

eventually left campus. To work around this change, the managers held meetings via video conferencing software (i.e.

Zoom). Finally, through the stress, confusion, and anxiety, the IMP managers made the best use of the limited resources

available to finish the school year strong and present an Annual Report that we are proud of. In addition, the IMP

managers were stripped of the opportunity to have a memorable experience attending the GAME (Global Asset

Management) Forum. GAME is a global financial symposium in New York City that fills the managers with excitement

as it offers a great opportunity to display the fund’s performance, gain valuable knowledge, and improve upon our

current skills. However, we are very honored to report that the Wisman Fund was awarded third place in the

Undergraduate Value Fund category. We would like to extend this honor to the 2019 Spring IMP class who helped

contribute to the 2019 performance.

Nonetheless, the IMP is pleased to report that we have beat our benchmark by 3.77% for the year 2019. The managers

of the Wisman Fund would like to extend our appreciation to the donors of the fund, the SU Foundation, finance faculty,

our faculty member of record Dr. Rim, and additional key stakeholders of the John L. Grove College of Business who

have an integral role in sustaining the fund and program. We are truly grateful for your continued help and support,

The Spring and Fall 2019 IMP Portfolio Managers

Table of Contents

INTRODUCTION ........................................................................................................................................... 2

2019 STATE OF THE ECONOMY .................................................................................................................. 3

EXECUTIVE SUMMARY ................................................................................................................................ 4

INVESTMENT STRATEGY ............................................................................................................................. 5

PORTFOLIO CHARACTERISTICS ................................................................................................................... 6

TOP TEN HOLDINGS .................................................................................................................................... 6

EQUITY SECTOR ALLOCATION ..................................................................................................................... 7

PORTFOLIO PERFORMANCE ........................................................................................................................ 8

2019 TOP 5 CONTRIBUTORS ...................................................................................................................... 9

2019 TOP 5 DETRACTORS ........................................................................................................................ 10

RISK ADJUSTED PERFORMANCE .............................................................................................................. 11

COMMUNICATIONS SERVICES-UNDERWEIGHT .......................................................................................... 12

CONSUMER DISCRETIONARY-OVERWEIGHT ............................................................................................... 16

CONSUMER STAPLES-OVERWEIGHT ......................................................................................................... 19

ENERGY-UNDERWEIGHT ........................................................................................................................... 24

FINANCIALS-UNDERWEIGHT ..................................................................................................................... 27

HEALTHCARE-UNDERWEIGHT ................................................................................................................... 31

INDUSTRIALS-UNDERWEIGHT ................................................................................................................... 37

INFORMATION TECHNOLOGY-OVERWEIGHT .............................................................................................. 41

MATERIALS-OVERWEIGHT ......................................................................................................................... 47

UTILITIES - OVERWEIGHT .......................................................................................................................... 50

REAL ESTATE-OVERWEIGHT ...................................................................................................................... 53

DIVIDENDS ................................................................................................................................................ 61

MERGERS AND ACQUISITIONS .................................................................................................................. 61

PORTFOLIO SNAPSHOT ............................................................................................................................. 62

2 Investment Management Program

INTRODUCTION

Mission Statement

The Investment Management Program (IMP) directs students with the skills, theories, and strategies needed to

become a knowledgeable investment analyst that can lead to becoming a portfolio manager through a pro-active

educational environment. The IMP offers students an opportunity to grow their leadership, communication, and

inter-group skills. Learning from actual experience is at the core of the IMP. The IMP fund’s investment goal is to

achieve a risk-adjusted return greater than that of the benchmark, which is composed of 80% equities and 20%

fixed income securities.

The 2019-2020 IMP is pleased to present the following Annual Report to illustrate the progress of the Wisman

Fund. Managers within the organization obtain real-world experience, having the ability to research and develop

security recommendations that consist of equities, fixed incomes and an increased interest in commodities to add

value to the portfolio. The willingness of students to develop a positive return was substantial and innovative

thinking was highly encouraged. The IMP management team has a focus on how to make profits from real

investments. The value of the portfolio increased from $173,020 at the end of 2018 to $225,950 at the end of

2019, an increase in value of $52,939 (30.59% rate of return).

The management team is composed of a President, Chief Compliance Officer, Accounting Coordinator, Public

Relations Coordinator and two Co-Risk Managers; each of the 11 managers contributed to fund management.

These individuals set each sector’s target weights by doing research and forecasting which sectors will aid us in

beating the benchmark. The IMP allocates resources depending on what will be beneficial in a long-term time

horizon.

Each analyst is required to present two investment proposals with a buy or sell recommendation to aid in

achieving our investment objective. This assessment of investment opportunities teaches individuals the backings

to a solid security presentation, gives them experience to what they will be doing as young professionals, and

provides them with confidence in seeing an investment strategy payoff. The managers communicate through

class discussions, email, and GroupMe (a messaging app) to ensure the group is up-to-date on upcoming

assignments. In terms of content for class discussions, members analyze economic conditions, political issues,

and world news to better understand how various events may impact the market and the IMP portfolio. Our class

had 11 managers, one manager per sector, who kept up with trends in their sectors and reported to the team.

The IMP has the opportunity to participate in the Global Asset Management Education (G.A.M.E.) Forum every

year. The G.A.M.E Forum is a global portfolio competition that provides students the opportunity to showcase their

portfolio and compete against other university portfolios, offers educational sessions to gain knowledge about the

financial industry and current trends, as well as network with financial professionals. This year, the Wisman Fund

placed third in the Undergraduate Value Portfolio division among more than forty portfolios in this category. The

fall 2019 portfolio managers would like to extend this accomplishment and our gratitude to the spring 2019

portfolio managers for contributing to the construction of the portfolio that performed so well in 2019.

The Financial Advisory Council (FAC) oversees the IMP Program. The IMP is extremely grateful for their efforts to

enhance our educational experience. The feedback and guidance from the FAC plays a key part in developing

students into successful financial professionals. The IMP will continue to evolve and grow in a positive direction

with the help of FAC members and other professionals, who provide the critical role in the development of this

program.

2019 Annual Report 3

2019 STATE OF THE ECONOMY

The initial step in evaluating a security using a top-down method is to evaluate the current economy and

industries to discover where our economy will be headed. The consensus of the 2019 IMP class is that the United

States economy is currently in a mid-late stage of the business cycle. While it is difficult to establish a timeline for

the transitioning of stages for the economy, it is important to gear up for the following late and recessionary

phases. The economy of the U.S. is experiencing slow growth, with average growth rate expectations in 2020 and

2021. The key factors that will impact the U.S and global economy moving forward are the Coronavirus (COVID-

19), interest rate changes, and economic growth slowdown. These factors will dictate a great number of other

factors because of their extended impacts. Among others, COVID-19 has created significant instability in the

global economy and will continue to stunt economic growth as more cases in new countries have been reported

on a daily basis. The containment of this dreadful virus will prove to limit the global economic expansion. As the

presidential election ensues, we may experience more volatility. We also believe interest rates will fall as an

attempt to support continuous economic growth. In conclusion, the most realistic possibility may be much slower

growth in 2020 and 2021 because of these head-wind factors and uncertainties.

Fall 2019 IMP Class (back, from left); Andrew Butz, Corbin Chevaux, Sean Fox, yyyy; (front, from left) Kyle McGinnis, Shelby Denlinger, Nicolas Seymour, Destinee Bobo, Tyler Hahn, and John Morey.

Spring 2020 IMP Class (back, from left); Tyler Hahn, John Morey, Corbin Chevaux, Sean Fox, Cedric Adams; (front,

from left) Nicolas Seymour, Madison Eutzy, Hannah Hunt, Morgan Kowalski, Jack Cornely,

and Andrew Butz.


EXECUTIVE SUMMARY

Investment Objective

To achieve a risk-adjusted return exceeding the

benchmark, which consists of 80% of the S&P 500

Index and 20% of the Bloomberg Barclays U.S.

Aggregate Bond Index.

Investment Strategy

The organization invests in both fixed-income and

equity securities. Members analyze securities using a

top-down approach and select undervalued stocks

based on the following characteristics:

Companies with proper business plans and

strategies

Sound financial fundamentals

Stock trades at a discount to estimates of

intrinsic value

Demonstrates strong executive

management team that has growth in mind

Fixed-income securities are selected based on:

Investment grade bonds that have credit

ratings of BBB or higher as reported by

Standard & Poor’s, Moody’s, and Fitch

Group

Asset Allocation

As of December 31, 2019, the fund’s value totaled

$225,950, with $192,884 (85.37%) in equity securities

and equity ETFs and $20,364 (9.01%) in fixed income

securities.

The portfolio is composed of 33 stocks, 3 fixed-income

securities, and 2 equity ETF’s.

Portfolio Performance

The annual return of the portfolio was 30.59%, which

outperformed the benchmark of 26.82%.

For the risk-adjusted performance, the IMP fund’s 1-

year Sharpe and Treynor ratios beat the benchmark. In

terms of the Sharpe ratio, portfolio versus benchmark,

the ratios are 2.85 and 2.66, respectively. The Treynor

ratio is 29.47% which outperforms the benchmark of

26.82%.

Portfolio Characteristics

Price/Earnings (P/E) 33.26

Price/Book (P/B) 9.17

ROE (%) 31.62

Dividend Yield (%) 1.97

Market Cap (USD in Billion) 392.83

Beta 1.04

Asset Allocation

Equity 85.37%

Fixed Income 9.01%

Cash/Other 5.64%


INVESTMENT STRATEGY

The IMP managers invest in both fixed-income and

equity securities. The managers begin analyzing

with a top-down approach before selecting

undervalued securities that possess some key

characteristics. These key characteristics are as

follows:

The company implements proper

business plans and strategies.

The company offers differentiated

products and/or services.

The company has strategic competitive

advantages over its competitors.

The company demonstrates sound

financial fundamentals.

The security is priced at a discount

when compared to estimates of intrinsic

value.

The company possesses a strong

management team that has growth in

mind.

Fixed-income securities are investment

grade and have a credit rating of BBB or

higher as reported by Standard &

Poor’s, Moody’s, and Fitch Group.

To determine a security’s intrinsic value, the IMP

managers utilize various valuation models. These

models include stable, two-stage, and three-stage

dividend discount models, as well as stable, two-

stage, and three-stage free cash flow-to-equity

models for firms who do not pay dividends. After

obtaining the estimated intrinsic value from any one

of these models, analysts will apply a 15% margin

of safety to develop lower and upper bounds. If the

current market price of the security is below the

lower bound, we conclude that the security is

undervalued and is a potential buy.

To further analyze a security, the IMP mangers

conduct a relative valuation of key financial ratios.

Relative valuation is conducted by taking financial

ratios of the security of interest and comparing

them amongst its industry peers when applicable.

The various categories of financial ratios and the

ratios themselves that analysts focus on are as

follows:

Financial Ratios

o Price-to-earnings ratio

o Price-to-book ratio

o Price-to-sales ratio

o Price-to-earnings growth ratio (PEG)

o Price-to-free cash flow ratio

Financial Health

o Current ratio

o Long-term debt-to-equity ratio

o Debt-to-equity ratio

Efficiency

o Receivables turnover ratio

o Inventory turnover ratio

o Asset turnover ratio

Profitability

o Net profit margin

o Return on assets (ROA)

o Return on equity (ROE)

Growth Rates

o Earnings per share (EPS) growth

o Revenue growth


PORTFOLIO CHARACTERISTICS

As of December 31, 2019, the value of the IMP portfolio was $225,950, consisting of $192,884

(85.37%) in equities, $20,364 (9.01%) in fixed-income securities, and $12,700 (5.62%) in cash. Some

of the key portfolio characteristics are shown in the table below as weighted averages:

Portfolio Characteristics IMP Asset Allocation

Price/Earnings (P/E) 33.26 Equity 85.37%

Price/Book (P/B) 9.17 Fixed Income 9.01%

ROE (%) 31.62 Cash 5.62%

Dividend Yield (%) 1.97

Market Cap (USD in Billion) 392.83

Beta 1.04

TOP TEN HOLDINGS

The Wisman Fund’s top ten holdings account for 45.1% of the overall portfolio. These holdings include

Amazon, Apple, Microsoft, UnitedHealth Group, PowerShares S&P 500 High Dividend Yield Portfolio ETF,

iShares Core U.S. Aggregate Bond Index ETF, Accenture PLC class A, Vanguard High Dividend Yield ETF,

Visa and Procter & Gamble.

Securities Market Value Weight

Amazon (AMZN) $14,782.72 6.94%

Apple Inc. (AAPL) $12,333.30 5.76%

Microsoft Corp. (MFST) $11,827.50 5.61%

UnitedHealth Group (UNH) $11,759.20 5.17%

PowerShares S&P 500 High Dividend (SPHD) $11,183.62 4.40%

iShares Core U.S. Aggregate Bond Index

ETF(AGG) $8,989.60

3.83%

Accenture PLC Class A (ACN) $8,422.80 3.65%

Vanguard High Dividend Yield (VYM) $7,590.51 3.26%

Visa (V) $7,516.00 3.19%

Procter & Gamble (PG) $7,494.00

3.05%

Total $101,899.25 45.1%


EQUITY SECTOR ALLOCATION

As of December 31, 2019, the Consumer Discretionary, Consumer Staples, Information Technology,

Materials, Utilities and Real Estate sectors are overweighted with respect to the Standard & Poor’s 500

Index. On the other hand, the Communication Services, Energy, Financials, Healthcare, and Industrials

sectors are underweighted with respect to the S&P 500. However, it must be noted that at the end of

2019, the IMP managers noticed that Martin Marietta Materials was listed in the Industrials sector

within our portfolio, when in fact, it was supposed to be in the Materials sector, causing the overweight

in Materials and underweight in Industrials.

Equity Asset Allocation

Sector IMP S&P 500 Over/(Under) Weight Target Weight

Communication Services 7.99% 10.39% -2.40% 7.10%

Consumer Discretionary 10.00% 9.75% 0.25% 11.00%

Consumer Staples 10.57% 7.21% 3.37% 9.50%

Energy 4.28% 4.35% -0.07% 4.50%

Financial 10.27% 12.95% -2.68% 12.80%

Health Care 13.62% 14.20% -0.58% 14.00%

Industrials 6.58% 9.05% -2.47% 8.80%

Information Technology 25.40% 23.20% 2.20% 22.10%

Materials 4.51% 2.65% 1.86% 3.10%

Utilities 3.46% 3.32% 0.14% 4.00%

Real Estate 3.33% 2.93% 0.40% 3.10%

TOTAL 100.00% 100.00% 0.00% 100.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

Consum

er D

iscre

tiona

ry

Consum

er S

taples

Energ

y

Finan

cials

Health

care

Indus

trials

Info

rmat

ion Te

chnolog

y

Mat

erials

Comm

unicatio

n Serv

ices

Utilite

s

Real E

stat

e

IMP Sector Weights vs. S&P 500

IMP S&P 500


PORTFOLIO PERFORMANCE

In 2019, the IMP portfolio’s return was 30.59%, which outperformed both the first benchmark (80% S&P

500, 20% Barclays US Aggregate Bond Index) by 3.77% and the second benchmark (80% FTSE All-World

Stock Index, 20% Barclays US Aggregate Bond Index) by 4.27%. The summer months were filled with

more volatility due to headlines regarding the China trade war. During this time, the portfolio saw value

followed greatly increased after sharp decreases. Around the end of the year, volatility caused by trade

war headlines decreased significantly, enabling the portfolio to have a strong finish in 2019. One of the

key sector weightings that helped our performance was being overweight in the Information Technology

sector, which massively outperformed the S&P. However, the portfolio missed opportunities to further

outperform the benchmark by being underweight in other sectors that outperformed the S&P as well,

such as Financials and Communication Services. We have three main goals for the portfolio moving

forward. The first goal is to reduce the amount of holdings within the portfolio and reallocate sale

proceeds into “winners”, or holdings that continue to achieve outstanding returns. The second goal is to

increase the portfolio’s dividend yield by seeking out relatively high paying “dividend kings”, or

companies with extraordinarily long records of consecutive annual dividend increases. By seeking out

these companies, we expected the portfolio’s annual dividend income to consistently increase. This will

cover the expense of the four scholarships given to finance students (one incoming freshman, one

sophomore, one junior, and one senior) and provide a stream of income for future classes to reinvest

into the portfolio. The third goals is to continue creating a more balanced and diversified portfolio by

lowering our weight in equities, and increasing our weight in fixed-income securities to better match the

weights of our benchmark.

(%) Jan. Feb. Mar. Apr. May. Jun. July. Aug. Sept. Oct. Nov. Dec. Monthly 7.74 1.52 2.96 3.91 -4.32 5.69 1.34 -1.15 0.83 2.61 3.20 3.19

Benchmark Monthly

6.62 2.56 1.94 3.25 -4.72 5.89 1.20 -0.75 1.39 1.80 2.89 2.40

Cumulative 7.74 9.38 12.61 17.02 11.96 18.33 19.91 18.53 19.50 22.63 25.56 30.59 Benchmark Cumulative

6.62 9.35 11.46 15.08 9.64 16.10 17.49 16.62 18.24 20.36 23.84 26.82

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Monthly Return

Benchmark Monthly Return

Cumulative Return

Benchmark Cumulative Return


2019 TOP 5 CONTRIBUTORS

Apple, Inc. (AAPL): Apple Inc. provided our portfolio an outstanding 86.16% return in 2019, making 2019

Apple’s best year in terms of stock performance since 2009. The tech giant surpassed the $1 trillion

market cap as its stock price soared over $290 at the end of 2019. The company saw a drop in iPhone

sales from 2018, however, sales still exceeded expectations. Despite this drop in iPhone sales, Apple

continued to appreciate in price, mainly due to strong performance in their wearable products such as

AirPods and the Apple Watch. IMP holds 42 shares of Apple, Inc.

Martin Marietta Materials, Inc. (MLM): Martin Marietta Materials, Inc. had a strong 2019, with the stock

granting the IMP portfolio a 62.70% return. The firm has managed to grow their earnings every year over

the past five years, while increasing their dividends per share by an average of 5.18% per year in the

same time period, and are positioned to continue its strong earnings. Martin Marietta Materials offers

resiliency to the portfolio. While the market was volatile over the summer months, MLM managed to

beat earnings estimates and appreciate in value. The company experiences above average net margins

in comparison to the industry, showing management’s effectiveness in generating shareholder wealth.

IMP held 7 shares of Martin Marietta Materials, Inc. in 2019.

Facebook (FB): Facebook provided the portfolio with a 56.57% return. Facebook has consistently grown

their daily and monthly active users over the past three years. This increase in users directly benefits

their advertising revenue, ultimately increasing the firms value. Furthermore, the outlook for Facebook

remains positive as more businesses continue to join social media and utilize its advertising benefits,

leading to increased revenues for Facebook. IMP holds 17 shares of Facebook.

Microsoft Corporation (MSFT): Microsoft Corporation continued its extraordinary performance with

another outstanding year in 2019, giving the IMP portfolio a 55.26% return. Microsoft has proven to be

a reliable technology giant based in Redmond, Washington. Microsoft has consistently grown their

revenue year-over-year mainly due to their focus on subscription based services. The firm has an

intelligent cloud infrastructure, which provides the firm with strong long-term growth. Furthermore,

Microsoft focuses on business-to-business sales by introducing products and services to help enhance

the performance of their partners. With their above average valuation ratios in comparison to the S&P

500, it shows investors are less price sensitive of the security. IMP holds 75 shares of Microsoft

Corporation.

Accenture PLC Class A (ACN): Accenture PLC had an encouraging 2019 with a 49.33% return for the

portfolio. ACN has been a key holding within the portfolio since 2014. Since then, the company has

increased its value by over 160%. Accenture PLC provides consulting and outsourcing services primarily

to Fortune 500 companies in various industries such as communications, media and technology,

financial services, health and public services, energy and other resource companies. Having such

diverse business segments make Accenture PLC one of the largest consulting firms in the world.

Furthermore, Accenture PLC is the leading company within the outsourcing segment, positioning the firm

for future growth as demand for outsourcing has been continually increasing. IMP held 40 shares of

Accenture PLC in 2019.


2019 TOP 5 DETRACTORS

3M (MMM): 3M was a top detractor of the IMP portfolio in 2019, with a -7.41% return. The firm started

off the year strong, rebounding from its disappointing 2018 where it provided the portfolio with a

-16.74% return. However, when headlines about the China trade war started to appear, 3M’s stock price

dropped by over 25% and remained volatile through the summer. This drop in value and volatility did not

come as a surprise as the firm’s revenue comes largely from outside of the United States, with its

industrial segment making up a majority of that revenue. In 2019, IMP held 25 shares of the stock.

Cheniere Energy (LNG): Cheniere Energy provided the IMP portfolio a -4.56% return in 2019. The firm,

who specializes in the liquification and transportation of natural gas, was added to the portfolio in late

October, 2019. Cheniere Energy tends to be a more volatile stock with relatively large price swings in a

short time period. Admittedly, the IMP managers did not enter the position at a beneficial price point,

which we believe contributes to the negative return. However, with Cheniere Energy being a Fortune 500

company that mainly transports and exports liquified natural gas, the company is positioned to have a

bright future as the world shifts to cleaner energy sources. IMP held 40 shares of Cheniere Energy in

2019.

Honeywell International, Inc. (HON): Honeywell International saw a return of -2.55% in 2019. The firm

operates in the same space as 3M, another detractor of the portfolio. However, Honeywell International

started the year off strong and maintained that momentum before becoming flat at the end of the year.

IMP added 20 shares of the company into the portfolio in mid-November. Although the firm provided a

slight negative return, Honeywell has proven its ability to generate shareholder wealth as they have beat

earnings estimates in every quarter of 2019 while increasing their dividend payout.

SPDR Portfolio Aggregate Bond ETF (SPAB): The SPDR Portfolio Aggregate Bond ETF provided the

portfolio with a return of -0.57% in 2019. SPAB is a fixed income ETF that tracks the performance of the

Bloomberg Barclay’s U.S. Aggregate Bond Index. In an effort to increase the fixed income weight, IMP

established a position size of 200 shares. Although there was slight negative performance from the time

SPAB was bought, we believe that the ETF is a key holding for the portfolio as it provides stability, a

stream of income, and helps match the weights of our benchmark.

iShares Core U.S. Aggregate Bond ETF (AGG): iShares Core U.S. Aggregate Bond ETF is another fixed

income ETF that tracks the Bloomberg Barclay’s U.S. Aggregate Bond Index. In 2019, AGG provided the

portfolio with a -0.35% return. The ETF is owned and managed by BlackRock, Inc., the largest asset

management firm in the world. AGG is very similar to SPAB (mentioned above), as it is viewed as a key

holding within the portfolio by providing stability and income to the portfolio. IMP added 80 shares of

AGG in an effort to increases the fixed income weight of the portfolio.


RISK ADJUSTED PERFORMANCE

The IMP portfolio’s value grew by 30.59% in 2019, which outperformed the benchmark of 26.82%.

Analyzing the 3-year average annual return, the fund outperformed the benchmark by a total of 1.38%

(14.47% and 13.09%, respectively). However, the 5-year average annual return illustrates a differing

result, as the portfolio underperformed its benchmark by 0.65% (9.42% and 10.07%, respectively).

The IMP portfolio has a beta of 1.04, which is greater than the comparing index (i.e. 1.00), indicating

that the portfolio is exposed to slightly greater risk than the overall market. This assumption of greater

risk exposure is confirmed by the portfolio’s standard deviation of 10.72%, which is also greater than

the benchmark’s standard deviation of 10.08%.

Both the Sharpe and Treynor ratios were used to compare the risk-adjusted performance of the IMP

portfolio and its benchmark. For the 1-year period, the portfolio's Sharpe ratio was greater than its

benchmark by 0.19 (2.85 and 2.66, respectively). The portfolio also saw the 1-year Treynor ratio for the

fund at 29.47% had a higher risk-adjusted return than the opposing index (26.82%). The fund’s 3-year

Sharpe ratio of 1.37 is slightly greater than the benchmark by 0.01. On the other hand, the fund’s 5-year

Sharpe ratio of 0.92 trails the benchmark by 0.14. Lastly, when comparing the 3-year and 5-year Treynor

ratios of the fund to the underlying index, the portfolio exceeds the benchmark by 0.32% for the 3-year

period, and lags by 1.12% for the 5-year period.

1-Year 3-Year 5-Year

IMP BENCHMARK IMP BENCHMARK IMP BENCHMARK

Average Annual Return (%) 30.59 26.82 14.47 13.09 9.42 10.07

Growth from $100

Investment $130.59 $126.82 $150.01 $144.64 $156.82 $161.54

Risk Measure

Standard Deviation (%) 10.72 10.08 10.59 9.61 10.25 9.50

Beta 1.04 1.00 1.08 1.00 1.05 1.00

Risk-Adjusted Performance

Sharpe Ratio 2.85 2.66 1.37 1.36 0.92 1.06

Treynor Ratio (%) 29.47 26.82 13.41 13.09 8.95 10.07

COMMUNICATIONS SERVICES-UNDERWEIGHT

Sector Overview

Entertainment: This industry contains Movies and Entertainment

along with Interactive Home Entertainment. The most notable

items of interest in this industry are gaming and movie producing

companies.

Interactive Media and Services: This industry includes companies

engaged in content and information creation or distribution. These

are companies where revenues are derived in pay-per-click

advertising, which is common among search engines, social

media platforms, online classifieds, and online review companies.

Media: This industry is made up of four sub-categories which are

Advertising, Broadcasting, Cable & Satellite, and Publishing. Major

companies within media are commonly found as major networks,

news outlets, and agents of advertising mediums.

Wireless Telecommunication Services: This industry includes

providers of cellular and wireless telecommunication services.

Mobile service carriers and providers make up this industry.

Communication Services is the newest Global

Industry Classification Standard Sector recognized

by our benchmark, the S&P 500. This sector takes

the place of the former Telecommunications sector

and has captured pieces of the Information

Technology and Consumer Discretionary Sectors.

This sector is comprised of companies that provide

communication services through fixed line, cellular,

wireless, high bandwidth and/or fiber optic cable

network. Additionally, companies within this sector

provide internet services such as access, navigation,

and internet related software and services. The

reason for this adjustment in the GICS stems from

the mergers and acquisitions of Telecom companies

by media and internet companies given the massive

shifts in the consumer markets. The way consumers

define the capabilities of their smartphone has

expanded over the last decade and therefore, the

sector must adjust to accommodate.

Diversified Telecommunication Services: This

industry consists of Alternative Carriers, providers of

communications, and high-density data

transmission services. It also includes Integrated

Communication Services, operators of primarily fixed

line telecommunications networks, and companies

providing both wireless and fixed line

communications services not classified elsewhere.

Performance* 1 Year 3 Year 5 Year

Sector 32.70% 4.65% 7.91%

S&P 500 31.50% 15.26% 11.70%

*Annualized Returns


AT&T, Inc. (NYSE: T)

Market Cap:

285.19B

Sector:

Communication

Services

Industry:

Diversified

Telecom

Services

Stock Type:

Large

Value

Current Price:

$39.08

Fair Value:

$42.00

Holding Return:

15.17%

52 Week Range:

$28.30-$39.70

Business Summary

AT&T, Inc. is a company in the Communication Services sector that

provides communication, media, and technology services across the

globe. AT&T is broken up into four segments; Communications,

WarnerMedia, Latin America, and Xandr. The first segment,

Communications, provides wireless and wireline services, as well as

video, broadband, internet, and video entertainment services all

conducted by either satellite, IP-based, or streaming operations.

Communications also sells headsets, wireless computers, data cards and

various accessories (carrying cases and hands-free devices) through

company owned stores, agents, or third-party retailers. The second

segment, WarnerMedia, produces, distributes, and licenses television

programs and feature films. This segment distributes physical and digital

home entertainment products, as well as produces and distributes mobile

and console games. The Latin America segment offers services under

DIRECTV and sky brands such as video entertainment and audio

programming. The final segment, Xandr, conducts digital advertising.

Investment Rationale/Risk

AT&T has acquired many assets in

its life, reaching a customer base of

over 170 million for products and

services to cultivate deeper

customer loyalty. The scale of the

company allows it to stay as a top

tier competitor shown in this year’s

revenue growth, which is larger than

the industry average.

The company is one of the front

runners for 5G, a new technology

that could push mobile phone

companies into some of the biggest

gains they have seen in years.

AT&T had purchased DirecTV with

the idea of creating their own

streaming and television services,

pushing them into a new business

segment that could grow with the

new age of streaming services in the

future.

Key Stats 2015 2016 2017 2018 2019 Industry

2019

Total Return 8.04 29.18 -3.97 -21.43 45.62 12.79

ROA 3.84 3.22 6.95 3.97 2.57 3.46

ROE 12.77 10.56 22.31 11.92 7.55 11.21

Net Margin 9.09 7.92 18.34 11.34 7.67 5.92

Asset Turnover 0.42 0.41 0.38 0.35 0.33 0.42

Financial Leverage 3.28 3.28 3.15 2.89 2.99 3.10

Op. Margin 16.9 15.1 14.9 15.3 16.23 14.96

Revenue Growth 10.84 11.57 -1.98 6.36 3.42 1.51

Op. Income Growth 78.75 -0.31 -3.42 9.55 7.16 5.46

EPS Growth 99.16 -11.39 126.67 -40.13 -3.45 6.56

Earnings Growth Estimates

Earnings Growth Estimate Company Industry

Current Year -1.40 7.90

Next Year 5.70 16.20

Past 5 Years 8.93 21.90

Next 5 Years 5.20 8.80

Valuation Analysis Industry Peers

Ratio 2015 2016 2017 2018 2019

P/E 38.2 18.0 18.6 5.4 17.5 Return ROE P/B 1.7 2.1 1.9 1.1 1.6 Charters Co. Inc. (CHTR) 68.44 4.93

P/S 1.3 1.6 1.5 1.1 1.6 Comcast Corp CA(CMCSA) 30.62 16.92

P/FCF 5.7 6.9 6.1 4.4 5.9 Verizon Comm. (VZ) 9.54 33.64

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Facebook (NASDAQ: FB)

Market Cap:

607.65B

Sector:

Communication

Services

Industry:

Interactive

Media &

Services

Stock Type:

Large

Growth

Current Price:

$205.25

Fair Value:

$220.00

Holding Return:

38.17%

52 Week Range:

$128.56-$208.93

Business Summary

Facebook is the world’s largest social media company with platforms that

extend beyond the Facebook name such as Instagram, Messenger, and

WhatsApp. Facebook has over 2 billion active monthly users, which it

draws back consistently through the platform’s proprietary algorithm of

distributing user content. This algorithm understands and distributes

content based on search history, liked content, connections with other

users and more. The platform’s purpose is to connect people through

written posts, pictures, videos, and messages. In achieving this purpose,

companies pay for advertising placements in coordination with

Facebook’s algorithms to strategically place advertisements in front of

targeted consumers. 90% of Facebooks revenues come from their

advertising business segment.


Facebook is the largest social media

platform, owning many different

popular apps such as Instagram,

Messenger, and WhatsApp.

Facebook’s complex proprietary

algorithms of distribution of user

content promotes daily usage of the

platform, which generates more

value in advertising on the platform.

Facebook’s reach across many

different platforms allows for ad

revenue from multiple different apps

and creates a significant amount of

advertisement sales for the

company.


2019

Total Return 34.1 9.9 53.4 -25.7 51.66 11.86

ROA 8.2 17.8 21.3 24.3 16.02 13.21

ROE 9.1 19.7 23.8 27.9 19.96 20.21

Net Margin 20.5 36.9 39.2 39.6 26.15 20.85

Asset Turnover 0.40 0.48 0.54 0.61 0.61 0.58


Op. Margin 34.7 45.0 49.7 44.6 33.93 23.81

Revenue Growth 43.82 54.16 47.09 37.35 36.76 21.65

Op. Income Growth 24.65 99.63 62.57 23.31 24.51 28.34

EPS Growth 17.27 170.54 54.44 40.45 22.59 -18.48



Current Year 28.00 1.80

Next Year 23.60 23.80

Past 5 Years 42.12 12.50

Next 5 Years 14.33 20.30


Ratio 2015 2016 2017 2018 2019

P/E 105.3 44.4 34.2 19.7 32.9 Return ROE P/B 7.2 6.2 7.2 4.7 6.2 Alphabet, Inc. (GOOG) 28.2 18.1

P/S 18.6 13.5 14.3 7.4 8.9 Twitter, Inc. (TWTR) 11.6 18.9

P/FCF 40.3 26.5 24.3 13.1 16.9 Tencent Holdings (TME) -9.5 9.8

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The Walt Disney Co. (NYSE: DIS)

Market Cap:

257.59B

Sector:

Communication

Services

Industry:

Media

Stock Type:

Large

Core

Current Price:

$144.63

Fair Value:

$155.00

Holding Return:

16.69%

52 Week Range:

$105.94-$153.41

Business Summary

The Walt Disney Company, together with its subsidiaries, operates as a

global entertainment company. The company’s Media Networks segment

operates cable programming businesses under ESPN, Disney, and

Freeform brands; broadcast businesses, including ABC TV Network, and

subscription video-on-demand services and in-home entertainment

formats. It’s Parks and Resorts segment owns and operates the Walt

Disney World Resorts in Florida and California. The company also

operates in the Studio Entertainment segment which produces and

acquires live-action and animated motion pictures to be distributed in

theatrical, home entertainment, and television markets. The company

was founded in 1923 and is based in Burbank, California.


Disney’s Park and Resorts segments

have rebounded since the recession,

and they are continuing to look into

international markets for new parks

shown by the Disneyland Shanghai.

Disney has ownership in many

different companies across many

different genres, including Hulu,

ESPN, and Marvel. This allows for

the reach of the company to be

extremely wide and diverse.

Disney+ features a great opportunity

for the company to reach customers

of all ages and expand their share in

the streaming segment


2019

Total Return 13.02 0.60 4.71 3.59 32.92 15.59

ROA 9.73 10.42 9.56 11.09 6.89 4.97

ROE 18.73 21.39 21.23 23.42 14.81 15.56

Net Margin 15.98 16.88 16.29 18.46 13.81 6.96

Asset Turnover 0.61 0.62 0.59 0.60 0.48 0.43


Op. Margin 25.20 25.80 25.20 24.40 17.03 15.47

Revenue Growth 7.48 6.04 -0.89 7.79 7.74 11.47

Op. Income Growth 14.59 8.58 -3.38 6.95 -6.20 3.07

EPS Growth 15.02 16.94 -0.70 46.92 5.04 47.03




Next Year 32.10 37.20

Past 5 Years 5.22 1.50



Ratio 2015 2016 2017 2018 2019

P/E 18.72 18.23 15.10 15.00 23.07 Return ROE P/B 3.54 3.43 3.37 3.02 2.90 Comcast Corp. (CMCSA) 30.6 16.9

P/S 3.14 2.98 2.97 2.78 3.46 Viacom Inc. (VIAC) -8.1 41.3

P/FCF 11.02 9.12 8.87 7.29 40.27 21st Century FOX (FOXA) -2.6 17.2

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CONSUMER DISCRETIONARY-OVERWEIGHT

Sector Overview Household Durables: The Household Durables industry manufactures

products that cannot be consumed immediately and are purchased

infrequently. Some examples would be appliances, and home and

office furnishings.

Hotels, Restaurants and Leisure: This industry contains hotels, fast

food restaurants, resorts, casinos, cruises, and other leisure

activities. Furthermore, hotels and restaurants tend to pursue

franchise business models.

Internet and Catalog Retail: The Internet and Catalog Retail industry

consists of companies who operate through online marketplaces.

This industry has been experiencing rapid growth and has been a

strong point of our portfolio over the past few years as Amazon.com,

Inc. (AMZN) has seen significant growth.

Leisure Products: The Leisure Products industry contains companies

that focus on leisure activities and goods such as outdoor activities,

sporting goods, and toys. This industry is tightly tied to consumers’

discretionary income and confidence. An example of a company

within this industry is Callaway Golf Company (ELY).

Multiline Retail: The Multiline Retail industry includes operators of

department stores and other general merchandise retailers such as

large-scale supercenters that exclude Food and Staples Retailing.

These companies are typically well-known with an example being

Macy’s Inc. (M).

Specialty Retail: The Specialty Retail industry includes retail

companies that specialize in selling specific categories of goods to

consumers. For example, The Home Depot Inc. (HD) sells home

improvement products to consumers.

Textiles, Apparel and Luxury Goods: Companies within this industry,

such as Under Armour, Inc. (UA), manufactures apparel, footwear and

a variety of accessories

The consumer discretionary sector contains eleven

industries of businesses that sell nonessential

products and services where the demand is typically

more elastic. The performance of the sector is

heavily tied to the economic cycle, more specifically,

consumer confidence and discretionary income. As

of recent, the sector is seeing a shift to online

shopping, which helps explains our holdings in the

sector.

Auto Components: The Auto Components industry

consists of companies that supply various auto

parts. The industry is highly competitive and cyclical,

causing demand to fluctuate and high volatility in the

industry’s profitability. The industry is also very

reliant on the ever-changing cost of raw materials

such as copper and steel.

Automobile: The Automobile industry designs,

produces and markets cars, trucks, and other types

of land vehicles. The automobile industry’s demand

is highly sensitive to the economic cycle and is one

of the most capital-intensive industries with high

fixed costs. Because of this, the profit margins within

the industry can be highly volatile.

Diversified Consumer Services: The Diversified

Consumer Services industry consists of companies

that provide specialized services that are not

classified elsewhere. One example of a diversified

consumer service would be H&R Block, Inc. (HRB),

who offers tax services to consumers and

businesses.

Distributors: The Distributor industry includes

distributors and wholesalers of general merchandise

not classified elsewhere, including apparel,

replacement parts, and wholesale electronics.


Sector 27.90% 16.61% 13.10%

S&P 500 31.50% 15.26% 11.70%

*Annualized Returns


Amazon.com, Inc. (NASDAQ: AMZN)

Market Cap:

920.22B

Sector:

Consumer

Discretionary

Industry:

Internet and

Catalog Retail

Stock Type:

Large

Growth

Current Price:

$1,847.84

Fair Value:

$2,100.00

Holding Return:

208.24%

52 Week Range:

$1,460.93-$2,035.80

Business Summary

Amazon.com, Inc. was founded in 1994 and is headquartered in

Seattle, Washington. Since then, Amazon has become one of the

world’s highest-grossing online retailers, with $280.5 billion in net sales

in 2019. They operate through the following segments: North America,

International, and Amazon Web Services (AWS). It sells general

merchandise and digital media content from third-party sellers through

its online storefront. The company also manufactures and sells

electronic devices such as the Fire Tablet, Fire TV, and Echo devices.

The sale of their general merchandise, digital media content, and fees

collected from third-party sales accounted for 69% of Amazon’s net

revenue in 2019. Additionally, the AWS segment offers cloud space and

cloud computing, and allows for other companies to sell their

merchandise through Amazon. In 2019, AWS became the second

largest business operation of Amazon in terms of revenue, accounting

for 13% of their total revenue. The company also offers Amazon Prime,

a membership program, which provides free shipping, access to

streaming of movies and TV episodes, and other services.


Amazon dominates North American

online retail, and much of the regions’

youth consider it their one-stop-shop

for online retailers.

With more than half of the world’s

Internet users coming from developing

markets, Amazon has sizeable

international growth opportunities for

its marketplaces, advertising, and

hardware assortment in regions like

Europe, Japan, and Southeast Asia.

Amazon’s device portfolio are

intriguing customer acquisition and

retention tools while promoting the

other business segments Amazon

operates through such as the Amazon

Web Services.


2019

Total Return 117.78 10.95 55.96 28.40 23.03 34.05

ROA 0.99 3.19 2.83 6.85 5.97 5.13

ROE 4.94 14.52 12.91 28.27 21.95 18.63

Net Margin 0.56 1.74 1.71 4.33 4.13 3.83

Asset Turnover 1.78 1.83 1.66 1.58 1.45 1.34


Op. Margin 2.10 3.10 2.30 5.30 5.18 5.28

Revenue Growth 20.25 27.08 30.80 30.93 20.45 16.52

Op. Income Growth 1154.49 87.46 -1.91 202.51 17.07 2.11

EPS Growth - 292.00 25.51 227.48 13.44 34.03




Next Year 50.58 26.30

Past 5 Years 112.80 10.20

Next 5 Years 26.00 22.80


Ratio 2015 2016 2017 2018 2019

P/E 951.96 171.60 297.58 84.10 81.87 Return ROE P/B 25.61 20.12 22.96 18.85 16.28 eBay Inc. (EBAY) 30.64 39.03

P/S 3.18 2.83 3.56 3.39 3.50 Alibaba Group Holding LTD(BABA) 54.74 20.42

P/FCF 32.56 24.76 35.32 28.10 26.27 Etsy Inc. (ETSY) -6.87 23.75

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The TJX Companies, Inc. (NYSE: TJX)

Market Cap:

73.47B

Sector:

Consumer

Discretionary

Industry:

Multiline Retail

Stock Type:

Large Core

Current Price:

$61.06

Fair Value:

$73.40

Holding Return:

12.59%

52 Week Range:

$43.80-$61.69

Business Summary

The TJX Companies, Inc. was founded in 1956 and is headquartered in

Framingham, Massachusetts. The company is broken into four segments:

Marmaxx, HomeGoods, TJX Canada, and TJX International. Through these

segments, TJX Companies offers a variety of apparel for the entire family,

including footwear and accessories; home fashions, including home

basics, furniture, decorative accessories, and cookware; jewelry and other

merchandise. The company operates 4,300 stores in 9 different

countries under the names TJ Maxx, Marshalls, HomeGoods, Winners,

HomeSense, T.K. Maxx and Sierra Trading Post. Furthermore, TJK

Companies also operates various e-commerce sites including tjmaxx.com,

tkmaxx.com, and sierratradingpost.com.


TJX Companies’ ability to offer brand

name apparel items at lower costs

than its competitors allows

consumers to continue to buy TJX’s

merchandise even if discretionary

income decreases, while remaining

competitive when discretionary

income increases.

The international and e-commerce

presence that TJX has established

allows for diversification of the

revenue the company receives,

enabling it to be more competitive

and defensive in the retail industry.

TJX’s diversified product range,

affordable pricing, and the various

store brands it operates allows for a

wide range of customers to

continually return to one or more of

the six store brands.


2019

Total Return 4.57 7.35 3.36 19.97 38.46 30.99

ROA 20.77 20.13 18.85 19.36 21.56 9.97

ROE 52.16 53.15 52.13 54.00 60.01 30.9

Net Margin 7.62 7.36 6.93 7.27 7.85 4.33

Asset Turnover 2.73 2.74 2.72 2.66 2.75 1.45


Op. Margin 12.40 11.97 11.60 11.12 10.82 7.52

Revenue Growth 6.04 6.42 7.23 8.08 8.67 8.4

Op. Income Growth 3.65 2.72 3.91 3.58 5.79 -0.98

EPS Growth 7.14 6.34 2.90 16.95 18.36 4.33



Current Year 3.00 -1.90

Next Year 10.18 13.50

Past 5 Years 11.40 15.10

Next 5 Years 10.50 10.00


Ratio 2015 2016 2017 2018 2019

P/E 21.62 22.03 20.66 18.34 24.04 Return ROE P/B 10.91 11.31 10.41 10.50 13.26 Macy’s, Inc. (M) -37.84 18.30

P/S 1.61 1.54 1.45 1.46 1.85 Ross Stores, Inc. (ROST) 41.15 49.96

P/FCF 17.19 14.92 14.56 15.86 21.61 Burlington Stores, Inc. (BURL) 40.18 202.5

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CONSUMER STAPLES-OVERWEIGHT

Sector Overview

Food & Staples Retailing: The Food and Staples Retailing Industry

in the Consumer Staples Sector includes Drug Retail, Food

Distributors, Food Retail, and Hypermarkets & Super Centers.

Food Products: The Food Products Industry in the Consumer

Staples Sector includes Agricultural Products and Packaged Foods

& Meats.

Household Products: The Household Products Industry in the

Consumer Staples Sector includes producers of non-durable

household products (including detergents, soaps, diapers, and

other tissue and household paper products not classified in the

Paper Products Industry).

Personal Products: The Personal Products Industry in the

Consumer Staples Sector includes manufacturers of personal and

beauty care products (including cosmetics and perfumes).

Tobacco: The Tobacco Industry in the Consumer Staples Sector

includes manufacturers of cigarettes and other tobacco products.

The Consumer Staples Sector tends to perform

relatively well during the late and recessionary

stages of the business cycle. The Consumer Staples

Sector accounts for about 7.21% of the S&P 500

index as of 12/31/2019 (10.57% of the IMP equity

sector). Companies in this sector provide those

goods and services considered essential for typical,

day-to day functions. Given this, competition is

extremely fierce in this sector and companies

compete under cost-leadership and product

differentiation strategies. This sector comprises

many low-price elasticity, red ocean products,

allowing for a very stable (but not remarkable)

growth year-over-year. The following sectors

comprise the Consumer Staples Sector: Beverages,

Food & Staples Retailing, Food Products, Household

Products, Personal Products, and Tobacco.

Beverages: The Beverages Industry in the

Consumer Staples Sector includes Brewers,

Distillers & Vintners, and Soft Drinks.


Sector 27.60% 9.88% 8.31% S&P 500 31.50% 15.26% 11.70%

*Annualized Returns

Anheuser-Busch (NYSE: BUD)

Market Cap:

160.75B

Sector:

Consumer

Staples

Industry:

Beverages –

Wineries &

Distilleries

Stock Type:

Large

Value

Current Price:

$82.04

Fair Value:

$70.54

Holding Return:

4.86%

52 Week Range:

$64.98-$102.69

Business Summary

Anheuser-Busch is the world’s largest brewer by volume of alcoholic

beverages, while also producing non-alcoholic beverages. They own over

500 brands (Corona, Stella and Natural Light) and own 28% of the global

market share. The acquisitions of Oriental Brewery and Grupo Modelo

allows them to reach the Asia and Latin America markets. This is an

established company, and its products can be found in almost any bar

around the world. Anheuser-Busch experienced a change in executive

leadership late 2019 and with that brought uncertainty in the direction

the company was going.


Consumer Staples is a non-cyclical

sector that provides stability to a

portfolio through economic

downturn.

Given their wide range in pricing and

large product offering, Anheuser-

Busch’s ability to capture market

share where competitors can’t, helps

them succeed in this industry.

Trends indicate that local firms

dominate niche product categories in

this industry. Given this, Anheuser-

Busch’s acquisition strategy holds

risk of emerging competition to a

minimum.

Government crackdowns and a lull in

demand for alcoholic beverages in

developed areas, are examples of

the risk affecting the industry.

Emerging markets (which are posting

particularly strong performances) are

places were Anheuser-Busch is

gaining market share.


2019

Total Return 11.29 -15.65 5.80 -41.01 24.66 20.09

ROA 12.12 1.11 6.42 3.71 7.74 9.42

ROE 34.06 4.17 19.54 11.85 22.55 24.44

Net Margin 18.97 2.73 14.17 8.24 17.53 17.42

Asset Turnover 0.27 0.77 0.33 0.24 0.29 0.54


Op. Margin 30.99 28.46 30.73 31.13 30.90 22.94

Revenue Growth -8.86 16.56 24.01 -6.03 -1.34 8.60

Op. Income Growth 76.98 -16.32 33.92 -4.80 -2.07 8.02

EPS Growth -111.69 -698.59 460.56 -45.48 108.76 -



Current Year -32.4 -11.4

Next Year 35.5 5.0

Past 5 Years -7.0 23.72



Ratio 2015 2016 2017 2018 2019

P/E 22.23 136.71 26.65 29.78 17.99 Return ROE P/B 3.33 1.94 2.16 1.55 1.64 Diageo (DEO) 18.8 0.0 P/S 4.25 3.65 3.81 2.45 3.13 Brown-Forman (BF.B) 42.1 50.6 P/FCF 14.51 26.92 15.78 11.93 13.85 Ambev S.A (ABEV) 18.9 18.4

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https://www.macrotrends.net/stocks/charts/DEO/diageo/eps-earnings-per-share-diluted

https://www.macrotrends.net/stocks/charts/BF.B/brown-forman/roe

https://www.macrotrends.net/stocks/charts/ABEV/ambev-sa/eps-earnings-per-share-diluted


Coca-Cola (NYSE: KO)

Market Cap:

236.91B

Sector:

Consumer

Staples

Industry:

Beverages –

Soft Drinks

Stock Type:

Large

Core

Current Price:

$55.35

Fair Value:

$55.00

Holding Return:

107.95%

52 Week Range:

$44.41-$55.91

Business Summary

The Coca-Cola Company is the largest nonalcoholic beverage company in

the world, with over $30 billion in annual revenue. Its portfolio includes a

variety of carbonated and noncarbonated brands, including Coca-Cola,

Diet Coke, Fanta, Sprite, Minute Maid, PowerAde, and Dasani. The firm

has both concentrate and finished product operations, with concentrate

sales contributing roughly half of its revenues. Trademark Coca-Cola

contributes 45% of unit case volumes worldwide and generates the

majority of its revenue outside of the United States. The company is a

defensive stock during times of downturn. Their brand is highly

recognized, and their product is sold in more than 200 countries

worldwide (58 billion servings consumed per day).


Coca-Cola’s investments in

distribution agreements, including its

relationship with Monster Beverage,

is evidence of the value of its strong

retail relationships; suggesting that

its growth and sales will be stable

into the future and resistant to

downturns in the market.

Sparkling soft drinks account for

more than 60% of the firm's volume

in the U.S., (where per capita soda

consumption has been falling for the

last decade). This represents a

threat to the soft-drink industry.

A large portion of sales stem from

restaurants, bars and similar

venues. This could pose a risk if

these businesses were shut down for

an extended period of time.

Also, with the acquisition of Costa,

there is potential for Coca-Cola to

expand Costa's coffee brands into

the ready-to-drink market and across

a wider range of geographies.


2019

Total Return 1.75 -3.49 10.66 3.2 16.9 20.09

ROA 8.07 7.36 1.42 7.52 10.5 9.42

ROE 26.31 26.85 6.22 37.79 49.61 24.44

Net Margin 16.60 15.59 3.52 20.20 23.90 17.42

Asset Turnover 0.49 0.47 0.41 0.40 0.44 0.54


Op. Margin 23.21 23.40 26.03 29.83 28.26 22.94

Revenue Growth -3.70 -5.31 -15.46 -2.40 9.17 8.60

Op. Income Growth -10.09 -1.17 10.42 18.01 10.21 8.02

EPS Growth 4.38 -10.78 -80.54 417.24 38.00 -




Next Year 8.10 5.0

Past 5 Years 1.91 23.72



Ratio 2014 2015 2016 2017 2018

P/E 23.5 27.4 25.1 44.1 64.9 Return ROE P/B 5.5 7.1 6.8 8.8 11.1 PepsiCo Inc (PEP) 23.71 17.59

P/S 4.1 4.2 4.3 5.3 6.3 Keurig Dr Pepper Inc(KDP) 12.91 37.19

P/FCF 17.4 17.2 20.5 24.9 29.4 Monster Beverage Co(MNST) 29.11 30.73

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Procter & Gamble (NYSE: PG)

Market Cap:

308.43B

Sector:

Consumer

Staples

Industry:

Household &

Personal

Products

Stock Type:

Large

Value

Current Price:

$124.90

Fair Value:

$120.00

Holding Return:

146.80%

52 Week Range:

$89.08-$126.59

Business Summary

Procter & Gamble is the world's largest consumer product manufacturer.

In essence, when talking about Consumer Staples, or consumer non-

cyclical, Procter and Gamble is one of those companies you can’t neglect

to mention. With a lineup of brands including Tide laundry detergent,

Charmin toilet paper, Pantene shampoo, and Pampers diapers, it’s easy

to see why this company is firmly entrenched in the Consumer Staples

Sector. Their products are those you simply can’t go without, and their

sales reflect this. In fact, their 21 brands generate more than $1 billion in

annual global sales, with about 55% of that coming from outside the

United States.


P&G, given its status, remains

competitive due to its ability to cuts

costs year-over-year (mostly due to

its experience and economies of

scale). This helps to form an

economic moat that helps solidify

P&G’s success in the industry.

P&G has increased its core earnings

by 4 times the level of sales in

emerging markets in fiscal 2014, but

this expanded to 8 times sales

during the past several years –

representing good company

management and position in the

market, which we expect to lead to

future success in the future.

Foreign exchange volatility and

threat of local peers (in emerging

markets) hampers P&G's profits,

given its distribution channels and

prevalence in the world market.

While significant, this threat can be

remedied by furthering cost-cutting

efforts.


2019

Total Return -9.93 9.24 12.53 3.14 35.88 47.40

ROA 4.95 7.99 12.18 7.95 4.83 4.21

ROE 10.47 17.43 27.30 17.98 11.02 14.10

Net Margin 8.88 15.70 23.18 14.19 8.46 5.78

Asset Turnover 0.56 0.51 0.53 0.56 0.54 0.73


Op. Margin 18.12 20.58 21.45 20.52 11.68 12.46

Revenue Growth -8.17 -14.39 -0.37 2.73 15.93 10.10

Op. Income Growth -9.62 -2.73 3.82 -1.75 36.37 -35.98

EPS Growth -39.15 51.23 51.49 -34.35 36.52 -




Next Year 5.4 8.1




Ratio 2015 2016 2017 2018 2019

P/E 25.7 23.8 24.5 24.0 65.6 Return ROE P/B 3.5 3.8 4.3 4.5 5.9 Unilever PLC ADR (UN) 6.8 32.8

P/S 3.1 3.6 3.8 3.6 4.4 Colgate-Palmolive (CL) 15.7 -1,356.1

P/FCF 15.7 16.0 18.6 16.4 10.2 Church & Dwight (CHD) 7.0 23.85

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The Hershey Co. (NYSE:HSY )

Market Cap:

30.69B

Sector:

Consumer

Staples

Industry:

Food

Products

Stock Type:

Large

Value

Current Price:

$146.98

Fair Value:

$150.00

Holding Return:

0.39%

52 Week Range:

$100.80-$162.19

Business Summary

The Hershey Company is a leading confectionary manufacturer that was

founded in 1894 in Derry Township, PA. They control over 45% of the $25

billion domestic chocolate market. Furthermore, they own 80 brands in

80 countries. Their unique taste and product offering creates a loyal

consumer base. Net sales increased every quarter year-over-year in

2019. Revenue continues to grow by about 3% over the past two years as

they expand into different countries. Hershey’s current executive team

has shown the ability to cut cost by moving factories to areas that have

reduced labor cost and expand into markets the company hasn’t had

presence in.


Hershey is a defensive stock in times

of economic downturn. They can be

negatively impacted by such events,

however, the impact tends to be less

significant than other industries and

companies experience.

As the company grows and begins to

expand into foreign nations, taste

and packaging will need to adhere to

cultural differences to remain

competitive.

The implementation of Project Next

Century program (340,000 square

feet addition to their west chocolate

factory) could experience delays and

have more cost than anticipated.

because of this, annual savings

could be less than expected.

Availability of raw materials could

have a negative effect of supply

chain when disrupted, leading to less

than desirable future financial

results.


2019

Total Return -14.11 15.86 9.75 -5.58 37.13 20.56

ROA 9.25 12.95 14.28 15.56 14.25 4.29

ROE 45.59 84.11 89.85 100.04 69.48 11.03

Net Margin 6.94 9.68 10.42 15.12 14.39 4.74

Asset Turnover 0.50 0.56 0.60 0.60 0.65 0.91


Op. Margin 14.04 16.88 17.46 20.84 19.99 6.75

Revenue Growth -1.48 0.73 1.01 3.67 2.51 9.89

Op. Income Growth -23.38 -0.09 4.80 -0.02 1.98 -2.06

EPS Growth -37.69 11.22 9.58 52.46 -2.15 -




Next Year 5.8 7.0




Ratio 2015 2016 2017 2018 2019

P/E 35.59 29.15 29.97 19.08 26.97 Return ROE P/B 17.02 25.04 24.83 15.84 17.55 Tootsie Roll Industries (TR) 2.2 8.8

P/S 2.46 2.83 3.12 2.88 3.88 Simply Good Foods (SMPL) 51.0 3.0

P/FCF 10.13 13.76 12.14 8.04 10.43 HOSTESS BRANDS (TWNK) 32.9 4.0

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https://www.macrotrends.net/stocks/charts/TWNK/hostess-brands/stock-price-history

ENERGY-UNDERWEIGHT

Sector Overview

Oil, Gas & Consumables: This industry consists of five sub-industries;

integrated oil and gas, oil and gas exploration and production, oil and

gas refining and marketing, oil and gas storage and transportation,

and coal and consumable fuels. The first sub-industry, integrated oil

and gas, consists of companies that conduct exploration and

production of oil and gas and participate in one or more of the

following activities; refining, marketing, transportation, or chemical

manufacturing. The second sub-industry, oil and gas exploration and

production, include the companies that operate by exploring for and

producing oil and gas and do not fall into any of the other sub-

industries. The third sub-industry, oil and gas refining and marketing,

consists of those companies in the sector that refine and market oil

and gas for sale. However, these companies do not necessarily

conduct exploration of oil and gas operations as well as production of

oil and gas. The fourth sub-industry, oil and gas storage and

transportation, is made up of companies that transport/store oil and

gas but do not necessarily produce oil and gas. Pipelines and

shipping services fall into this sub-industry. The fifth sub-industry,

coal and consumable fuels, includes companies that produce and

mine coal, coal related products, as well as other consumable fuels.

This sub-industry does not have companies that produce industrial

gases or mine for coking coal fall within its scope.

The Energy sector is comprised of companies that

produce and refine oil and gas-based products.

Energy companies do not distribute gas as a utility,

rather they conduct drilling, exploration, refinement,

production transportation and storage operations of

gas, oil, and similar consumable fuels. This sector

also includes the manufacturing companies that

produce the drilling equipment for the various

operations conducted in the sector. Energy

securities have historically outperformed the market

in mature stages of the business cycle.

Energy Equipment & Services: This Industry consists

of two sub-industries. The first is, oil and gas drilling.

This sub-industry includes the companies that own

the drills and the contracts for the various drilling

services such as drilling wells. The second sub-

industry is oil and gas equipment and services. This

second sub industry includes the companies that

produce the equipment for the sector. This industry

produces the equipment and services for the

exploration, drilling and production of oil and gas in

the industry. The equipment includes the drills and

rigs for operations of the sector.


Sector 11.80% -3.22% -1.84% S&P 500 31.50% 15.26% 11.70%

*Annualized Returns


TransCanada Corp. (NYSE:TRP )

Market Cap:

50.03B

Sector:

Energy

Industry:

Oil & Gas

Stock Type:

Large

Growth

Current Price:

$53.31

Fair Value:

$55.00

Holding Return:

24.50%

52 Week Range:

$35.18-$53.95

Business Summary

TransCanada Corp is an energy infrastructure company operating out of

North America. The company conducts operations by utilizing liquids

pipelines, energy segments, U.S. natural gas pipelines, as well as

Canadian and Mexican natural gas pipelines. TransCanada transports

natural gas to power plants, distribution companies, industrial facilities,

interconnecting pipelines, and various other businesses. It owns two

pipelines; one private owned 81,500 kilometers and one partially owned

11,100 kilometers. They also own and manage midstream assets that

provide natural gas producer services. TransCanada operates 10 power

generation facilities powered by natural gas and nuclear fuel. Lastly,

TransCanada Corp owns and operates 118 billion cubic feet of

unregulated natural gas storage, as well as liquid pipelines infrastructure

for the transportation of Alberta crude oil supplies .


TC Energy is pushing forward with

plans to build the Keystone XL

Pipeline, a project to move heavy

crude oil from the tar sands region of

Canada to Nebraska, where it will

then move on to refineries in Illinois

and along the Gulf Coast.

Increasing environmental regulations

could hinder new crude pipeline

production. As these regulations

continue to be created and enacted,

TransCanada Corp could experience

set-backs with their designs of

pipelines, requiring a re-work on

designs for more environmentally

friendly designs in the future.

TC Energy approximately has 95% of

EBITDA being derived from regulated

assets or long-term contracts,

ensuring stable revenue.

Limited Canadian Western natural

gas takeaway capacity could cause

future production growth, as well as

the need for more infrastructure, to

be in jeopardy.


2019

Total Return -30.37 43.77 12.07 -22.31 55.69 -8.35

ROA -2.01 0.16 3.44 3.83 4.01 4.38

ROE -8.06 0.72 15.50 15.25 15.25 10.64

Net Margin -10.97 0.99 22.28 25.87 30.00 -

Asset Turnover 0.18 0.16 0.15 0.15 0.13 -

Financial Leverage 4.63 4.34 4.09 3.90 3.71 -

Op. Margin 31.2 35.5 37.5 45.4 43.65 7.88

Revenue Growth 10.95 10.66 7.55 1.71 -5.33 -3.19

Op. Income Growth 7.26 25.72 13.63 23.06 - -

EPS Growth - - - 14.29 8.93 -20.10




Next Year 14.70 15.80




Ratio 2015 2016 2017 2018 2019

P/E 19.1 - 31.3 13.1 16.2 Return ROE P/B 1.9 2.6 2.6 1.9 2.5 Enbridge Inc. (ENB) 28.14 8.87

P/S 2.9 4.3 3.9 3.2 4.6 Pembina Pipeline (PBA) 19.65 10.60

P/FCF 8.7 11.1 9.7 7.4 8.8 Williams Companies

Inc.(WMB) 15.15 6.06

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Cheniere Energy, Inc. (NYSE:LNG )

Market Cap:

15.49B

Sector:

Energy

Industry:

Oil & Gas

Stock Type:

Mid

Growth

Current Price:

$61.07

Fair Value:

$71.00

Holding Return:

-4.56%

52 Week Range:

$57.36-$70.59

Business Summary

Cheniere Energy, Inc. is an international energy company headquartered

in Houston, Texas and is the leading producer of liquified natural gas

(LNG) in the United States. They provide clean, secure, and affordable

energy to the world, while responsibly delivering a reliable, competitive,

and integrated source of LNG, in a safe and rewarding work environment.

Cheniere’s operations, construction and development also support

energy and economic development across the United States. Cheniere is

the second largest LNG operator in the world. In February 2016, Cheniere

became the first company to ship LNG from a commercial facility in the

contiguous United States and now delivers to 3 markets worldwide.

Liquified natural gas is produced through a refrigeration process that

drops the temperature of natural gas down to -260 degrees Fahrenheit,

at which point it converts to liquid and its volume shrinks by 600 times,

enabling global transport in LNG carriers. LNG is non-toxic and non-

flammable. When burned, natural gas emits less carbon than coal and oil,

with significantly less traditional air pollutants. Additionally, all mercury is

removed during the LNG process.


Total U.S. LNG export capacity is

expected to rise to 10.0 billion cubic

feet per day by the end of 2020 and

10.7 billion cubic feet per day (bcfd)

by the end of 2021 from the current

8.5 (bcfd).

Cheniere, the nation's biggest

liquified natural gas (LNG) exporter

and biggest consumer of gas,

completed a project, Midship, which

includes nearly 200 miles (322

kilometers) of 36-inch (91-

centimeter) pipe to be put in service

no later than April 2020.

Cheniere serves as a “middleman”

which purchases natural gas and

then sells it in the liquified form.

Cheniere holds long-term contracts

which removes a lot of risk.

The greatest risk facing Cheniere is

the large capacity for expansion. The

expansion has caused the company

to report losses as they continue to

expand, with fear of loss of cost

controls.


2019

Total Return -47.09 11.22 29.95 9.94 3.18 -8.35

ROA -6.17 -2.86 -1.52 1.57 1.92 4.38

ROE - - - - - 10.64

Net Margin -359.97 -47.54 -7.02 5.90 6.66 -

Asset Turnover 0.02 0.06 0.22 0.27 0.29 -

Financial Leverage - - - - - -

Op. Margin -132.16 3.32 25.23 25.44 24.50 7.88

Revenue Growth - - 336.55 42.6 21.82 -3.19

Op. Income Growth - - - 45.82 16.65 -

EPS Growth -9.99 -10.69 -3.27 3.73 -1.44 -20.10




Next Year 34.90 15.80

Past 5 Years - 9.40



Ratio 2015 2016 2017 2018 2019 P/E - - - 26.78 15.60 Return ROE P/B - - - - - Southwest Gas Holdings Inc(SWX) -10.39 8.80 P/S 31.44 12.12 2.82 1.95 1.72 New Jersey Resources Corp(NJR) -33.19 10.38 P/FCF - - 15.40 7.79 9.95 Chesapeake Utilities Corp(CPK) -7.57 11.32

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FINANCIALS-UNDERWEIGHT

Sector Overview

Consumer Finance: The division of retail banking that deals with lending

money to consumers. This includes wide selection of lines of credit,

such as credit cards, mortgage loans and auto loans. Generally, this type

of bank charges a prime or subprime rate.

Diversified Financial Services: This sector consists of companies that

offer a number of different products and services as to meet the

consumer’s needs. A few services include investment banking, credit

card issuing, and wealth management.

Insurance: An agreement in which an individual or entity acquires a

payment plan which gives them financial protection from unfortunate

events such as financial losses, property and casualty, and liability. The

type of insurance is tied to specific risks which can be costly to the policy

holder. Clients pay a premium for the service and the amount someone

pays depends on the risk level. Interest rates are positively correlated

with insurance company products, meaning that lower rates accounts for

lower sales.

Mortgage REITs: A security vehicle which loans money to owners of real

estate, or individuals who have either acquired an existing mortgage or

mortgage-backed securities. Revenues are produced primarily through

the interest they earn from mortgage loans.

Thrift & Mortgage Finance: These types of financial institutions refer to

credit unions and mutual savings banks who offer saving and loaning

services. The sector differs in the manner that institutions can borrow

funds from the Federal Home Loan Bank System.

In 2019, the financial sector saw a 32.1% return,

which led to investor portfolio earnings increasing

heavily. Rebounding from a poor 2018 return, the

financial sector slightly outperformed the S&P 500.

Additionally, the financial sector does not typically have

a clear pattern when the economy is in the late stage

of its life cycle.

Banks: The banking sector is the section of the

economy devoted to holding financial assets for others,

investing those financial assets as leverage to create

more wealth. It’s also regulated by government

agencies. After the housing market crash in 2008, we

saw tighter restrictions on large banks with the passing

of the Dodd-Frank Act in 2010. Historically, as the

economy enters the late stage of the business cycle,

the banking sector generally performs somewhat

poorly.

Capital Markets: This method of operation pertains to

the activities of gathering funds from parties, then

lending the capital earned to other parties who need

the additional cash flow. The main function is to

optimize the efficiency of transactions and to avoid

needing legal involvement.


Sector 32.10% 11.99% 11.18% S&P 500 31.50% 15.26% 11.70%

*Annualized Returns

Bank of America (NYSE: BAC)

Market Cap:

311.21B

Sector:

Financial

Services

Industry:

Banks - Global

Stock Type:

Large

Value

Current Price:

$35.22

Fair Value:

$35.00

Holding Return:

72.50%

52 Week Range:

$24.01-$35.72

Business Summary

Bank of America ranks as one of the top four financial institutions in the

United States, with more than $2.3 trillion in assets. The firm is

segmented into four categories: consumer banking, global banking,

global wealth and investment management, and global markets. Bank of

America's business-to-consumer transactions include deposits,

residential mortgages, credit and debit cards, and small-business

services. The subsidiaries, Merrill Lynch and U.S. Trust private bank,

offers different brokerage and wealth management services to clients.

Looking at their commercial ties, Bank of America incorporates

investment banking, corporate real estate lending, and capital markets

operations.


Bank of America has emphasized

their preparedness for another

economic downturn. The firm has

been updating their risk

management systems and improving

their capital ratios in recent years.

The financial institution has

maintained among the top four

credit card issuers in the United

States and has boosted their

commercial banking services

through their beneficial acquisition

of Merrill Lynch.

Online banking is identified as the

next step for the industry. Digital

competitors are beginning to lure

customers away from the traditional

sense of operations (physical

branches). Bank of America

retention of customers should drop

along with its peers (Wells Fargo,

Chase, BB&T)


2019

Total Return -4.81 32.80 35.34 -14.70 45.62 29.34

ROA 0.68 0.75 0.74 1.15 1.09 0.68

ROE 6.29 6.82 6.83 10.95 10.73 6.04

Net Margin 17.51 19.38 19.02 29.26 28.49 19.00

Asset Turnover 0.04 0.04 0.04 0.04 0.04 0.04


Op. Margin 30.46 34.35 37.33 41.49 25.71 19.73

Revenue Growth -1.05 1.77 4.36 4.46 -0.01 8.66

Op. Income Growth -41.44 24.87 16.75 18.39 -5.29 -40.12

EPS Growth 263.89 14.50 4.00 67.31 5.36 8.50




Next Year 6.27 7.90

Past 5 Years 26.10 11.40



Ratio 2015 2016 2017 2018 2019

P/E 12.50 16.00 16.90 11.70 13.00 Return ROE P/B 0.70 0.90 1.20 1.00 1.27 Citigroup Inc. (C) 53.46 10.29

P/S 2.30 3.00 3.70 2.90 3.71 Toronto-Dominion

Bank(TD)

12.59 14.64

P/FCF 10.00 7.70 35.50 5.50 6.74 Wells Fargo & Co.(WFC) 17.01 10.60

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Capital One Financial Corporation (NYSE: COF )

Market Cap:

46.98B

Sector:

Financial

Services

Industry:

Consumer

Finance

Stock Type:

Large Value

Current Price:

$102.91

Fair Value:

$70.00

Holding Return:

9.24%

52 Week Range:

$74.39-$105.70

Business Summary

Capital One Financial Corporation is a diversified banking company that

treats their consumers as their top priority. They typically operate in

consumer finance, with a focus in local banking and national lending.

Capital One is known for offering personal credit cards, investment

products, loans and online banking services. Located in Virginia, Capital

One’s client based, creative financial solutions have allowed them to

accumulate the eleventh most assets of any bank in the United States.


Upon our purchase of Capital One

Financial Corporation, the company

declared a $0.40/share dividend

payout.

Changes in payment patterns poses

a risk to Captial One, as well as

instability in the financial market.

Both factors greatly affect the

liquidity and profitability of the

company

Amid the recent coronavirus

pandemic, Captial One offered relief

to their credit card holders who are

facing financial hardship. This has

improved their brand image while

also committing to retaining clients

through the recent deprivation


2019

Total Return -12.56 20.86 14.14 -24.09 36.26 32.85

ROA 1.20 1.02 0.47 1.55 1.36 3.97

ROE 8.39 7.41 3.54 11.37 9.47 26.97

Net Margin 17.10 14.25 6.49 21.01 18.66 29.17

Asset Turnover 0.07 0.07 0.07 0.07 0.07 0.14


Op. Margin 23.49 19.93 18.31 22.60 20.36 44.59

Revenue Growth 6.69 7.72 6.49 3.53 2.42 -29.33

Op. Income Growth -10.47 -7.24 0.15 33.25 -6.07 21.99

EPS Growth -8.09 -8.18 -49.35 238.68 -6.51 -16.03




Next Year 8.29 8.90

Past 5 Years 10.10 10.50

Next 5 Years 9.00 11.30


Ratio 2015 2016 2017 2018 2019

P/E 10.15 12.43 13.91 10.20 9.13 Return ROE P/B 0.80 0.87 0.96 0.70 0.81 JP Morgan & Chase (JPM) 42.80 14.07

P/S 2.25 1.80 1.87 1.88 1.36 Discover Financial (DFS) 44.32 25.73

P/FCF 1.54 1.40 1.49 1.34 1.18 American Express (AXP) 31.34 29.80

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Visa, Inc. (NYSE: V)

Market Cap:

416.79B

Sector:

Financial

Services

Industry:

Credit Services

Stock Type:

Large

Growth

Current Price:

$187.90

Fair Value:

$150.00

Holding Return:

187.31%

52 Week Range:

$127.88-$189.89

Business Summary

Visa incorporates a global payment network that links financial

institutions in over 200 countries. Visa’s credit technology has the ability

to notify banks of an electronic payment, then provides an instant

approval/decline decision for the transaction. The firm’s clients include

card-issuing banks, businesses, and consumers, which creates a

network. Visa’s main source of revenue is earned by charging fees to

customers based on both the dollar volume of card activity and the

amount of transactions processed. In addition, the company provides

products such as digital wallets, risk management services, and

tokenization.


Visa has shown strength as it

continues to hold one of the highest

operating margins in the industry.

With their elite knowledge of the

electronic payment marketplace, the

company has begun merging their

separate branches into one global

platform to reduce operating costs.

This will allow the company to

generate a greater return.

Historically, net margins tighten in

the late stage of the business cycle

due to lowered consumer activity.

However, as e-commerce continues

to grow, consumer card usage in

those transactions is likely to ease

the traditional expectation of

tightening margins.

The financial institution has

partnered with some of the largest

retailers in the Asia-Pacific market,

which is expected to boost their

revenues in the future, which in turn

increases total return.


2019

Total Return 19.07 1.36 47.03 16.49 26.72 32.85

ROA 16.02 11.37 9.80 14.49 17.04 3.97

ROE 22.05 20.79 23.76 35.65 41.83 26.97

Net Margin 45.48 39.31 35.23 48.24 52.57 29.17

Asset Turnover 0.35 0.29 0.28 0.30 0..32 0.14


Op. Margin 65.30 64.70 66.20 62.90 67.03 44.59

Revenue Growth 9.27 8.66 21.72 12.26 11.49 -29.33

Op. Income Growth 17.76 7.68 24.43 6.67 15.8 21.99

EPS Growth 19.72 -3.88 12.90 57.94 20.1 -16.03




Next Year 19.24 19.10

Past 5 Years 19.00 12.30

Next 5 Years 14.70 15.00


Ratio 2015 2016 2017 2018 2019

P/E 30.06 31.46 40.72 29.85 35.32 Return ROE P/B 6.24 6.84 9.71 10.48 14.26 eBay Inc. (EBAY) 29.00 29.17

P/S 13.73 12.49 14.88 14.91 18.58 Mastercard Inc. (MA) 57.58 141.43

P/FCF 28.94 33.79 29.66 24.17 33.39 Paypal Holdings Inc.(PYPL) 29.33 15.22

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HEALTHCARE-UNDERWEIGHT

Sector Overview The Biotech Industry is a fast-growing industry with increasing

demand for research and development. With that being said, most

biotech companies are forced on partnering with larger firms to

complete product development, due to high costs and little revenues,

in order to remain competitive.

Health Care Equipment and Supplies: The Health Care Equipment

and Supplies industry in the Health Care Sector includes

manufacturers of Health Care equipment, devices, supplies, and

medical products not classified elsewhere.

Health Care Providers and Services: The Health Care Provider and

Services industry includes distributors and wholesalers of healthcare

products not classified within any other industry.

Life Sciences Tools and Services: The Life Sciences Tools and

Services industry includes companies involved in drug discovery,

development, and production continuum by providing analytical tools,

instruments, consumables and supplies, clinical trial services, and

contract research services.

Health Care Technology: The Health Care Technology Industry in the

Health Care Sector, includes companies providing information

technology services primarily to health care providers. It includes

companies providing application, systems and/or data processing

software, internet-based tools, and IT consulting services to doctors,

hospitals or businesses operating primarily in the Health Care Sector.

During an extremely volatile market, Health Care is

one of the top and most consistent performers.

According to the business cycle, Health Care has

consistently outperformed the S&P 500 in the late

and the recessionary stages. The Health Care sector

consists of six industries: Biotechnology, Health Care

Equipment & Supplies, Health Care Providers &

Services, Health Care Technology, Life Sciences

Tools and Services, and Pharmaceuticals.

Pharmaceutical: The Pharmaceutical industry

focuses on companies that take part in the

research, development, and manufacturing of

pharmaceuticals. Current political climates may

create deregulation, allowing pharmaceutical

companies the ability and the chance to have

increased margins and higher revenue streams. The

economy is heading into the late stage within the

business cycle, in which the industry historically

outperforms the S&P 500.

Biotechnology: The Biotechnology Industry in the

Health Care Sector includes companies that are

engaged in research, development, manufacturing,

and/or marketing of products based on genetic

analysis and genetic engineering.


Sector 20.80% 16.25% 10.32% S&P 500 31.50% 15.26% 11.70%

*Annualized Returns

Amgen, Inc. (NYSE: AMGN)

Market Cap:

142.57B

Sector:

Health Care

Industry:

Biotechnology

Stock Type:

Large

Value

Current Price:

$241.07

Fair Value:

$250.00

Holding Return:

50.04%

52 Week Range:

$166.30-$244.99

Business Summary

Amgen Inc. is a biotechnology medicine company, which discovers,

develops, manufactures, and markets medicine for grievous illnesses

that has presence in approximately 130 countries worldwide. The

company focuses on human therapeutics and concentrates on innovating

novel medicines, based on advances in cellular and molecular biology. It

offers products for the treatment of oncology/hematology, cardiovascular

disease, inflammation, bone health, nephrology, and neuroscience. Most

of Amgen’s opportunity lays in bottom-line growth and operating

efficiency; however, several early-stage oncology trials have the potential

to boost Amgen’s long-term pipeline growth.


Amgen’s pipeline expects future phase 3

productivity with drugs such as the

cholesterol drug Repatha and migraine

drug Aimovig.

Improvements in Amgen’s manufacturing

efficiency will benefit top-end margins, as

well as provide a cost advantage to

mitigate competitors within the biosimilar

euro markets

Amgen’s pipeline gives it several

blockbuster biologic therapies. Amgen’s

intangible assets provide a wide moat and

competitive advantage over its respective

peers


2019

Total Return 3.89 -7.47 22.08 14.98 23.8 10.2

ROA 9.87 10.35 2.51 11.47 12.44 2.46

ROE 25.77 26.65 7.18 44.48 70.73 6.42

Net Margin 32.03 33.59 8.66 35.35 33.57 28.00

Asset Turnover 0.31 0.31 0.29 0.32 0.37 0.31


Op. Margin 39.1 42.6 43.6 43.2 41.4 52.72

Revenue Growth 7.97 6.14 -0.62 3.93 -1.62 5.05

Op. Income Growth 36.81 15.63 1.83 2.91 -5.74 -

EPS Growth 35.22 13.02 -73.73 14.68 2.06 18.12



Current Year 4.39 7.50 Next Year 9.11 5.90 Past 5 Years 10.70 10.00 Next 5 Years 9.50 15.80


Ratio 2015 2016 2017 2018 2019 P/E 19.4 14.6 15.7 14.5 18.5 Return ROE

P/B 4.4 3.5 3.9 8.5 13.0 Roche Holding AG (RHHBY) 35.02 43.93

P/S 5.8 4.9 3.2 5.7 6.4 Gilead Sciences (GILD) 7.88 24.53

P/FCF 13.2 12.8 5.6 12.0 15.2 Johnson & Johnson (JNJ) 13.00 25.36

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Bristol-Myers Squibb (NYSE: BMY)

Market Cap: 143.02B

Sector: Health Care

Industry: Biopharmaceutic

als

Stock Type: Large Value

Current Price: $64.19 Fair Value: $65.00

Holding Return: 14.83% 52 Week Range: $42.48-$64.75

Business Summary

Bristol-Myers Squibb is one of the leading biopharmacuetical companies

operating in the United States. BMY specializes in producing

biopharmaceuticals, also known as biological medical products or

biologic, which is any pharmaceutical drug product manufactured in,

extracted from, or semi synthesized from biological sources. Bristol-Myers

Squibb operates globally, but more than half of 2019 revenue came from

US biopharmaceutical sales. The main diseases of concern for Bristol-

Myers Squibb in which they produce biologics are hematology, oncology,

immunology, cardiovascular disease, and fibrotic disease. Throughout

2019 Bristol-Myers Squibb has amassed more than $26 Billion in

revenue through their expansive distribution channels for new biologic

drugs.


Bristol-Myers Squibb’s acquisition of

Celgene in November of 2019 was

initiated with the goal of creating a

leading biopharmaceuticals company. The

acquisition intends to increase BMY’s

distribution channels for their top

performing drug industries.

Bristol-Myers Squibb’s top performing

drugs, Eliquis and Opdivo, accounted for

$15 billion in revenue in 2019. BMY looks

to expand on the success of their top

performers, which treat common diseases

such as blood clotting and lung cancer.

A major risk factor to Bristol-Myers Squibb

and its biopharmaceutical developments

is loss of exclusivity (LOE). For BMY’s top

performers, Eliqis and Opdivo, their LOE in

the United States is not until 2026 and

2028 respectively, with other drugs LOE

not arriving until as distant as 2029.


2019

Total Return 19.24 -13.50 7.72 -12.91 27.86 13.79

ROA 4.78 13.62 2.99 14.36 4.17 5.44

ROE 10.75 29.28 7.21 38.18 10.48 14.58

Net Margin 9.45 22.94 4.85 21.81 13.15 14.22

Asset Turnover 0.51 0.59 0.62 0.66 0.32 0.43


Op. Margin 10.40 23.40 16.60 22.70 22.60 16.60

Revenue Growth 4.29 17.31 6.94 8.59 15.89 3.03

Op. Income Growth 0.93 162.37 -23.99 48.35 15.53 31.09

EPS Growth -22.50 184.95 -76.98 393.44 -33.22 0.61






P/B 7.6 6.2 6.7 6.2 8.1 AstraZeneca PLC (AZN) 35.65 10.43

P/S 7.0 5.3 5.0 3.9 4.4 Eli Lilly & Co. (LLY) 16.15 133.8

P/FCF 64.3 48.3 18.9 18.4 12.4 Merck & Co Inc. (MRK) 22.26 37.42

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Cerner Corp. (NYSE: CERN)

Market Cap:

22.82B

Sector:

Health Care

Industry:

Health Care

Technology

Stock Type:

Large

Growth

Current Price:

$73.39

Fair Value:

$70.00

Holding Return:

26.06%

52 Week Range:

$50.50-$76.47

Business Summary

Cerner Corp. designs, develops, markets, installs, hosts, and supports

health care information technology, health care devices, hardware, and

content solutions for health care organizations and consumers. It also

provides value-added services, including implementation and training,

remote hosting, operational management services, revenue cycle

services, support, and maintenance, health care data analysis, clinical

process optimization, transaction processing, employer health centers,

employee wellness programs, and third party administrator services for

employer-based health plans. It operates through Domestic and Global

segments. The Domestic segment includes revenue contributions and

expenditures associated with business activity in the United States. The

Global segment includes revenue contributions and expenditures that are

linked to business activity in many different countries around the world.


High switching cost create a narrow

economic moat for Cerner Corp. by limiting

bargaining power for purchasers.

Cerner Corp. integrates out distributors by

internally creating and developing software,

as well as providing software services.

Increasing complexity and know-how of

Medicare reporting, strong upward trends of

value-based pay reimbursement

arrangements, and compliance/regulation of

medical records all increase demand for

health care information technology.

Any errors or malfunctions within the

software pose a gigantic risk for Cerner Corp.

Additionally, IT Infrastructure and software

bears risk to security and privacy of

information.


2019

Total Return -6.94 -21.27 42.26 -22.18 40.00 15.65

ROA 10.69 11.37 14.33 9.56 7.78 11.05

ROE 14.51 16.32 19.90 12.97 11.45 27.35

Net Margin 12.19 13.27 16.86 11.74 9.30 20.36

Asset Turnover 0.88 0.86 0.85 0.81 0.84 0.54


Op. Margin 17.65 18.99 18.68 14.44 10.60 20.58

Revenue Growth 30.05 8.39 7.21 4.36 6.08 21.83

Op. Income Growth 2.37 16.63 5.43 -19.33 -22.47 10.37

EPS Growth 2.67 20.13 38.92 -26.46 -12.70 3.60




Next Year 12.01 21.70

Past 5 Years 8.40 10.40

Next 5 Years 12.50 12.20



P/B 5.4 3.6 4.9 3.4 5.2 McKesson Corp (MCK) 26.73 0.38 P/S 5.1 3.5 4.5 3.3 4.3 Premier Inc. (PINC) 1.42 - P/FCF 25.8 13.9 18.9 12.6 18.6 Veeva Systems Inc. (VEEV) 57.48 21.44

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Johnson & Johnson (JNJ)

Market Cap:

384.00B

Sector:

Health Care

Industry:

Pharmaceutica

ls

Stock Type:

Large

Core

Current Price:

$145.87

Fair Value:

$150.00

Holding Return:

3.30%

52 Week Range:

$125.00-$147.83

Business Summary

Johnson & Johnson is identified as the largest holder of market share in

the healthcare industry. The firm is made up of three different

departments: consumer products, medical devices and diagnostics, and

pharmaceuticals. Johnson & Johnson's drug and device groups equate up

to 80% of sales and is their main driver of cash flows. Looking at the

firm's drug division, it is comprised of the following specialties: cardiology,

immunology, neurology, oncology, pulmonary, and metabolic diseases.

Their device products are primarily directed to orthopedics, surgery tools,

and vision care. The last segment of consumer focuses on beauty, oral

care, baby care, over-the-counter drugs, and women's health. About half

of the firm's total revenue is generated within the United States.


Within the past five years, Johnson &

Johnson has led the drug manufacturing

industry on multiple categories such as ROE,

ROA, and net margin. Members believe these

are attractive features and a reason to hold

onto the stock.

Being the leader in a competitive healthcare

industry, the firm has looked outside the

United States to build a stronger brand

recognition worldwide. The firm currently

operates in 60 countries worldwide and

continues to expand their outreach through

both acquisition and Greenfield investments.

Effective management and resource

allocation has seen the firm consistently

grow their revenue stream each year since

2015 and is widely believed to continue this

trend in the coming years.

Recently the firm has made questionable

acquisitions in terms of Syntheses and

Actelion, which is not expected to create

much value for shareholders as both

companies had a high takeover price relative

to an estimated fair value.


2019 Total Return 1.05 15.23 24.16 -5.10 13.00 13.79

ROA 11.65 12.05 0.87 9.86 9.73 5.44

ROE 21.87 23.37 1.99 25.51 25.36 14.58

Net Margin 21.99 23.01 1.7 18.75 18.42 14.22

Asset Turnover 0.53 0.52 0.51 0.53 0.53 0.43


Op. Margin 25.78 29.40 24.48 24.58 24.50 16.60

Revenue Growth -5.73 2.59 6.34 6.71 0.59 3.03

Op. Income Growth -13.81 17.00 -11.46 7.13 0.15 31.09

EPS Growth -3.86 8.21 -92.07 0 0.36 0.61




Next Year 7.38 5.90




Ratio 2015 2016 2017 2018 2019 P/E 19.7 20.2 24.3 24.9 27.8 Return ROE P/B 4.0 4.3 5.1 5.3 6.6 Roche Holding AG (RHHBY) 35.02 43.93

P/S 4.1 4.5 5.2 4.3 4.8 Gilead Sciences (GILD) 7.88 24.53

P/FCF 15.6 19.0 17.8 16.0 16.9 Amgen Corp (AMGN) 23.8 70.73

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UnitedHealth Group, Inc. (UNH)

Market Cap:

278.69B

Sector:

Health Care

Industry:

Health Care

Providers and

Services

Stock Type:

Large

Growth

Current Price:

$293.98

Fair Value:

$300.00

Holding Return:

400.99%

52 Week Range:

$208.07-$300.00

Business Summary

UnitedHealth Group is known as the largest private health insurance

provider in the United States. Overall, UnitedHealth has captured the lead

in self-directed, employer-sponsored, and government-backed insurance

plans. With the health insurance giant’s unrivaled scale in managed care,

peers are known to struggle with competing against the firm. Medical

benefits are offered to nearly 50 million members across its international

platform. Along with its insurance assets, United's continued investment

behind its Optum franchises has created a healthcare services titan that

covers everything from medical and pharmaceutical benefits, to providing

outpatient care and analytics to both affiliated and third-party customers.


United's integrated strategy, in the eyes of

IMP, has been successful as the U.S.

healthcare system slowly shifts from a fee-

for-service model to a more aligned with the

value and outcomes produced for patients.

Being the leader across multiple sectors,

such as government- and employer-

sponsored insurance programs, ambulatory

care, and health analytics, the firm's revenue

and cash flow stream is less reliant on a

single source than many other areas of the

industry which sees the firm constantly

spending large amounts of resources to

continually improve each sector.

With the firm’s long record of success,

UnitedHealthcare’s current executive team

ranks among some the top tier of leaders in

healthcare services. The management team

has been known for gaining impressive

strategic foresight and has developed the

business into what it is today.


2019 Total Return 3.89 -7.47 22.08 14.98 18.00 24.57

ROA 9.87 10.35 2.51 11.47 8.49 3.16

ROE 25.77 26.65 7.18 44.48 25.32 15.9

Net Margin 32.03 33.59 8.66 35.35 5.76 5.02

Asset Turnover 0.31 0.31 0.29 0.32 .37 0.63

Financial Leverage 2.55 2.60 3.17 5.31 3.02 -

Op. Margin 39.10 42.60 43.60 43.22 7.4 7.01

Revenue Growth 7.97 6.14 -0.62 3.93 6.85 30.94

Op. Income Growth 36.81 15.63 1.83 2.91 11.47 91.99

EPS Growth 35.22 13.02 -73.73 369.15 17.56 -





Ratio 2015 2016 2017 2018 2019

P/E 18.7 23.6 25.1 19.5 21.4 Return ROE

P/B 3.4 4 4.7 4.8 5.1 Cigna (CI) 7.70 11.82

P/S 0.8 0.9 1.1 1.1 1.2 CVS Health Group (CVS) 17.26 10.87

P/FCF 13.2 10.5 14.6 22.9 19.5 Anthem Inc. (ANTM) 16.33 15.95

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INDUSTRIALS-UNDERWEIGHT

Sector Overview Building Materials: The Building Products industry produces building

components, home improvement products, and equipment.

Commercial Services & Supplies: This industry includes companies

providing commercial printing, environmental and facilities services,

office services and supplies, diversified support service, and security

and alarm services.

Construction & Engineering: The Construction & Engineering industry

engages mainly in non-residential construction.

Electrical Equipment: This industry includes companies that produce

electric cables, electrical components or equipment, and

manufacturers of power-generating equipment and other heavy

electrical equipment.

Diversified Industrials: This industry includes diversified industrial

companies with business activities in three or more sectors, none of

which contributes most revenues.

Machinery: The Machinery industry includes manufacturers of

construction, farm and industrial machinery, and heavy trucks.

Marine: The Marine industry include companies providing goods and

passenger maritime transportation.

Historically, the Industrial sector does not have

strong growth in the late stage and underperforms in

the recession stage. As consumers spend less and

save more, this sector stagnates because these

companies do not expand. The Industrials Sector

has a market cap of $3.41 trillion, which consists of

fourteen industries: Aerospace & Defense, Air

Freight & Logistics, Airlines, Building Products,

Commercial Services & Supplies, Construction &

Engineering, Electrical Engagement, Industrial

Conglomerates, Machinery, Marine, Professional

Services, Road & Rail, Trading Companies &

Distributors, and Transportation Infrastructure.

Aerospace & Defense: The Aerospace & Defense

Industry includes manufacturers of civil or military

aerospace and defense equipment, parts, or

products. Historically, this is one of the stronger

performing industries in the Industrial sector.

Air Freight & Logistics: The Air Freight and Logistics

industry includes companies providing air freight

transportation, as well as courier and logistics

services.

Airlines: The Airlines industry includes companies

offering mainly passenger air transportation.

Trading Companies & Distributers: This industry

includes trading companies and other distributors of

individual equipment and products.


Sector 29.40% 10.73% 9.49% S&P 500 31.50% 15.26% 11.70%

*Annualized Returns

Honeywell International, Inc. (NYSE: HON)

Market Cap:

125.86B

Sector:

Industrials

Industry:

Specialty

Industrial

Machinery

Stock Type:

Large Value

Current Price:

$177.00

Fair Value:

$200.00

Holding Return:

-2.55%

52 Week Range:

$129.07-$183.11

Business Summary

Honeywell International, Inc. operates as a diversified technology and

manufacturing company worldwide. The company has operations in the

United States, Europe, Canada, Asia and Latin America. Today, it operates

through four business segments-aerospace, building technologies,

performance materials and technologies, and safety and productivity

solutions. The company is a global leader in refrigerants, aerosols, and

foam-insulation blowing agents that are used to replace ozone-depleting

Chlorofluorocarbon and Hydro Chlorofluorocarbons. These products also

improve the energy efficiency of homes, appliances, and commercial

refrigeration systems


Tariffs, threaten Honeywell’s supply

chain and can impact its cost inputs.

Aerospace segment can have a long

downturn period depending on the

demand for air travel.

Honeywell’s business is split 60/40

between opex and capital

expenditure cycles so they do not

worry as much about the macro

environment.

Rapid changes in technology can

affect the safety and productivity

segment of Honeywell Inc. by

causing diminished returns on

capital projects.


2019

Total Return 5.80 14.74 34.74 -8.61 36.51 8.34

ROA 10.06 9.30 2.92 11.55 10.55 8.07

ROE 26.53 25.54 9.03 38.16 33.50 20.58

Net Margin 12.36 12.24 4.08 16.18 16.73 10.20

Asset Turnover 0.81 0.76 0.71 0.71 0.63 0.78


Op. Margin 17.70 17.00 17.64 16.04 18.66 12.18

Revenue Growth -4.28 1.87 3.13 3.13 -12.18 1.37

Op. Income Growth 17.10 -2.12 7.00 -6.24 2.18 7.98

EPS Growth 13.32 2.65 -65.48 319.63 -6.35 7.25








Ratio 2015 2016 2017 2018 2019

P/E 18.1 18.1 23.2 37.2 20.7 Return ROE

P/B 4.5 4.6 5.5 5.3 7.0 Carlisle Companies

Inc.(CSL)

62.79 18.05

P/S 2.1 2.3 3.0 2.3 3.5 Danaher Corp (DHR) 49.50 10.58

P/FCF 15.6 16.8 20.3 14.2 22.2 ITT Inc. (ITT) 54.34 16.68

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Lockheed Martin (NYSE: LMT)

Market Cap:

109.42B

Sector:

Industrials

Industry:

Aerospace &

Defense

Stock Type:

Large Core

Current Price:

$389.38

Fair Value:

$429.00

Holding Return:

43.32%

52 Week Range:

$256.79-$399.95

Business Summary

Lockheed Martin is the largest defense contractor worldwide and is the

market leader in next-generation fighter aircrafts. The company is

involved in the research, design, development, integration, and

sustainment of advanced technology products and services. The company

provides services in cybersecurity, system integration, logistics, and

engineering. The applications of the services are in defense, civil, or

commercial needs. The company has contracts with the Department of

Defense, Foreign Military Sales, and a small amount of sales with U.S.

commercial and other customers. The company operates in 4 segments

including Aeronautics, Missiles and Fire Control, Raury and Mission

Systems, and Space.


Lockheed has a strong hold on the

market due to the F-35 fighter

program and missile exposure. Their

contracts have a strong barrier to entry

against competitors, ensuring future

sustainability.

The defense budget caps will return in

2020, hitting Lockheed’s growth. Even

if investors see growth in the increase

in budget in 2019, this cap in 2020

can halt the company’s rapid growth

providing a slower, lower return for

investors.

The slower production process for F-35

will restrain growth and tougher

contracts will hurt margins. This can

hurt quarterly earnings, but the

company has stressed the goal in

improving operations in making these

products, enabling higher sales and

potential contracts. As of now, this can

be seen as a short term threat for

investors.


2019

Total Return 15.96 18.22 31.44 -15.89 52.15 7.40

ROA 8.36 10.94 4.24 11.04 13.48 3.82

ROE 110.97 230.12 483.57 1419.4

0

275.60 24.68

Net Margin 7.81 11.22 3.92 9.39 10.42 4.94

Asset Turnover 1.07 0.97 1.08 1.18 1.29 0.77


Op. Margin 12.00 11.91 11.60 13.82 14.29 7.81

Revenue Growth 1.17 2.42 8.04 5.32 11.25 -1.09

Op. Income Growth -2.79 2.08 6.7 23.86 15.01 -37.50

EPS Growth 2.23 52.62 -60.61 155.30 24.79 -6.53





Past 5 Years 14.10 13.20



Ratio 2015 2016 2017 2018 2019

P/E 19.3 18.8 26.0 24.8 18.5 Return ROE

P/B 23.5 31.1 43.7 78.1 28.1 Boeing Co. (BA) 3.56 -70.76

P/S 1.5 1.5 1.9 1.4 1.9 Airbus SE (EADSY) 52.61 -17.35

P/FCF 19.5 13.2 16.5 31.0 13.8 Raytheon Co (RTN) 43.41 13.80

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3M Company (NYSE: MMM)

Market Cap:

101.47B

Sector:

Industrials

Industry:

Specialty

Industrial

Machinery

Stock Type:

Large Value

Current Price:

$176.42

Fair Value:

$186.00

Holding Return:

126.41%

52 Week Range:

$150.58-$219.75

Business Summary

3M Company was founded in 1902 and has its headquarters in

Minnesota. 3M has a global presence in diversified technology and its

product segments are safety, graphics, health care, electronics, energy,

and consumer. 3M has a strong emphasis on product development and

research and development among their segments. Each segment,

utilizing similar technology enabling efficient sharing of business

resources. Most of 3M’s revenues are from outside of the United States.

The company employs 96,163 people.


3M has a strong product portfolio,

adding value to the consumers.

These products are created through

intense research & development,

making it difficult for competitors to

recreate. This is evidence the

company will continue innovating,

remaining a top competitor for the

future.

Historical data shows for every dollar

put into R&D, the company will make

$9, which is much higher compared

to its peers. Historically, the

company also puts more capital into

research and development; if these

trends continue, the competitors will

be forced to play catch up with 3M,

making 3M a strong investment

choice.

The company may show a lack of

growth during the upcoming

recessionary phase since it is an

Industrial security. However, 3M has

products in Health Care to hedge

against this risk. This hedge allows

the stock to potentially grow even in

the market downturns.


2019

Total Return -5.83 21.49 34.44 -16.74 -4.39 8.34

ROA 15.11 15.39 13.71 14.36 11.26 8.07

ROE 38.95 45.90 44.44 50.09 46.02 20.58

Net Margin 15.96 16.77 15.35 16.33 14.22 10.20

Asset Turnover 0.95 0.92 0.89 0.88 0.79 0.78


Op. Margin 22.9 24.0 22.9 20.3 18.9 12.18

Revenue Growth -4.86 -0.55 5.14 3.50 -1.92 1.37

Op. Income Growth -2.65 3.99 0.15 -7.93 -9.01

7.98

EPS Growth 1.20 7.65 -2.82 12.11 -12.15 7.25








Ratio 2015 2016 2017 2018 2019

P/E 19.5 22.5 26.2 25.5 20.9 Return ROE

P/B 7.5 8.9 11.5 10.7 9.5 Honeywell Int. (HON) 36.51 33.50

P/S 3.2 3.7 4.7 3.5 3.2 Siemens AG ADR (SIEGY) 19.73 11.06

P/FCF 15.5 16.3 21.9 19.2 14.8 General Electric Co (GE) 50.07 -18.35

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INFORMATION TECHNOLOGY-OVERWEIGHT

Sector Overview

IT Services: The IT Services industry includes providers of information

technology and systems integration services not classified in the data

processing and outsourced services or internet software and services

industries. It includes information technology consulting, information

management services, and providers of commercial electronic data

processing and/or business process outsourcing services such as

back-office automation.

Technology Hardware, Storage & Peripherals: This includes

manufacturers of cell phones, personal computers, servers,

electronic computer components and peripherals. These extend to

data storage components, motherboards, audio and video cards,

monitors, keyboards, printers and other peripherals.

Semiconductors & Equipment: This includes manufacturers of

semiconductors and related products. Semiconductors and their

equipment are used in IT as the essential portions of most electronic

circuits and are commonly made from silicon, hence the name Silicon

Valley.

Software: The software industry includes applications, home systems,

and home entertainment software companies that engage in

developing and producing software designed for specialized

applications for the business and/or consumer market.

Information Technology has emerged over the last

two decades as a high growth innovative area in the

market. Relatively young, IT contains multiple

industries highlighted below which encompass the

various facets that play a role in the global sharing

of information. IT has become a vital piece of sector

allocation even for the S&P 500, which many funds

and investors have traditionally sought to mimic and

compete. Looking back at the Great Recession, IT

was the fastest sector to recover, posting

extraordinary annual returns for the better part of

the last decade.

Communications Equipment: This industry is

comprised of producers of the equipment and

products in communications. These items are

known as Local Area Networks, Wide Area Network,

routers, switchboards, and telephones.

Internet Software & Services: The software and

services industry involves companies that develop

and market internet software and and/or provide

internet services. These services include web

address registration services, database

construction, internet design, online databases, and

interactive services.


Sector 50.30% 27.65% 20.20% S&P 500 31.50% 15.26% 11.70%

*Annualized Returns

Apple, Inc. (NASDAQ: AAPL)

Market Cap:

1.288T

Sector:

Information

Technology

Industry:

Consumer

Electronics

Stock Type:

Large

Core

Current Price:

$293.65

Fair Value:

$315.00

Holding Return:

1061.33%

52 Week Range:

$142.00-$293.97

Business Summary

Apple Inc. designs consumer electronic devices which consists of

smartphones (IPhone), computers (Mac), tablets (IPad), smartwatches

(Apple Watch), and streaming technology (Apple TV). Apple has also

continued to develop their services to contribute to the diversification of

revenue source. Their services include Apple Pay, iCloud and AppleCare.

Apple integrates devices with software and services to provide one of the

strongest brand ecosystems in the world. Apple has been recognized as a

leading pioneer in the Information Technology sector that shapes

consumer interaction with the latest technological advancements.


Apple has strong brand loyalty

focused around the “Apple

Ecosystem”, which makes entry easy

and exit difficult. This provides

sharper stability in generating cash

flows.

Market saturation for Apple’s

products have been seen recently

with the rapid influx of other

products in the market.

Economic and political turmoil has

become a threat to negatively affect

Apple’s supply chains, and likewise,

their overall revenue stream.


2019

Total Return -2.08 12.15 48.24 -5.12 88.97 42.54

ROA 20.45 14.93 13.87 16.07 15.69 11.36

ROE 46.25 36.09 36.87 49.36 55.92 55.03

Net Margin 22.58 21.19 21.09 22.41 21.24 15.45

Asset Turnover 0.89 0.70 0.66 0.72 0.74 0.80


Op. Margin 30.48 27.84 26.76 26.69 24.57 17.09

Revenue Growth 27.86 -7.73 6.30 15.86 -2.04 0.24

Op. Income Growth 35.67 -15.73 2.20 15.57 11.38 -4.39

EPS Growth 42.95 -9.87 10.83 29.32 -0.17 -1.86




Next Year 24.74 14.60

Past 5 Years 10.70 -1.90

Next 5 Years 10.70 12.60


Ratio 2015 2016 2017 2018 2019

P/E 11.4 13.9 18.4 13.2 24.70 Return ROE P/B 4.89 4.75 6.42 6.96 14.23 Microsoft Corp. (MSFT) 57.57 42.21

P/S 2.61 2.95 3.88 2.97 5.25 Alphabet Inc. (GOOGL) 28.18 18.12

P/FCF 7.5 9.7 14.0 10.2 19.67 Samsung Electronics - 5.46

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Accenture PLC Class A (NYSE: ACN)

Market Cap:

133.85B

Sector:

Information

Technology

Industry:

IT Services

Stock Type:

Large

Growth

Current Price:

$210.57

Fair Value:

$200.00

Holding Return:

164.73%

52 Week Range:

$135.58-$213.25

Business Summary

Accenture PLC is one of the world’s leading professional services

companies providing services such as management consulting,

technology services, and outsourcing. Accenture operates in North

America, Europe, and Emerging Market countries totaling over 120 total.

Accenture conducts their business with over 80% of Global Fortune 500

companies. This advanced network of insight provides a competitive

advantage in Accenture’s business structure. Though the company’s

business operations and structure classify the company as an

information technology firm, they provide insights and solutions for firms

across all GICS sectors from financials to healthcare. Accenture’s main

practice is to develop industry-specific solutions to enhance and ensure

the efficiency of business practices to produce better results.


Accenture works with primarily

Fortune 500 companies that depend

on Accenture’s services, providing

stable revenue streams for future

years.

Accenture’s dominate market share,

the nature of its services, and the

extensive industry knowledge

needed generates high switching

costs for their competitors.

Outsourcing services, a segment

where ACN is the leader, are

estimated to continue to increase in

future years and is an essential

factor to the company’s outlook on

future revenue growth.

Accenture has proven to deliver on

their clientele’s needs as 97% of

their top revenue generating clients

have been with the company for 10+

years. That figure jumps to 99% for

the past 5 years.


2019

Total Return 19.4 14.3 32.9 -6.1 51.21 11.88

ROA 16.9 21.2 15.9 17.2 17.62 14.99

ROE 51.5 60.1 41.8 42.0 38.58 34.26

Net Margin 9.3 11.8 9.4 9.8 11.06 12.85

Asset Turnover 1.82 1.79 1.70 1.77 1.59 1.17


Op. Margin 13.48 13.82 12.60 14.04 14.59 16.22

Revenue Growth 3.26 5.72 5.66 13.16 3.87 0.00

Op. Income Growth 3.58 8.44 -3.70 26.09 7.94 8.94

EPS Growth 5.31 35.50 -15.66 16.54 16.09 17.89





Past 5 Years 10.20 8.30

Next 5 Years 10.00 13.00


Ratio 2015 2016 2017 2018 2019

P/E 22.0 17.4 27.1 21.6 28.11 Return ROE

P/B 11.5 10.2 10.7 7.4 8.82 IBM Corp. (IBM) 23.57 50.1

P/S 2.1 2.2 2.7 2.2 3.11 Cognizant Tech. Solutions

(CTSH)

-1.08 16.4

P/FCF 18.5 15.6 20.6 15.2 21.42 Infosys Ltd ADR (INFY) 11.91 22.7

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Cisco Systems, Inc. (NASDAQ: CSCO)

Market Cap:

203.46B

Sector:

Information

Technology

Industry:

Communication

Equipment

Stock Type:

Large

Value

Current Price:

$47.96

Fair Value:

$49.00

Holding Return:

156.75%

52 Week Range:

$40.95-$58.25

Business Summary

Cisco Systems Inc. is the largest software and hardware supplier in the

networking solutions industry in the world. The company offers

infrastructure platforms of hardware and software for switching, routing,

data center, and wireless applications. In its applications, Cisco offers

collaboration, analytics, and Internet of Things products. Additionally,

their security segment offers Cisco’s firewall and software defined

product, plus hardware to accompany it. Cisco is focused on its software

and services divisions to generate an increase in subscriptions and

recurring sales. While hardware is usually a non-recurring type of sale, it

still accounts for a portion of overall revenue. The company sells its

products directly to customers, as well as through channel partners.


Cisco provides hardware products

that are complimented by various

software and network services

through subscriptions, which provide

re-occurring and steady revenue

streams.

Cisco has historically held roughly

50% of market share in

infrastructure platforms, providing

stable and leading performance for

their top line business performance.

Cisco is challenged by an industry

trend of Cloud-based operations and

declining market share in their

business segments by leading

competitors.

Declining market share for network

services and applications as

consumers start to adopt newer and

more advanced platforms.


2019

Total Return 0.6 14.9 30.5 15.6 13.82 -14.24

ROA 8.2 9.1 7.6 0.1 11.25 10.7

ROE 15.4 17.4 14.8 0.2 30.27 28.14

Net Margin 18.3 21.8 20.0 0.2 22.39 18.79

Asset Turnover 0.45 0.42 0.38 0.41 0.50 0.57


Op. Margin 22.9 26.3 26.5 25.7 28.02 23.61

Revenue Growth 4.28 0.17 -2.52 2.76 5.22 0.98

Op. Income Growth 15.27 14.87 -1.54 -0.49 14.79 4.86

EPS Growth 17.45 20.57 -9.95 -98.95 129.50 6.05








Ratio 2015 2016 2017 2018 2019

P/E 14.5 14.5 20.0 138.9 19.03 Return ROE P/B 2.3 2.4 2.9 4.4 5.91 Nokia Oyj (NOK) -34.92 0.05 P/S 2.8 3.1 4.0 4.1 4.03 Telefonaktiebolaget (ERIC) 0.17 2.62 P/FCF 10.9 11.3 13.6 14.5 13.38 Motorola Solutions Inc. (MSI) 42.19 -

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Microsoft Corp. (NASDAQ: MSFT)

Market Cap:

1.200T

Sector:

Information

Technology

Industry:

Software

Stock Type:

Large

Growth

Current Price:

$157.70

Fair Value:

$175.00

Holding Return:

519.40%

52 Week Range:

$97.19-$159.55

Business Summary

Microsoft develops and licenses consumer and enterprise software such

as the Microsoft Office Suite and Windows software. The company

operates within three segments, which are productivity and business

processes (Microsoft Office, Cloud-based Office 365, Exchange,

Sharepoint, Skype, LinkedIn, Dynamics), intelligence cloud infrastructure

and platform as a service offering (Azure, Windows Server OS, SQL

Server) and more personal computing (Windows Client, Xbox, Bing search,

display advertising, Surface laptops/tablets/desktops). Microsoft’s

revenues are split by product and service/other with products accounting

for about 60% of their total revenue. Microsoft has been transitioning

their focus to cloud-based computing which both individuals and

institutions have increased demand for.


Services and subscriptions continue

to increase year over year, which

provides re-occurring sales and

strengthens the stability of the

business structure.

Microsoft’s revenue growth is

expected to nearly double by 2027,

driven by revenue growth inflows

through the development of more

services such as their cloud

computing platform Azure and

several others.

Microsoft holds a competitive

advantage in the computing services

market through its industry leading

Office Suite, which is widely used by

individuals and businesses around

the world.

Poor performing business segments

have the potential to offset revenue

growth and development for

Microsoft’s strong performing

business segments in the future.


2019

Total Return 22.2 14.7 40.2 20.2 57.6 20.99

ROA 7.0 11.2 11.5 6.5 14.39 11.04

ROE 14.4 27.0 31.9 19.5 42.21 27.27

Net Margin 13.0 22.5 26.4 15.0 31.18 20.33

Asset Turnover 0.54 0.50 0.44 0.43 0.46 0.54


Op. Margin 30.1 29.8 30.4 31.8 34.14 20.66

Revenue Growth 7.77 -8.83 5.43 22.69 14.03 8.41

Op. Income Growth 1.03 -24.42 6.29 54.90 22.54 10.36

EPS Growth -43.73 41.89 29.05 -21.40 167.81 15.06




Next Year 11.49 20.40

Past 5 Years 12.40 8.50

Next 5 Years 13.00 14.10


Ratio 2015 2016 2017 2018 2019

P/E 36.8 29.8 30.2 41.8 29.75 Return ROE

P/B 5.7 6.8 7.4 9.1 11.32 Oracle Corp. (ORCL) 19.33 32.52

P/S 5.0 5.8 7.2 6.9 9.40 VMware Inc. (VMW) 10.69 31.46

P/FCF 15.5 13.7 16.6 17.5 23.31 Apple Inc. (AAPL) 88.57 55.92

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NVIDIA Corporation (NASDAQ: NVDA)

Market Cap:

144.00B

Sector:

Information

Technology

Industry:

Semiconductors

& Equipment

Stock Type:

Large

Value

Current Price:

$235.30

Fair Value:

$283.00

Holding Return:

23.67%

52 Week Range:

$127.69-$241.80

Business Summary

NVIDIA is a leading designer and producer of graphics cards, chips, and

computer technology. The application of their products ranges from

gaming PC’s, automotive infotainment systems, and data centers. The

company has ventured into other categories like autonomous driving and

artificial intelligence. The graphics cards and units are also widely desired

and used by “miners” in regards to cryptocurrencies like Bitcoin,

Ethereum and Litecoin. NVIDIA has been said to have technology that is

years ahead of its competitors.


High market share in cloud and

processing technologies will deliver

strong revenue sources for NVIDIA

for years to come.

NVIDIA claims that automotive and

gaming devices are expected to

become their biggest growth drivers

in the future.

Potential decreases in GPU sales. as

well as higher taxes and R&D costs,

can drive down NVIDIA’s

performance.

Economic turmoil in countries such

as China, which account for roughly

to 50% of NVIDIAs’ sales, prove to be

a leading risk factor for future

performance and revenue growth.


2019

Total Return 67.09 226.9 81.98 -30.82 76.95 18.20

ROA - 8.43 19.36 28.91 33.76 10.83

ROE - 13.82 32.57 46.05 49.26 19.76

Net Margin - 12.26 24.11 31.37 35.34 22.27

Asset Turnover - 0.69 0.80 0.92 0.96 0.54

Financial Leverage - 1.65 1.71 1.50 1.42 2.94

Op. Margin - 17.53 28.03 33.05 32.47 21.89

Revenue Growth - 37.92 40.58 20.61 -6.81 -2.74

Op. Income Growth - 120.62 65.72 18.50 -25.18 -21.92

EPS Growth - 137.96 79.38 31.02 -25.17 -29.09




Next Year 17.26 13.80

Past 5 Years 34.40 33.50

Next 5 Years 14.70 9.30


Ratio 2015 2016 2017 2018 2019

P/E 30.80 54.74 48.01 17.85 60.18 Return ROE

P/B 3.97 10.81 18.46 8.59 12.84 Advanced Micro Devices

(AMD) 148.4 16.66

P/S 3.80 10.85 13.94 6.74 14.52 Intel Corp (INTC) 30.70 27.58

P/FCF 16.70 45.54 43.68 19.91 34.69 Texas Instrument (TXN) 39.56 56.05

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MATERIALS-OVERWEIGHT

Sector Overview The Construction Materials Industry is expected to experience

growth into 2020 due to the expansion in both domestic and

foreign construction industry, driving demand for construction

materials.

Containers and Packaging: This industry is comprised of

companies which manufacture metal, glass, plastic, paper, and

cardboard containers. The Containers and Packaging Industry

relies heavily on food and beverage, pharmaceutical, and

household items industries to drive sales.

Metals and Mining: The Metals and Mining Industry includes

producers of mining related products as well as companies

specializing in the extraction of base and precious metals.

Paper and Forest Products: Companies that are included in the

Paper and Forest Products Industry are manufactures of timber

and related wood products as well as producers of all grades of

paper. Some companies specializing in paper packaging are

excluded.

As the United States economy moves along the late

stage of the business cycle, the materials Sector

thrives. Historically, the Materials Sector

outperforms the S&P 500 due to the increase in

prices of raw materials during this time. The

Materials Sector has a market cap of $1.81 Trillion

and includes the following industries: Chemicals,

Construction Materials, Containers and Packaging,

Metals and Mining, and Paper and Forest Products.

Chemicals: The Chemicals Industry encompasses

the producers of commodity, fertilizers, diversified,

agricultural, and specialty chemicals. Industrial

gases manufacturers are also included in the

Chemicals Industry.

Construction Materials: The Construction Materials

Industry includes companies involved with the

procurement of raw materials used in construction.

These materials include: clay, cement, concrete,

bricks, and sand.


Sector 24.60% 9.58% 7.06% S&P 500 31.50% 15.26% 11.70%

*Annualized Returns

Franco Nevada Corp. (NYSE: FNV)

Market Cap:

19.56B

Sector:

Materials

Industry:

Gold

Stock Type:

Large

Growth

Current Price:

$103.30

Fair Value:

$99.42

Holding Return:

47.50%

52 Week Range:

$67.97-104.87

Business Summary

Franco-Nevada Corp is focused on precious metals royalties and

investments. FNV owns a portfolio of royalty streams and precious metals

that they actively manage to generate revenue. The majority of its

revenue comes from gold, silver, and platinum. FNV helps illiquid mining

companies fund exploration and production projects and takes a claim

(royalty) of an agreed upon amount of metal once ore has been mined.

The success, or failure, of royalty companies is based upon the success

of the projects they fund and the market price of the various

commodities.


Historically, with a maturing business

cycle, commodity prices strengthen.

This presents an opportunity for FNV

to fund more projects and generate

more return on their portfolio of

metal in the short-term. In the long-

term, FNV will be affected by the

availability of development capital.

One key risk associated with royalty

companies is the decline of

production. Since 2000, the amount

of gold ore produced has been

steadily declining, leading to supply

constraints. While this may drive up

the price, if less mines are being

built, FNV and its peers could be in

serious financial distress.

The ROA and ROE figures being so

similar signifies that Franco-Nevada

Corp is not taking on much debt. This

prudent capital structure leads to

increased Current and Quick Ratios,

showing that the firm can remain

liquid in a financial emergency.


2019

Total Return -6.77 27.56 31.35 -12.05 48.62 11.06

ROA 0.69 3.10 4.32 4.46 6.58 -.29

ROE 0.75 3.34 4.40 4.54 7.06 8.36

Net Margin 5.55 20.03 28.84 31.81 40.71 2.89

Asset Turnover 0.12 0.15 0.15 0.14 .17 .76

Financial Leverage 1.16 1.02 1.02 - 1.04 1.53

Op. Margin 26.24 33.84 34.83 40.05 40.47 -64.10

Revenue Growth 0.45 37.39 10.65 - 29.23 16.11

Op. Income Growth -38.02 77.41 13.85 - 54.91 -43.9

EPS Growth -77.46 337.50 51.43 - 145.83 69.78





Past 5 Years 17.50 10.50



Ratio 2015 2016 2017 2018 2019

P/E 130.71 114.92 99.94 61.55 56.45 Return ROE P/B 2.50 2.55 3.19 2.76 3.86 Alamos Gold Inc. (AGI) 5.83 4.81

P/S 16.20 17.78 21.79 19.54 22.98 B2Gold Corp. (BTG) 18.45 13.43

P/FCF 27.25 27.45 29.85 26.10 45.95 Barrick Gold Corp. (GOLD) 13.61 3.80

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Martin Marietta Materials, Inc. (NYSE: MLM)

Market Cap:

17.45B

Sector:

Industrials

Industry:

Building

Materials

Stock Type:

Mid Core

Current Price:

$279.64

Fair Value:

$230

Holding Return:

32.00%

52 Week Range:

$167.62-$281.17

Business Summary

Martin Marietta Materials Inc. is one of the largest producers of

construction aggregates in the United States. Martin Marietta is a natural

resource-based building materials company. The company has a network

of over 300 quarries in 31 states, Canada, and the Bahamas. Martin

Marietta also provides ready mixed concrete, asphalt and paving

services. The company’s building materials are utilized in infrastructure,

nonresidential, and residential construction. The company also operates

a Magnesia Specialties business with production facilities in Michigan

and Ohio. The company was formed in 1993 as a North Carolina

corporation, and since then has completed over 90 smaller acquisitions.


The company’s geographic footprint

is heavy in states that have a high

need and the financial capability for

an increase in road work. This

illustrates the potential for strong

and continued growth into the future.

The company boasts a healthy

balance sheet that allows it to

consider large acquisitions. As

mentioned in the business summary,

it has over 90 successful

acquisitions, allowing the company

to grow in different markets, while

eliminating competitors.

The company’s earnings depend on

volatile outside factors like economic

performance, government budgets,

and lending availability. If the

economic market takes a downturn,

this can be harmful to the growth in

the company and stock.


2019

Total Return 25.3 63.4 0.6 --21.4 63.9 23.24

ROA 4.1 5.9 8.7 5.1 6.0 4.7

ROE 6.8 10.3 16.1 9.8 11.8 10.6

Net Margin 8.1 11.1 17.9 11.1 12.9 3.8

Asset Turnover 0.50 0.54 0.49 0.46 .48 .86


Op. Margin 11.6 12.5 13.5 13.6 12.9 17.11

Revenue Growth 1.17 2.42 8.04 5.32 7.46 7.47

Op. Income Growth 14.1 17.8 17.9 16.6 28.1 -29.39

EPS Growth 58.30 54.55 69.68 33.96 25.90 22.31




Next Year 16.75 24.10

Past 5 Years 21.60 11.90

Next 5 Years 8.50 12.10


Ratio 2015 2016 2017 2018 2019

P/E 33.8 35.0 32.3 14.5 28.7 Return ROE

P/B 2.1 3.4 3.2 2.2 3.3 Summit Materials Inc (SUM) 1.82 8.01

P/S 2.6 3.8 3.5 2.6 3.7 Eagle Materials Inc (EXP) -6.76 1.67

P/FCF 18.5 21.4 20.7 15.9 16.6 Vulcan Materials Co (VMC) 7.17 11.55

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UTILITIES - OVERWEIGHT

Sector Overview Demand and production of natural gas has increased

tremendously in recent years due to its versatility. Natural gas is

used for electricity production, industrial uses (e.g.

petrochemical manufacturing), and heating and cooking in

homes. Natural gas is also the cleanest burning fossil fuel,

producing 20% less carbon dioxide than oil.

Independent Power and Renewable Electricity Producers: This

industry includes companies that engage in the production and

distribution of renewable energy sources. Some examples of

renewable energy are: biomass fuel, geothermal energy, solar

energy, hydropower, and wind power. This Industry also includes

companies that are Independent Power Producers, Gas and

Power Marketing and Trading Specialists, or Integrated Energy

Merchants.

Multi-Utilities: The Multi-Utilities or Diversified Utilities Industry is

made up of companies who have business in more than one

specific Utilities Industry. Companies who can provide a

combination of electric, gas, or water utilities maintain

noticeable stability.

Water Utilities: The Water Utilities Industry includes companies

who engage in the purchase and redistribution of water to

residential, commercial and industrial consumers. Companies in

this industry could also partake in water treatment. The Water

Utilities Industry is strictly regulated by the Food and Drug

Administration to ensure the safety of drinking water. Stocks in

this Industry generally perform well in an economic downturn, or

in the summer, when demand for water is at its highest.

The Utility sector has a market cap of $1.31 Trillion

and is comprised of companies that provide utilities

like electricity, gas, or water. As investors begin to

take a more conservative outlook on the market,

Utilities is one of the most trusted and consistent

performers. While other sectors are distressed by

the volatility close to the end of an expansion,

Utilities appear to thrive.

Electric Utilities: The Electric Utilities Industry

includes companies that engage primarily in

providing electricity to individuals or companies.

This industry alone has a market cap of about $704

Billion. Stocks in the Electric Utility Industry

generally offer high dividend yields and low

volatility. Distribution of electricity is regulated by

state commissions and transmission is overseen by

the states or the Federal Energy Regulatory

Commission. As environmental concerns have risen,

companies have been expected and regulated to

produce electricity with less of an environmental

impact.

Gas Utilities: The Gas Utilities Industry includes

companies whose primary business is to distribute

and transmit natural gas to residential, commercial

and industrial customers.


Sector 26.40% 13.83% 10.31% S&P 500 31.50% 15.26% 11.70%

*Annualized Returns


Dominion Energy, Inc. (NYSE: D)

Market Cap:

$69.40B

Sector:

Utilities

Industry:

Multi-Utilities

Stock Type:

Large

Value

Current Price:

$82.82

Fair Value:

$80.00

Holding Return:

24.35%

52 Week Range:

$67.41-$83.93

Business Summary

Dominion Energy Inc. was founded in 1909 and is headquartered in

Richmond, Virginia. Dominion operates in 3 segments: Power Generation,

Gas Infrastructure and Southeast Energy. The company has 26,000

megawatts of generating capacity with 6,700 miles of electric

transmission lines and 58,300 miles of electric distribution lines. In

addition, Dominion has 14,800 miles of natural gas transmission with

52,300 miles of natural gas distribution pipelines. It serves over 5 million

utility and retail customers, as well as sells electricity to wholesale

markets.


Dominion Energy has significant

infrastructure in several states and

is currently expanding with the

Atlantic Coast Pipeline. The new

pipeline is expected to increase

revenue.

Dominion’s stock offers a dividend

yield of 5.07% along with a history of

consistent dividend growth.

Dominion has established a wide

economic moat through efficient

scale and conservative strategies.

This secures future revenue growth

and discourages competitors.

Regulation of the natural gas

industry is the primary concern for

Dominion, however, they have

signed long term contracts and

supported constructive regulation to

ensure steady growth


2019

Total Return -8.67 17.37 9.80 -7.72 13.05

10.43

ROA 3.36 3.26 4.05 3.17 1.48 2.71

ROE 15.68 15.57 18.89 13.14 5.39 9.65

Net Margin 16.25 18.09 23.83 18.31 8.09 10.19

Asset Turnover 0.21 0.18 0.17 0.17 0.18 0.27


Op. Margin 30.30 30.9 32.80 27.10 23.46 17.31

Revenue Growth -6.06 -.46 7.23 6.20 23.99 .31

Op. Income Growth 29.95 2.57 13.87 -12.25 7.23 29.49

EPS Growth 42.86 7.50 37.21 -20.76 56.68 16.70




Next Year 5.57 4.40




Ratio 2015 2016 2017 2018 2019 P/E 22.50 23.10 24.00 14.80 60.90 Return ROE P/B 3.20 3.20 3.20 2.60 2.51 Exelon Corp. (EXC) 1.90 9.32 P/S 3.30 4.20 4.10 3.50 4.11 Sempra Energy (SRE) 41.21 12.61 P/FCF 8.90 10.60 11.60 10.10 13.32 National Grid PLC (NGG) 29.30 7.69

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Public Service Enterprise Group, Inc. (NYSE: PEG)

Market Cap:

29.76B

Sector:

Utilities

Industry:

Multi-Utilities

Stock Type:

Large

Value

Current Price:

$52.05

Fair Value:

$47.00

Holding Return:

78.87%

52 Week Range:

$49.97 - $63.88

Business Summary

Public Service Enterprise Group Incorporated was incorporated in 1985

and is based in Newark, New Jersey. Through its subsidiaries, the firm

operates as an energy company primarily in the Northeastern and Mid-

Atlantic regions in the United States. It operates through two segments,

PSE&G and PSEG Power. The PSE&G segment transmits electricity;

distributes electricity and gas to residential, commercial, and industrial

customers, as well as invests in solar generation projects, and energy

efficiency and related programs; and offers appliance services and

repairs. PEG has electric transmission and distribution system of 25,000

circuit miles and 858,000 poles. The Power segment operates nuclear,

coal, gas, oil-fired, solar, and renewable generation facilities.


Government regulations pose a risk

to PEG due to possible cost

increases or requiring new

equipment. Increases in these costs

could have a large impact on their

net income and an investors

valuation of PEG’s stock.

Regulation could be a growth

opportunity for PEG through clean

energy projects, like residential solar

installation. PEG is already ahead of

competition in clean energy,

investing in solar energy since 2009.

Clean energy is a growing portion of

PEG’s revenue.

Volatile power and gas market prices

in New Jersey and Long Island can

have a tremendous impact on PEG’s

revenue.

Innovation, customer service and

infrastructure provides PEG with a

substantial competitive advantage in

the Northeast and Mid-Atlantic

Regions. The limited number of

competitors in their geographical

area makes their stock very

dependable.


2019

Total Return -2.80 17.65 21.29 4.56 15.04 10.43

ROA 4.61 2.29 3.80 3.27 3.64 2.71

ROE 13.30 6.77 11.67 10.19 11.49 9.65

Net Margin 16.12 9.79 17.33 14.83 16.80 1019

Asset Turnover 0.29 0.23 0.22 0.22 0.22 0.27


Op. Margin 28.71 17.39 15.73 23.70 23.27 17.31

Revenue Growth -4.33 -13.00 0.25 6.74 3.92 0.31

Op. Income Growth 10.61 -47.17 77.45 -8.64 2.05 29.49

EPS Growth 10.37 -46.97 77.14 -8.71 17.67 16.70




Next Year 3.29 4.40




Ratio 2015 2016 2017 2018 2019

P/E 10.60 17.30 50.00 12.00 20.65 Return ROE

P/B 1.50 1.60 2.00 1.80 1.99 National Grid PLC (NGG) 29.30 7.69

P/S 1.80 2.40 2.90 2.80 2.97 Exelon Corp. (EXC) 1.90 9.32

P/FCF 5.10 6.50 8.00 8.70 9.57 Entergy Corp. (ETR) 39.77 13.02

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REAL ESTATE-OVERWEIGHT

Sector Overview Residential Real Estate: The residential segment of the

industry focuses on the buying and selling of properties used

as homes or for non-professional purposes. This segment

heavily relies on housing prices within the market to determine

the health of the segment. Construction of new houses

changes the supply and demand for residential real estate.

Firms that manage rentable properties perform well when

renting is attractive, and supply of rentable units is high.

Industrial Real Estate: The industrial real estate segment

focuses on properties that are used for manufacturing and

production. Some examples are the factories and plants that

are involved in vertical supply chain systems to provide

consumer products to retailers or other manufacturing centers.

Consumer spending and supply chain operating costs affect

this industry the most.

Commercial Real Estate: Commercial real estate segment

consists of the properties that are used for business purposes

such as retail and office spaces. The segment tends to perform

cyclically in relation to the economy.

Real Estate Investment Trusts: REITs invest in a variety of

properties in order to achieve returns that can sustain the

company financially. For REITs, the company must distribute

90% of their taxable income in dividends to their investors.

Other income is invested in the development or acquisition of

properties to ensure higher returns for stockholders. They also

can provide mortgages on various real assets.

The real estate sector made a large comeback

after the Recession of 2008 because properties

gained some of their value back after the

economic downturn. After 2008, GDP increased

and, hence, consumers had more household

income. People slowly began to buy houses

instead of renting. In 2010 and 2011, the sector

saw a 27.1% and 32.3% increase, respectively.

Between 2017 and 2019, there has been minimal

increase due to the stage of the business cycle-the

late stage. Each segment within the industry has

different metrics that are used to gauge the health

of the industry. The segments that lie in the real

estate sector are residential real estate, industrial

real estate and commercial real estate. Real

estate investment trusts are another segment

which can encompass all types of properties.

During the late stages of the business cycle, real

estate performs at an average rate compared to

the S&P 500. With recessionary stages upcoming,

it is important to know that the real estate industry

does not perform well when interest rates rise. As

the cost of borrowing for consumers and real

estate carriers increases, the demand for

mortgages and acquisitions may decline. The

industry becomes very defensive in the late stages

of the business cycle in order to prepare for poor

economic activities or a decrease in GDP. Real

estate investment trusts focus on repositioning

and strengthening their portfolio in these stages.

The real estate industry must maintain a workable

supply to feed demand for rentable units when

unattractive factors are involved, such as rising

interest rates. Development of new properties

continues in the late stages to ensure supply is

adequate and higher returns can be achieved.


Sector 29.00% 11.85% 8.66% S&P 500 31.50% 15.26% 11.70%

*Annualized Returns

American Tower Corp. (NYSE: AMT)

Market Cap:

101.78B

Sector:

Real Estate

Industry:

Equity REIT

Stock Type:

Aggressive Growth

Current Price:

$229.82

Fair Value:

$195.58

Holding Return:

125.25%

52 Week Range:

$153.92-$242.00

Business Summary

American Tower Corporation (AMT) is a real estate investment trust

founded in 1995 in Boston, Massachusetts. AMT invests in the global real

estate markets as well as being a large independent operator of wireless

and broadcast communication sites. Through its subsidiaries, AMT owns,

operates, and develops wireless and broadcast communications

properties. The company also leases antenna space on multi-tenant

communication sites to wireless service providers, radio, television

broadcast companies, government agencies, municipalities, and other

tenants in a number of industries.


Concentrates investments in

countries that are in earlier stages of

wireless infrastructure. Invests in

projects that accrue in value as the

infrastructure develops.

Has recurring revenue increases,

high operating leverage, predictable

operating costs, and minimal

nondiscretionary capital

expenditures.

Revenue is reliable due to strong

credit quality of tenants, low tenant

turnover, and growing wireless

adoptions.

Operating leverage is high due to the

availability for tenants to invest in

new towers within their current

leases.


2019

Total Return 19.25 -5.60 11.43 24.25 47.85 6.11

ROA 2.47 2.94 3.59 3.71 4.72 3.98

ROE 11.22 12.66 17.71 21.20 28.41 11.69

Net Margin 12.47 14.68 17.28 16.49 29.25 13.85

Asset Turnover .20 .20 .21 .22 0.19 0.29


Op. Margin 33.80 32.00 30.00 25.6 37.79 14.95

Revenue Growth 16.38 21.25 15.18 11.65 6.67 15.78

Op. Income Growth 8.46 14.90 7.85 -4.67 12.57 -

EPS Growth -29.50 40.43 34.85 3.75 52.71 -23.26





Past 5 Years 23.52 2.00

Next 5 Years 21.25 5.60


Ratio 2015 2016 2017 2018 2019

P/E 72.5 52.9 48.9 44.30 56.37 Return ROE P/B 6.2 6.7 11.9 15.0 20.94 Healthpeak Properties (PEAK) 17.01 10.0

P/S 8.9 8.2 9.4 10.8 14.05 Howard Hughes Corp. (HHC) 5.69 2.26

P/FCF 19.1 17.3 29.1 21.5 32.15 Brookfield Properties Inc.

(BPO)

15.50 26.97

145

165

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225

245

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Healthpeak Properties, Inc.(NYSE: PEAK)

Market Cap:

17.41B

Sector:

Real Estate

Industry:

Equity REIT

Stock Type:

Mid Cap Value

Current Price:

$34.47

Fair Value:

$34.00

Holding Return:

15.20%

52 Week Range:

$26.79-$37.93

Business Summary

Healthpeak Properties, Inc. is a multi-billion dollar healthcare REIT based out

of Irvine, California. The company has been public since 1985 and operates

in segments like senior housing, life sciences, medical offices, and hospitals.

The firm participates in many joint ventures with other strong companies in

order to stay diversified and increase shareholder wealth. In 2008, HCP was

the first healthcare REIT to be selected to the S&P 500 index. The real estate

investment trust’s CEO and President is Thomas M. Herzog.


Operates primarily with healthcare

facilities, which is an industry that

performs well in late stages of the

business cycle.

Persistent dividend distribution aligns

with the goals of the fund.

One tenant and operator accounts for

a significant portion of revenue,

imposing a risk to the company.

As with any REIT, PEAK faces

environmental risk caused by the

chance of a natural disaster(s)

damaging properties.


2019

Total Return -7.53 -8.95 -7.75 13.68 29.11 6.11

ROA -1.16 4.99 4.11 9.47 1.66 3.98

ROE -5.58 8.42 7.61 18.82 .73 11.69

Net Margin -28.79 27.31 18.73 38.17 2.18 13.85

Asset Turnover 0.09 0.15 0.16 0.22 0.14 0.29


Op. Margin 13.14 19.03 27.28 42.16 8.31 14.95

Revenue Growth - -16.31 -13.19 -0.09 8.16 15.78

Op. Income Growth - -45.65 -23.43 -11.98 -26.48 -

EPS Growth - -

210.74 -31.34 143.48 -95.98 -23.26




Next Year 4.02 7.90

Past 5 Years -10.60 2.00



Ratio 2015 2016 2017 2018 2019

P/E 76.48 - 22.29 77.58 19.68 Return ROE

P/B 1.75 1.51 2.21 2.63 2.94 Safehold, Inc. (SAFE) - 3.83

P/S 7.12 5.28 6.28 7.10 8.79 MGM Growth Properties (MGP) 24.56 4.42

P/FCF 14.32 10.25 14.32 15.58 19.68 CoreCivic, Inc. (CXW) 4.39 13.31

22

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32

34

36

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iShares Core U.S. Aggregate Bond Index ETF (NYSE: AGG)

Sector:

US Fund

Intermediate

Core Bond

Expense:

0.06%

P/E:

-

P/B:

-

ROE:

-

Current Price:

$112.37

Net Asset Value (NAV):

$69.24B

Holding Return:

-0.35%

52 Week Range:

$106.28-$114.30

Exchange Traded Fund (ETF) Overview

The iShares Core U.S. Aggregate Bond ETF (AGG) seeks to

track the performance of the overall U.S. investment-grade

bond market. More specifically, AGG attempts to emulate

the investment results of the Bloomberg Barclay’s U.S.

Aggregate Bond Index. AGG has 7,573 holdings, all of

which are rated BBB or higher, with at least 80% of these

holdings being the exact same securities that are within

the underlying index. The fund’s weighted average

maturity is 7.92 years, making it an intermediate-term

bond fund, and has an effective duration of 5.65.

Sector Allocation (%) Treasury/Agency 44.03

Mortgage-Backed Pass-Through 26.49

Industrial 14.36

Financials 7.64

Commercial Mortgage-Backed 2.21


Tracks the same fixed income benchmark as the

IMP portfolio, putting the IMP portfolio in a better

position to beat our overall benchmark.

Offers broad exposure to U.S. investment-grade

bonds.

Low-cost ETF that can diversify the portfolio and

provide stability and income.

Credit Rating Breakdown (%) AAA Rated 72.00

AA Rated 2.66

A Rated 10.77

BBB Rated 14.19

Cash/Derivatives 0.38

Maturity Breakdown (%)

0-5 Years 50.31

5-10 Years 31.46

10+ Years 17.85

Performance AGG U.S. Agg.

1-Year Return % 8.68 8.72

3-Year Return %

(Ann.)

3.99 4.03

5-Year Return %

(Ann.)

3.00 3.05

102

104

106

108

110

112

114

116

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NAV

($)

Date


Vanguard Total Bond Market Fund (NYSE: BND)

Sector:

US Fund

Intermediate

Core Bond

Expense:

0.035%

P/E:

-

P/B:

-

ROE:

-

Current Price:

$83.77


$248.66B

Holding Return:

-0.27%

52 Week Range:

$79.14-$85.30


The Vanguard Total Bond Market Fund (BND) seeks to

track the performance of the Bloomberg Barclay’s U.S.

Aggregate Float Adjusted Index. BND holds over 8,200

bonds with an average coupon of 3.2% and average

duration of 6.3 years. BND focuses on U.S. investment-

grade bonds with maturity dates less than 10 years, with

an even bigger focus on bonds that will mature in less

than 5 years.


Low volatility helps reduce risk while maintaining

relatively high potential for investment income.

Tracks a similar index compared to the IMP fixed

income benchmark, offering greater potential to

beat our benchmark.

With over half of the fund’s bonds having been

issued by the U.S. Government, the risk of default is

relatively low.

Sector Allocation (%) Asset-Backed 0.4

Commercial Mortgage-Backed 2.2

Finance 8.5

Foreign 4.1

Government Mortgage-Backed 22.3

Industrial 16.5

Treasury/Agency 43.3

Utilities 2.0

Other 0.7

Credit Rating Breakdown (%)

U.S. Government 63.3

AAA Rated 3.7

AA Rated 3.4

A Rated 11.4

BBB Rated 18.2


0-5 Years 57.6

5-10 Years 22.5

10+ Years 19.9

Performance

BND U.S. Agg.


3-Year Return %

(Ann.)

4.04 4.03

5-Year Return %

(Ann.)

3.00 3.05

76

77

78

79

80

81

82

83

84

85

86

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9

2/1/1

9

3/3/1

9

4/2/1

9

5/2/1

9

6/1/1

9

7/1/1

9

7/31/19

8/30/19

9/29/

19

10/29/19

11/28/19

12/28/1

9

NAV

($)

DATE

SPDR Portfolio Aggregate Bond ETF (NYSE: SPAB)

Sector:

US Fund

Intermediate

Core Bond

Expense:

0.04%

P/E:

-

P/B:

-

ROE:

-

Current Price:

$29.34


$5.06B

Holding Return:

-0.57%

52 Week Range:

$27.79-$29.92


The SPDR Portfolio Aggregate Bond ETF (SPAB) seeks to

provide investment results that correspond to the price

and yield of the Bloomberg Barclay’s U.S. Aggregate Bond

Index. The fund has over 5,000 holdings with an average

maturity of 7.67 years and an average coupon of 3.09%.

SPAB has managed to match the performance of its

benchmark in 2019.

Sector Allocation (%) Treasury 38.96

Mortgage Backed Securities (MBS) 26.95

Industrial 15.58

Finance 8.22

Utility 2.07

Commercial MBS 2.06


Out of the IMP’s three fixed income ETFs, SPAB

manages to track the Bloomberg Barclay’s U.S.

Aggregate Bond Index the most efficiently.

One of the lowest cost fixed income ETFs on the

market, making it a cheap option to diversify the

portfolio.

Creates a stable stream of income for the portfolio.

Credit Rating Breakdown (%) AAA Rated 71.53

AA Rated 3.06

A Rated 10.68

BBB Rated 14.74


0-5 Years 52.32

5-10 Years 29.95

10+ Years 17.73

Performance

SPAB U.S. Agg.


3-Year Return %

(Ann.)

3.97 4.03

5-Year Return %

(Ann.)

2.99 3.05

27

27.5

28

28.5

29

29.5

30

30.5

1/2/1

9

2/1/1

9

3/3/1

9

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9

5/2/1

9

6/1/1

9

7/1/1

9

7/31/19

8/30/19

9/29/19

10/29/19

11/28/19

12/28/19

NAV

($)

Date


Invesco S&P 500 High Dividend Low Volatility ETF (NYSE: SPHD)

Sector:

Large Cap

Value

Expense:

0.30%

P/E:

15.63

P/B:

2.12

ROE:

13.36%

Current Price:

$44.03


$44.03

Holding Return:

28.58%

52 Week Range:

$37.88-$44.04


With 51 holdings, Invesco S&P 500 High Dividend Low

Volatility ETF SPHD delivers a high yield while effectively

keeping risk in check. Although the fund only includes 50

stocks, it has limited exposure to stock-specific risk. The

resulting portfolio lands in large-value territory. It offers a

higher dividend yield and smaller market-cap orientation

than the Russell 1000 Value Index.


Historically, the fund has exhibited low sensitivity to

market fluctuations. It should hold up better than

most of its peers during market downturns.

The fund's holdings offer attractive dividend yields.

Their high dividend payouts should make it harder

for managers to invest in low-return projects.

Individual stocks don't have a big impact on the

fund's performance.

This portfolio can introduce large sector bets, which

can be a source of risk.

Sector Allocation (%) Consumer Discretionary 2.04

Consumer Staples 11.12

Energy 13.98

Financials 15.24

Health Care 5.69

Industrials 1.63

Real Estate 20.81

Information Technology 4.01

Materials 4.35

Communication Services 6.89

Utilities 14.24

Top 5 Holdings (%) Reward and Risk

Iron Mountain Inc 3.16

AT&T Inc 3.11 (FUND) S&P 500

Altria Group Inc 3.00 1-Year Return % 20.32 28.88

Kimco Realty Corp 2.97 3-Year Return % (Ann.) 8.13 13.00

PPL Corp 2.79 3-Year Sharpe Ratio - -

34

35

36

37

38

39

40

41

42

43

44

45

1/1/1

9

2/1/1

9

3/1/1

9

4/1/1

9

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9

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9

7/1/1

9

8/1/1

9

9/1/1

9

10/1/19

11/1/19

12/1/1

9

NAV

($)

Date

Vanguard High Dividend Yield ETF (NYSE: VYM)

Sector:

Large Cap

Value

Expense:

0.06%

P/E:

16.1

P/B:

2.2

ROE:

15.9%

Current Price:

$93.71


$93.73

Holding Return:

52.38%

52 Week Range:

$76.68-$94.44


Vanguard High Dividend Yield ETF seeks to track the

performance of a benchmark index that measures the

investment return of common stocks of companies that

are characterized by high dividend yields. The Fund’s

investment approach is to track the performance of the

FTSE High Dividend Yield Index. They are passively

managed, have large-cap equity with an emphasis on

stocks that are forecasted to have above average dividend

yields, and have low expenses to minimize net tracking

error.


The Fund is an excellent choice for exposure to

stocks with higher than average dividend yields

without taking outsize risk.

The Fund’s broadly diversified portfolio and its low

fee provide a persistent edge over its large-cap

value peers.

The ETF effectively diversifies the risk of solely

focusing on yield by screening holdings based on

dividend yield weighted by market cap.

The ETF stable income and provides a cushion to

stay invested during turbulent markets; however,

high-yielding stocks can be dangerous because the

companies can be under distress and cut dividends.

Sector Allocation (%) Consumer Discretionary 5.04

Consumer Staples 14.86

Energy 7.19

Financials 18.21

Health Care 15.29

Industrials 8.06

Real Estate 0.03

Information Technology 10.75

Materials 3.45

Communication Services 7.54

Utilities 9.58

Top 5 Holdings (%) Reward and Risk

JPMorgan Chase & Co. 3.82

Johnson & Johnson 3.77 VYM S&P 500

Procter & Gamble Co 2.96 1-Year Return % 24.20 28.88

AT&T Inc 2.72 3-Year Return %

(Ann.)

10.82 13.00

Intel Corp 2.55 3-Year Sharpe Ratio - -

$65.00

$70.00

$75.00

$80.00

$85.00

$90.00

$95.00

$100.00

1/2/1

9

2/1/1

9

3/3/1

9

4/2/1

9

5/2/1

9

6/1/1

9

7/1/1

9

7/31/19

8/30/19

9/29/

19

10/29/1

9

11/28/1

9

12/28/19

NAV

($)

Date

NAV


DIVIDENDS In 2019, the IMP portfolio received $4,460.29 in dividends, which equated to a 1.97% dividend yield. In comparison

to the S&P500, which yielded roughly 1.80% in dividends as of December 31, 2019, the IMP portfolio has a slightly

higher yield. The holdings with the three highest dividend amounts were VanEck Vectors Emerging Markets High

Yield Bond ETF (HYEM), Invesco S&P500 High Dividend Yield Low Volatility ETF (SPHD), and Vanguard High Dividend

Yield ETF (VYM). As you can see, all three of these holdings were ETFs with a high yield focus. Non-ETF holdings that

paid the highest dividend amounts were TransCanada Corp. (TRP), Proctor & Gamble (PG), and Cisco Systems, Inc.

(CSCO) as well as UnitedHealth Group, Inc. (UNH) both paid $165.60 for the third highest payout.

MERGERS AND ACQUISITIONS

Sold Name Ticker Gain/Loss Return Date

Celgene Corp. CELG ($ 638.64) -45.6% 11/21/2019

Acquired

Name Ticker Shares Share Price Date

Bristol-Meyer Squibb

Co.

BMY 16 $ 55.90 11/21/2019

Ticker Sum of Dividends Ticker Sum of Dividends Ticker Sum of Dividends

AAPL 127.68$ D 82.59$ NVDA 4.00$

CAN 90.40$ DEO 69.05$ PEAK 12.95$

AGG 55.01$ DIS 76.81$ PEG 112.80$

ALGT 31.50$ ET 158.60$ PG 177.28$

AMGN 121.80$ FNV 56.43$ PRI 50.32$

AMT 72.20$ GILD 75.60$ SMG 16.50$

SPD 45.80$ HCP 25.90$ SPAB 13.84$

APTS 33.80$ HON 18.00$ SPHD 454.67$

ATVI 11.10$ HSY 15.46$ Ticker 159.12$

BAC 97.68$ HYEM 486.16$ TJX 29.67$

BLK 99.00$ JNJ 56.25$ TRP 208.97$

BND 35.91$ KO 112.00$ UNH 165.60$

BUD 44.28$ LMT 81.00$ V 42.00$

CERN 18.00$ MLM 14.42$ VYM 230.19$

CI 0.36$ MMM 144.00$ WRC 76.14$

COF 20.00$ MSFT 141.75$

CSCO 165.60$ NTES 22.10$ Grand Total 4,460.29$

PORTFOLIO SNAPSHOT

Documents

John L. Grove College of Business Financial Advisory€¦ · Capital One Financial, LLC David J. Morgan ‘80 Farmers Insurance - Retired Joseph T. Nicholas, III, CFP ‘99 Wilmington