The document provides an overview of the Student Investment Fund at Salisbury University for Fall 2010. It includes sections on the fund's investment policy statement and strategy, an economic analysis by the lead analyst Frank Balas, the fund's sector allocations for spring and fall 2010, highlights on individual companies in top sectors like materials, industrials, energy, and information technology, and an analysis of the fund's performance relative to benchmarks like the S&P 500 over various time periods.
2. SUSIF Investment
Policy Statement
The investment goal of the portfolio is a strategic
core-oriented allocation to the overall domestic
equity market.
The investment objective of the portfolio is to
achieve long-term capital growth by investing in
marketable U.S. equities with a risk profile that is
similar to our benchmark, (The S&P 500 Index).
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3. Investment Strategy
Economic Analysis
Where is the economy headed?
Sector Analysis
How does sector fit economic view?
Individual
Equity
Analysis
Strength / Valuation of individual stock
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4. Investment Strategy
1 2 3
Dividend Earnings Justified
Discount Discount P/E
Model Model Model
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5. Agenda
1 Economic Analysis
2 Sector Allocation
3 Individual Company Highlights
4 Performance Analysis
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18. Economic Outlook
6 -12 month projections
GDP growth will be (3-4%)
Unemployment will remain high (8-10%)
Interest rates will stay low (Fed Funds 0 – 0.5%)
Inflation will remain subdued (2% - 3%)
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20. Spring 2010 Allocation
Sector: S&P 500 SUSIF Target SUSIF Actual (12/1/2010)
Energy 10.90% 18.25% 20.28%
Materials 3.50% 2.62% 2.48%
Industrials 10.80% 15.55% 15.05%
Consumer Discretionary 10.50% 14.50% 14.79%
Consumer Staples 11.30% 7.70% 7.46%
Health Care 11.60% 9.50% 9.34%
Financials 15.70% 9.21% 5.80%
Information Technology 18.80% 20.65% 21.38%
Telecommunications 3.30% 3.00% 3.12%
Utilities 3.60% 0.00% 0.00%
Over-weighted: Energy, Industrials, Consumer Discretionary, IT,
Under-weighted: Consumer Staples, Health Care, Financials, Telecom.,
and Utilities
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21. Spring 2010
Sector Allocation
Utilities
0% Energy
15% Materials
Cash/SPY 3%
20%
Telecommunication
s
0%
Industrials
12%
Information
Technology
21%
Consumer
Discretionary
8%
Financials
9% Consumer Staples
Health Care 5%
7%
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22. Fall 2010
Sector Allocation
Telecommunications Utilities
3.12% 0%
Energy
20.28%
Information
Technology
21.38%
Materials
2.48%
Financials
5.80% Industrials
15.05%
Health Care
9.34%
Consumer
Discretionary
14.79%
Consumer Staples
7.46%
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24. Calgon Carbon (CCC)
Company Background
Calgon Carbon is the world's largest manufacturer of
granular activated carbon
The company has pioneered cutting-edge
environmental purification systems
Reasons for holding
Valuations
Environmental regulations
Increase in global population
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26. United Technologies
(UTX)
Company Background
United Technologies Corporation provides a broad
range of high-technology products and services to the
global aerospace and commercial building industries.
Named No. 1 "Most Admired" aerospace and defense
company (2010, Fortune)
Reasons for holding
Valuations
The increasing global defense spending
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29. Alliance Resources
The company operates the Illinois and Appalachian
regions which have the most productive coal mines
in the U.S.
Produced 25.8 million tons of coal in 2009 from
which 25 million tons were sold
Why we held this stock
Offers a dividend of $3.24 per share
Has a 5-year growth rate of 10 percent
As of December 1, 2010, the stock has achieved a return
of 108.9 percent since we purchased it
Continues to add and develop new coal mines
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31. Concho Resources
The company is focused on the drilling and exploration
of oil in the Permian Basin which is the largest onshore
drilling site in the U.S.
Operated in 361 drill wells with an average production
rate of 30.6 million barrels of oil per day
Why we held this stock
Has a 5-year growth rate of 41.4 percent
As of December 1, 2010, the stock has achieved a return of
66.9 percent since we purchased it
Continues to identify new drilling opportunities with undeveloped
reserves
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34. WMS Industries
Casino Equipment Supplier
Supplies electronic slot machines to casinos all over
the world
Why we bought:
Casino Industry has shown signs of recovery
Supplier of #1 selling slot machine of all time, Lord Of
The Rings.
Expansion into Macau leading to higher growth
5 year expected growth rate of close to 30% yet was
only trading at 15 times earnings
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36. JP Morgan
Commercial and Investment Bank
Second largest bank in the United States in terms of
deposits
Purchased/acquired Bear Sterns and Washington
Mutual in 2008.
Why we bought
Strongest bank in the industry
CEO Jamie Dimon
Previous acquisitions are becoming profitable
Ability to pay a lucrative dividend when allowed to by
the FED
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39. Thermo Fisher Sci.
World leader in providing analytical instruments,
equipment, reagents & consumables, software, &
services for research, manufacture, analysis,
discovery, and diagnostics
Two divisions:
• Thermo Scientific
– Provides high-end analytical instruments ,laboratory
equipment & software
• Fisher Scientific
– Provides laboratory equipment, chemicals, supplies and
services used in healthcare, scientific research, safety
and education
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40. TMO
Why we BOUGHT
15% growth this year and 12% over the next
five years
aging baby-boomers will fuel growth and
provide an opportunity to increase both
margins and market share
expand in emerging markets with the Chinese
and Indian markets
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41. Colgate Palmolive
oral care, personal care, home care, and pet
food markets
leading global market share of 45% in the
toothpaste market
Why we HELD
long history of steady and increasing dividend
payments
projected to have steady growth over the next year
Low debt
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44. ABOVENET Inc.
Broadband Telecommunications Company
Its private optical network delivers key
network and IP services in and among top
U.S. metro markets and globally
Pleasant Surprise
Special $5 dividend per share to be given on
December 27th
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46. Emerging Markets
Google Baidu
Internet Search Engine Internet Search Engine
Largest Internet Search Known as the “Google of
Engine in the U.S. China”
Why Hold Some Why Buy
Reported third quarter
earnings at 70% over 2011 expected growth of
previous quarter 60.80%
Why Sell Some 2010 stock growth of
186.5%
Ability to take advantage of
an emerging market while
remaining diversified
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48. Check Point Tech. Sol.
Information Technology Security Firm
Provides affordable technology software
solutions to large companies as well as
individuals
Among Leaders in Server Security
Technology
More Good News
UBS has upgraded Checkpoint stock and had
raised its price target from $47 to $50
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51. Return vs. Indices
Portfolio Performance Since Inception
1.30000
1.20000
Wealth Relatives
1.10000
1.00000
SU Fund
0.90000
0.80000 S&P 500
0.70000 NASDAQ
0.60000
DJIA
0.50000
0.40000
0.30000
0.20000
Dates
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52. Wealth Relatives
0.55
0.65
0.75
0.85
0.95
1.05
1.15
1.25
1.35
11/30/2005
3/2/2006
6/2/2006
9/2/2006
12/2/2006
3/2/2007
6/2/2007
9/2/2007
12/2/2007
3/2/2008
Dates
6/2/2008
9/2/2008
Return vs. Indices
12/2/2008
Performance
3/2/2009
5-Year Portfolio
6/2/2009
9/2/2009
12/2/2009
3/2/2010
6/2/2010
9/2/2010
DJIA
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S&P 500
SU Fund
NASDAQ
53. Return vs. Indices
3-Year Portfolio Performance
1.1
1
Wealth Relatives
0.9
SU Fund
0.8 S&P 500
0.7 NASDAQ
0.6 DJIA
0.5
0.4
Dates
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54. Return vs. Indices
1-Year Portfolio Performance
1.2
Wealth Relatives
1.1 SU Fund
S&P 500
NASDAQ
1 DJIA
0.9
Dates
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55. Return vs. Indices
Fiscal YTD Performance SU Fund S&P 500
NASDAQ DJIA
1.2
1.15
Wealth Relatives
1.1
1.05
1
0.95
Oct-10
Jun-10
Jul-10
Aug-10
Sep-10
Nov-10
Date
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56. Return vs. Indices
SU Fund S&P 500
YTD Performance 2010
NASDAQ DJIA
1.2
1.15
Wealth Relatives
1.1
1.05
1
0.95
0.9 Feb-10
Mar-10
Jan-10
Apr-10
Dec-
09
Date
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57. Wealth relatives
0.5
0.7
0.9
1.1
1.3
1.5
7/31/2002
12/1/2002
4/1/2003
8/1/2003
12/1/2003
4/1/2004
8/1/2004
12/1/2004
4/1/2005
8/1/2005
12/1/2005
4/1/2006
Date
8/1/2006
12/1/2006
Return vs. Indices
4/1/2007
8/1/2007
12/1/2007
4/1/2008
8/1/2008
Rolling 12-month Returns
12/1/2008
4/1/2009
8/1/2009
12/1/2009
4/1/2010
DJIA
S&P 500
SU Fund
NASDAQ
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62. Return/Risk
(Since Inception)
0.001400
R
e 0.001200
t
0.001000
u
r 0.000800
n 0.000600
0.000400
SUSIF
S&P 500
0.000200
0.000000
0.000000 0.010000 0.020000 0.030000 0.040000 0.050000 0.060000
(0.000200)
(0.000400)
(0.000600)
(0.000800)
Risk
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63. Return/Risk
(5 Year)
0.0025
R
e
t
0.002
u
r
n
0.0015
SUSIF
S&P 500
0.001
0.0005
0
0 0.01 0.02 0.03 0.04 0.05 0.06
Risk
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64. Return/Risk
(3 Year)
0
R 0 0.01 0.02 0.03 0.04 0.05 0.06 0.07
e -0.0005
t
-0.001
u
r -0.0015
n
-0.002
SUSIF
-0.0025
S&P 500
-0.003
-0.0035
-0.004
-0.0045
-0.005
Risk
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65. Return/Risk
(1 Year)
0.0088
R
e
0.0086
t
u
0.0084
r
n
0.0082
SUSIF
0.008 S&P 500
0.0078
0.0076
0.0074
0 0.01 0.02 0.03 0.04 0.05 0.06
Risk
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66. Return/Risk
(3 Month)
0.06
R
e
t 0.05
u
r 0.04
n
0.03 SUSIF
S&P 500
0.02
0.01
0
0 0.01 0.02 0.03 0.04 0.05
Risk
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67. Summer Orders
Company Ticker Shares Limit Buy Limit Sell Stop Order Executed
Apple Inc. AAPL 50 $ 300.00
Oracle Corp. ORCL 360 $ 32.00
Research in Motion RIMM 150 $ 57.75 Yes +6.3%
Skyworks Solutions SWKS 650 $ 13.50
Aon Corp. AON 300 $ 39.75 Yes +9.7%
Bank of America BAC 250 $ 13.75 Yes -15%
First Financial BanK FFBC 250 $ 32.00 $ 13.75
Goldman Sachs GS 60 $ 110.00 $ 124.75
Calgon Carbon Corp. CCC 600 $ 10.00
China Green Agriculture CGA 450 $ 9.75 Yes -13%
Baxter International BAX 220 $ 39.75
Concho Resources CXO 275 $ 72.00 $ 41.00
National Oilwell Varco NOV 320 $ 36.00 Yes +73%
Urban Outfitters URBN 375 $ 45.00 $ 32.75 Yes +16.5%
Trina Solar TSL 500 $ 16.75 Yes +43.8%
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