FMA Investment Portfolio
-
Upload
devon-taljonick -
Category
Economy & Finance
-
view
31 -
download
0
Transcript of FMA Investment Portfolio
Investment PortfolioUniversity of Michigan, FlintFinancial Management Association
Economic Forecast
Economy is on an upward trend Economic growth stock market growth
The Stock Picks…
1. General Electric Co. (GE) Consumer and Energy Industry
2. Priceline Group, Inc. (PCLN) Travel Industry
3. The WhiteWave Foods Company (WWAV) Food Industry
4. Walt Disney Co. (DIS) Entertainment Industry
General Electric Co. (GE)Management
Jeffrey R. Immelt, Chairman of the Board and Chief Executive Officer• Named one of the “World’s Best CEOs” three times by Barron’s• Since serving as CEO, GE has been named “America’s Most Admired Company” and one of “The
World’s Most Respected Companies”• Has held several global leadership positions since coming to GE in 1982, including roles in GE's
Plastics, Appliances, and Healthcare businesses.• In 1989 he became an officer of GE and joined the GE Capital Board in 1997• Financial pivot plan for company from 2014 – 2016:
1. Growing EPS each year2. Achieving 75% of earnings from industrial businesses3. Returning $50 billion to investors4. Growing margins and returns.
• In 2014, GE’s share performance trailed S&P 500 returns; over the past five years, their total returns grew by 96%.
General Electric Co. (GE)
Advantages Recently rebalanced its portfolio
• 75% GE industrials• 25% GE capitol
Fair value is higher than GE’s stock price
Oil and gas sector wont have as much of an effect because of their diversification
Earnings estimate = 5% - 8% growth
Risks Weakening oil prices may negatively
affect the company’s oil and gas segment
Diversified Conglomerate
Priceline Group, Inc. (PCLN)Management
Darren Huston, President & CEO• Became CEO in 2014.• Previous CEO of Booking.com.
Jeffery Boyd, Former CEO & Present Chairman of the Board.• CEO from 2001-2013.• Made major acquisitions such as
Booking.com and Agonda. • Built Priceline into what it is today.
Priceline Group, Inc. (PCLN)
Advantages Lower oil prices cause the price of airfare to
decrease, resulting in more people willing to travel and use their products/services
Fair value is higher than PCLN’s stock price Growth in industry because of low oil prices Earnings estimate = 16% - 23% growth Forecasted stock price = $1206 per share
$53 (4.62%) growth per share
Risks Receives much of its revenue from
international markets• Exposes company to foreign exchange
rate fluctuations
Provider of online travel and travel related reservations
“The biggest travel trend for 2015 will be the continuing decline of the price of oil. This is going to have a very big impact on the
travelers– in a good way.”-Dan Wasiolek
The WhiteWave Foods Company (WWAV)Management
Greg L. Engles Chairman of the Board of Directors and Chief Executive Officer
• Chief Executive Officer of Dean Foods Company, a leading beverage company and former parent company of WhiteWave from 1994-2012
• WhiteWave has been the fastest growing food company in the U.S. for the past four yearsunder Engles.
• Delivered year-over-year adjusted earnings per share growth of 36%, excluding investments in their China joint venture, and meeting or exceeding quarterly earnings guidance in every quarter
• Provided oversight to the merger and acquisition strategy resulting in the acquisition and integration of Earthbound Farm and So Delicious Dairy Free, and the successful execution of the China joint venture with China Mengniu Dairy Company Limited
The WhiteWave Foods Company (WWAV)
Advantages Walmart sells Horizon WhiteWave
products Organic foods
• Organic foods industry expect a 16% growth by 2020
Earnings estimate = 16% - 24% growth
Risks More companies can rise to make
organic foods• More competition
Organic foods are currently in, but it has the possibility to fall through.
Consumer packaged food and beverage company. Manufactures plant-based foods and beverages.
Walt Disney Co. (DIS)Management
Robert A Iger, Chairman of the Board and CEO• His strategic vision focuses on three fundamental pillars
1. Generating the best creative content possible2. Fostering innovation and utilizing the latest technology3. Expanding into new markets around the world
• Iger has built on Disney’s rich history of unforgettable acquisitions • Iger has made Disney an industry leader • Iger has many awards
1. Fortune Magazine’s “25 Most Powerful People in Business (2006, 2007)2. Institutional Investor Magazine “Best CEOs” (2008,09,10,11)3. Chief Executive Magazine “CEO of the Year” (2014)
Walt Disney Co. (DIS)
Advantages Movie line-up for 2016 Upcoming season for tourists and
vacationers Upcoming opening of a DisneyLand in
Shanghai Overvalued in the short-term, but in the
long-term will even out Earnings estimate = 13% - 16% growth
Risks Failed movies Evolution of television/changing media
A media conglomerate which include media networks, ESPN, ABC, parks, branded business, entertainment and consumer products.
Estimated growth is 2.54%
2012 2013 2014 2015Net Income $13,641,00
0$13,057,000
$15,233,000
$15,620,618
Total Assets $684,999,000
$656,560,000
$648,349,000
$664,846,907
Total Liabilities $561,973,000
$525,994,000
$529,190,000
$526,983,713
Total Stockholders’ Equity
$123,026,000
$130,566,000
$128,159,000
$137,863,194
2015 ForecastGE
2015 ForecastPCLN
Estimated growth is 10.28%
2012 2013 2014 2015Net Income $1,419,566 $1,892,663 $2,421,753 $2,670,765Total Assets $6,569,742 $10,444,46
0$14,940,563
$16,476,797
Total Liabilities $2,512,480 $3,534,731 $6,373,869 $6,465,833Total Stockholders’ Equity
$3,896,975 $6,909,729 $8,566,694 $10,010,964
Estimated growth is 9.99%
2012 2013 2014 2015Net Income $113,694 $99,041 $140,185 $155,292Total Assets $2,168,011 $2,283,184 $3,372,841 $3,709,865Total Liabilities $1,383,055 $1,321,745 $2,296,354 $2,560,870Total Stockholders’ Equity
$784,956 $961,439 $1,076,487 $1,148,995
2015 ForecastWWAV
Estimated growth is 7.06%
2012 2013 2014 2015Net Income $5,682,000 $6,136,000 $7,501,000 $8,107,837Total Assets $74,898,00
0$81,241,000
$84,186,000
$90,130,915
Total Liabilities $35,139,000
$35,812,000
$39,228,000
$40,950,194
Total Stockholders’ Equity
$39,759,000
$45,429,000
$44,958,000
$49,180,721
2015 ForecastDIS
RiskAnalysis
GE DIS WWAVPCLN S&P 500
Conclusion
We recommend that we buy the stocks Weights:
• GE – 13%• PCLN – 50% • WWAV – 17%• DIS – 20%
Sources
Morningstar Direct Software http://finance.yahoo.com/ http://www.priceline.com/?refid=PLGOOGLECPC&refclickid=D
%3AcBrand10776764420g33020072412&gclid=CM6isZDWmcUCFQGNaQodTIEAbg&query=priceline&kw=priceline&match=e&adp=1t1
http://www.whitewave.com/ https://disneyworld.disney.go.com/special-offers/stay-dine/?CMP=KNC-
WDW15_Q3FreeDine_BR|G|4151300.RR.AM.02.01.OF.Q3FreeDine&keyword_id=sAzch1pRn_dc|waltdisney|43157953780|p|1540wwa14043
http://www.ge.com/ http://www.bls.gov/