Presentation Transcript

1. Haley Large Cap Fund

   Sector Captain Presentations
2. Real Estate Investment Trusts Consumer Durables Kevin Hylinski Sector Captain Presentation
3. Real Estate Investment Trusts Consumer Durables Liberty Property Trust PS Business Park Annaly Capital Management Redwood Trust Hatteras Financial Boston Properties Digital Realty Duke Realty Corporation Highwoods Property Douglas Emmett Brandywine Realty Trust Biomed Realty Trust Franklin Street Equity Residential UDR Inc Apartment Investments BRE Properties Home Properties American Campus Equity Lifestyle Mid-America Apartments Simon Property Federal Realty Investments Regency Centers Realty Income Alexander’s Inc Host Hotels & Real Estate Ventas Inc Health Care REIT Plum Creek Timber Garmin LTD Whirlpool Corporation Tupperware Brand Homebuilders: Pulte Homes Inc DR Horton Inc Lennar Corporation
4. Real Estate Investment Trusts A few REITs do look attractive in the SMF model Time-line => Current Market Corporate Bankruptcies (69% 1Q 2009, 35% 2Q 2009) “Extend and pretend” - Capmark Vacancy (12.5% 2Q 2007 and 16.5% 3Q 2009) Rental Rates Cap Rates = NOI/Value (5% vs. 10%) Shorter Lease Terms
5. Consumer Durables Home Builders Cost of Goods Sold (95% - 115% of sales 2Q 2009) Housing Market Lending Garmin ($30.90) Undervalued by almost 50% (SMF model) S+P Fair Value $42.60 (37.86%) Strong Balance Sheet No Debt $1 billion cash Doubled R+D spending over the past 2 years ROIC of 20%+ over the past 10 years Entered the smart phone business - Nuvifone - AT&T
6. Energy and Internet Sector Presentation
7. Energy Alpha Natural Resources Chesapeake Energy Consol Patriot Coal Southwest Energy CVR Energy Danbury
8. Internet Priceline Amazon
9. What we went with Priceline Denbury
10. Priceline Increasing Sales International Exposure (2/3rds of gross profits) Low Capex Growth pipeline into emerging areas Dubai Singapore Growth – USA online penetration is only 36% vs Europe 29%
11. Denbury Strong Sales growth ( ~30% ) Strong in the Gulf Coast Volatility might be a problem Projecting 10% growth still value of ~$19 as compared with $15 currently
12. Companies that Failed Arch Coal Chesapeake Patriot Natural Resource Partners
13. Brendan Kearney Sector Presentation
14. Microsoft (MSFT) Model: 36.25 Actual: 28.68 Industry: Systems Software MSFT dominates the market and should continue to do so Windows 7 recently released, sales boost
15. Colgate (CL) Model: 78.37 Actual: 77.42 Industry: Household Products Solid / stable company – even in downturn Demand for household products relatively static
16. Carpenter Tech (CRS) Model: 54.11 Actual: 21.37 Industry: Steel Good prospects as economy turns around Specialty metals producer Closely tied to aerospace / energy / consumer industries
17. Nucor (NUE) Model: 185.57 Actual: 43.28 Industry: Steel Cyclical company Good growth prospects – largest US steelmaker, 20% of US mkt, relatively diverse product set Easing downward pressure on sale of steel products
18. Southern Copper (PCU) Model: 35.58 Actual: 34.76 Industry: Metals & Mining Good growth prospects, strength is in copper As economy picks up, so will global demand for copper – particularly in China
19. Emcor (EME) Model: 45.54 Actual: 25.46 Industry: Construction and Engineering Low cost of D, conservative growth outlook, faring better than competitors Gradual rebound in energy projects as prices improve Increased infrastructure activity as result of stimulus packages
20. Patterson-UTI (PTEN) Model: 39.37 Actual: 16.63 Industry: Oil & Gas Drilling Primarily provides contract drilling 2nd largest operator of land-based drilling rigs 3rd most active rigs in industry Con: Sensitive to natural gas prices 80% of land drilled in US is for natural gas
21. Oil States International (OIS) Model: 68.91 Actual: 37.30 Industry: Oil & Gas Equipment and Services Segments: Well Sites, Offshore Products, Tubular Services Expectations of continued oil consumption + thin spare capacity = good business
22. Security Analysis Bob Goslin Costco Wholesale Corp.
23. Company Background Membership warehouse club Similar to Sam’s Club and BJ’s Wholesale Product mix: Fresh food Packaged food Sundries (candy, snack foods) Hardlines (appliances, electronics, etc.) Softlines (apparel, housewares, furnishings)
24. Performance Annual sales growth (last ten years): Average: 9.3% Historic sales growth: 2006: 13.63% 2007: 7.91% 2008: 11.67% 2009: -1.43%
25. Upside Superior supply-chain management High rate of asset turnover High membership renewal and sign-up rates Expected increase in market share
26. Downside Profitability highly dependent on diesel fuel prices Retail industry highly competitive Entire industry engaged in pricing wars Target’s move to “Low Value Everyday” pricing model
27. Evaluation Appears to be accurately valued Only Costco is outperforming S&P 500 Last price Costco 60.40 Wal-Mart 52.90 Target 50.11 BJ’s 36.59
28. Recommendation Cautious Buy: Correlation to Walmart’sQ3 earnings ?? Expected release of Costco’s next quarterly earnings on December 11 Same-store sales returned to positive territory in September and October