First Group



Sector Outlook

1. Submit a hard copy to the instructor by the due date.

2. Email the presentation to sim@fisher.osu.edu for posting on the web site.

3. Dress for the presentation is business professional.

4. Presentation should be a maximum of 15 minutes (plus Q&A).

5. Grades will be based on the team performance.

a. It is OK if some team members do not speak during the presentation.

b. Let me know if a team member is not doing his/her part to help the team.

Format:

Overview

• What is the size of the sector? As a percent of the S&P 500?

• What are the various industries within the sector?

• What are the largest companies in the sector?

• How has your sector performed year-to-date/quarter-to-date?

Business analysis

• Analyze demand by reviewing

o Phase of the life cycle

o Classification by business cycle

▪ How will your projections be influenced by the US economy? Foreign economies?

o External factors

o The user and geography

o Input/output analysis

o Etc.

• Analyze supply by reviewing

o New capacity additions

o Etc.

• Profitability and pricing by reviewing

o The interaction of supply and demand

o Product segmentation

o Industry/sector concentration

o Ease of entry

o Strength of customers, suppliers

o Competition

o Substitution

o Etc.

Economic analysis

• Regression analysis is often useful for sectors/stocks that are highly correlated to a particular economic (or other) data statistics. For example, oil prices and Energy stock prices are highly correlated.

Financial analysis

• What are the sales and earnings growth rates of the sector, industry, major companies? How do these rates compare to history?

• Other

o What are margins? Operating? Net? R&D as a percent of sales? ROE? Turnover? Etc.

o How do current and future margins compare to the past?

o Is the sector a net user of cash or does it generate free cash flow?

o Are margins expanding, contracting, or remaining the same? Versus the market (e.g. S&P 500)

o Etc.

Valuation analysis (assignment #4)

• Consider P/E, P/S, P/B, P/CF, etc.

• Does valuation vary widely across the sector from industry to industry and company to company?

• Consider the P/E, P/S, P/B, P/CF, etc. of the sector and industries versus the market

• If the relative valuations (above) have expanded/contracted over the years then tell us why

• Do you think that valuations will expand, contract or remain the same for this group? Versus the market? Why?

• What does technical analysis (i.e. the charts) suggest? (e.g. is support/resistance forming, do you see trends?, etc.)

Recommendation

• Should the SIM portfolio over or underweight the sector relative to the S&P 500?

• What are the major positives that you foresee and the biggest risks to your recommendation?

• Within your sector, which industries would you over and underweight versus the S&P 500? Why?

Class Vote

• Majority rules.

Helpful Tip:

Review the prior quarter presentations on the web site for help with format and ideas.

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download