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THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION DISCUSSED DURING HAWKTRADE MEETINGS.

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Presentation on theme: "THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION DISCUSSED DURING HAWKTRADE MEETINGS."— Presentation transcript:

1 THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION DISCUSSED DURING HAWKTRADE MEETINGS. Past performance does not guarantee future results. Investment returns and principal value will fluctuate, so that investors' shares, when sold, may be worth more or less than their original cost. Investing in any financial instruments does not guarantee that an investor will make money, avoid losing capital, or indicate that the investment is risk-free. There are no absolute guarantees in investing. HAWKTRADE and its members do not bear any responsibility for losses or gains made by members trading on their personal accounts based on analysis from HAWKTRADE meetings.

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5  Mason O’Neill – Infinera Corporation  INFN – 10.52%

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8 Twitter

9 Fundamental Analysis 101

10  A method of evaluating a security that entails attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors. Fundamental analysts attempt to study everything that can affect the security's value, including macroeconomic factors (like the overall economy and industry conditions) and company-specific factors (like financial condition and management).evaluating

11  A methodology of observing influential factors and drivers from a broader spectrum and narrowing in to company specific drivers.  Economic Factors: GDP growth, Consumer Confidence, Employment  Industry Factors: Current Trends, Competition, Regulation  Company Factors: Operating Margins, Revenue Mix, Free Cash Flow

12  Real GDP is the market value of all goods and services produced in a nation during a specific period of time.  Indicator of economic health and stability, often times influencing Federal Reserve’s monetary policy.

13  CPI measures the changes in the prices of goods and services by urban consumers in a specific time period (monthly).  It is the best gauge of inflation in the economy and often drivers monetary policy.  It is important to understand what CPI is doing to identify whether COGS is moving from supply/demand imbalance, and what true returns are.

14  Provides current unemployment rate, as well as jobs added for the previous month.  Survey of roughly 300,000 establishments across 600 industries, account for approx. 1/3 of all payroll employees.  It is important because it gives insight into current wages earned and labor costs, while also providing overall view of the strength of the labor force and economy.

15  Money Supply (M2)  Consumer Confidence Survey  Producer Price Index (PPI)  Housing Starts

16  Bloomberg Economic Calendar - mic-calendar/ mic-calendar/  U.S. Department of Labor – bls.gov/ces/home.htm  U.S. Department of Commerce – census.gov/cgi-bin/briefroom/BriefRm

17  Life cycle – important to understand the whether or not it is a mature industry: proven demand, barriers to entry, excess to capital markets  Business cycle – link to the overall economic cycle, seasonality of business, revenue mix according to interest rates

18  Technology – does the industry introduce new technology, is it in danger of being obsolete from new tech  Government – effect of government regulation on supply chain, consumption, safety/employee benefits  Social Changes – convenience of platform, lifestyle changes, health concerns  Demographics

19  Natural resources used in production of products.  Supply/Demand relationship.  Interest rates on financing activities.  Union costs and wage increases.

20  P/E Ratio  Dividend Yield  P/B Ratio  EPS  Debt Levels  Operating Margins  Revenue Mix  Market Share

21  IBIS World – edu/  S&P NetAdvantage – com.proxy.lib.uiowa.edu/NASApp/NetAdvan tage/index.do  Yahoo Finance  Bloomberg

22  Product Lines – current demand for products, revenue mix  New Products – potential growth of new products  Customer Base – the customers that are likely to buy their products (income distribution, geographic, lifestyle, gender)  Marketing Strategy

23  Competitive Environment – how many players, market share, diversification, barriers to entry, life cycle  Comparative Analysis – operating margins, revenue mix, debt levels, shareholder policy, pricing ratios

24  Free Cash Flow Generation  Dividend Yield  EBITA/EBITDA/EBITDAR margins  Revenue Mix  Cash  Debt Levels  Operating Expenses

25  Every publicly traded company must report financial statements to the SEC.  10K – annual report of financial operations of the company  10Q – quarterly report of financial operations of the company  SEC – sec.gov  Thompson One - https://www.thomsonone.com/Workspace/Main.aspx?View=Action%3dOpen&BrandName=ww w.thomsonone.com&IsSsoLogin=True

26 Banking

27  Moderate growth in recent history, but expected to improveimprove  Consumers are still mending their eroded trust post financial crisis  In the period between European and Asia- Pac banks outpaced domestic growth  Very competitive, many institutions offer the same core services  Banks, thrifts, credit unions, investment banking firms, brokerage fees etc.  Some product differentiation in terms of specialized services and fees

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30  Interest Rates Interest Rates  The banking industry is extremely sensitive to interest rate fluctuations  The majority of a banks revenue comes from assets (loans) on their balance sheet  Gap  The difference between a banks assets and liabilities  A positive gap generates profits during periods of high interest rates  Capital Adequacy  Banks are required to have certain types of capital in reserve in the case of an adverse scenario  Banks can either issue new equity or shrink balance sheets to increase capital

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32 Litigation Expense  Banks are still paying off the settlements that came after the crisis  Bank of America (BAC) reported $5.6 billion in litigation cost(BAC)  JP Morgan Chase & Co (JPM) had an unexpected $1 billion legal expense (JPM) Earnings Season  The “big banks” reported earnings last week  Bank of America  Citigroup  JP Morgan Chase  Wells Fargo  Goldman Sachs  Morgan Stanley  Results were positive overall

33  Financial holding company involved in a myriad of services  Reported net income of $5.57 billion Reported  Increased fixed income revenues due a volatile September  Mortgage business profit tumbled, down $266 million from prior year

34  Three operating segments  Community banking  Wholesale Banking and Wealth  Brokerage and Retirement  Earnings of $5.7 billion meet expectations Earnings expectations  Returned $3.6 billion to shareholders through stock buybacks and repurchase agreements  Strong revenue diversification

35 Producer Price Index, Retail Sales and Housing Starts

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37  Measures inflation from the perspective of the seller  Has been very low, even turning negative  Decreased by.1% when analysts expected an increase

38  Declined.3% in September  Number was drug down by low auto and gasoline sales  Core still decreased by.1% after removing the gasoline and auto components

39  A “housing start” is registered at the start of construction of a new primarily residential building  Multi family component up 16.7%  Single family component up 1.1%


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