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Mizzou Investment Fund Management SUMMER REPORT
Past, Present, and Futureof the University of Missouri Investment Fund• 1967- 1980 The Truman Tracy Fund• Arie and Ida Crown Fund• 1991 The Student Portfolio Analysis and Management Fund• 1999 Portfolio management course• 2005 Mizzou Investment Fund Mangement Program • 2006 Robert J. Trulaske, Sr. Endowment • 2008 Ace Greenberg Scholarship
Structure of the Class
Chief Financial Officer Matthew Roman• Portfolio Manager Steven Hinkle • Economist Specialist Nicholas Aiello • External Relation Specialist Brian Stieren
-Webmaster Jeremy Heuermann-Trader Kevin MeKenna- Recorder Justin Atwood
Program Coordinator Andrew Kern
Class Expectations• Hands on experience on managing a real fund • Sustain long run growth • Become actively involved in making informed
decisions for the fund
Restrictive Holdings • Short Positions• Derivative instrument investments• Borrowing/lending• Buying on Margin • No one industry will exceed 20% of total assets• No one security will exceed 5% of total assets
Allowable Holdings • U.S. stocks and bonds• International stocks and bonds• Money Market Instruments• Mutual Funds
Ending Positions• Most Profitable
- Varian Medical Systems - Baxter International Inc.- Wells Fargo
• Least Profitable- International Game Tech- Valero, PLC- Diageo, PLC
Transactions Date Company Ticker Shares Price
Current Price
% ∆ Since Trade
Transaction Cash Flow
6/19/2008 Valero Energy Corp VLO -530 44.08 31.88 -12.2 23,362.40
6/20/2008 Boeing BA 260 74.7499 63.83 -10.9199 (19,434.97)
6/24/2008 Diageo, Plc. DEO 225 73.23 57.59 -15.64 (16,476.75)
7/8/2008 Satyam Computer Service SAY -1000 24.6801 21.1 -3.5801 24,680.10
7/8/2008 International Game Tech IGT -750 23.45 21.1 -2.35 17,587.50
7/8/2008 Cisco Systems CSCO -600 22.64 22.43 -0.21 13,584.00
7/8/2008 Microsoft MSFT -300 26.16 25.86 -0.3 7,848.00
7/8/2008 Hewlett Packard HPQ 300 43.21 43.71 0.5 (12,963.00)
7/8/2008 Gilead Sciences Inc. GILD 200 53.16 54.51 1.35 (10,632.00)
7/8/2008 Western Digital WDC -740 35.03 30.94 -4.09 25,922.20
7/10/2008 Exxon Mobile XOM 400 85.32 81.7 -3.62 (34,128.00)
7/11/2008 NutriStystem NTRI 1000 17.19 16.26 -0.93 (17,190.00)
Total Change in Cash 2,159.48
Reviewed Stocks
Date Company Ticker Action Reviewed
Price Current
Price
% Change since
Review
6/25/2008Caterpillar Inc. CAT Held 77.08 69.53 -9.80%
6/26/2008Monsanto Co. Mon Held 133.08 116.09 -12.77%
7/2/2008 VF Corp. VFC Held 75.71 72.35 -4.44%
7/9/2008Freeport McMoran FCX Held 106.49 96.26 -9.61%
7/9/2008American Express APX None 41.59 36.62 -11.95%
7/15/2008 Ryanair RYAAY None 26.27 34.3 30.57%
7/16/2008Bank of America BAC None 19.54 29.58 51.38%
7/22/2008Whole Foods Market LLC WFMI None 22.53 22.52 -0.04%
7/23/2008Blackboard Inc. BBBB None 40 40.06 0.15%
7/24/2008 Coinstar CSTR None 33.78 33.34 -1.30%
7/28/2008CentryTel Inc CTL None 36.06 36.06 0.00%
Economic Overview Summer 2008• Oil Prices • Mortgage Crisis• Midwest Flooding
Economic Outlook• Oil Prices• U.S. Dollar• GDP • Home Sales
Portfolio Overview• Expectations
- Outperform the S&P 500- Recover before the end of the semester- Purchase below intrinsic value
Portfolio Overview• Sector Allocation Goals
Portfolio Overview • Sector Allocation Results
Company Analysis • General company description
– Includes location, industry, business functions, and key company aspects• Financials
– Ticker, sector, and industry– Ratios and valuations such as; market cap, beta, ROE, ROA, and P/E
• Economic and Industry Evaluation• Break Down of Close Competition• Charts & Graphs
– Company versus S&P, as well as against competitors• Company position within their respected industries• Risks associated with investment• Recent news• Recommendation
Example of Company Analysis
RyanAir
Buffett Analysis • Find Discount Rate and Owners Earning
Buffett Analysis• Find the Present Value of Owner’s Earnings
Year 2008 2009 2010 2011 2012
Prior Year Owner Earnings
$ 54,121,000.0
$ 60,615,520.0
$ 67,283,227.2
$ 74,011,549.9
$ 80,672,589.4
First Stage Growth Rate (add) 12.0% 11.0% 10.0% 9.0% 9.0%
Owner Earnings $ 60,615,520.0
$ 67,283,227.2
$ 74,011,549.9
$ 80,672,589.4
$ 87,933,122.5
Discounted Value per annum $60,615,520.0 $60,052,648.2 $58,959,012.1 $57,359,062.6 $55,802,530.4
Sum of present value of owner earnings $292,788,773.2
Buffett Analysis• Find Intrensic Value per Share
Residual Value
Owner Earnings in year 5 $ 87,933,122.5 Second Stage Growth Rate (g) (add) 3.00%
Owner Earnings in year 6 $ 90,571,116.1
Capitalization rate (k-g) 9.04%
Value at end of year 5 $ 1,001,848,548.00
Present Value of Residual $567,451,593.41
Intrinsic Value of Company $860,240,366.59
Shares outstanding assuming dilution 27930000
Intrinsic Value per share $30.80
Website • http://business.missouri.edu/IFMProgram/index.php
Question and Answer Secession