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Friday February 21 st , 2014. Lafayette College Investment Club. Meeting Agenda. 1) Market Update 2) AT&T Pitch (BUY T, SELL VZ) 3) Financial Statement Overview 4) Announcements. Market Update. By: Chris Ulyett and Ryan McCormick. Buy American. Many analysts predict “Made in the U.S.A.”

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friday february 21 st 2014

Friday February 21st, 2014

Lafayette College Investment Club

meeting agenda
Meeting Agenda
  • 1) Market Update
  • 2) AT&T Pitch (BUY T, SELL VZ)
  • 3) Financial Statement Overview
  • 4) Announcements
market update
Market Update

By: Chris Ulyett and Ryan McCormick

buy american
Buy American
  • Many analysts predict “Made in the U.S.A.”
  • Three Reasons
    • China’s Economy
    • U.S energy independence
    • Skills and innovation
labor market
Labor Market
  • U.S. workers are slowly getting bolder and shedding caution
  • Quitting rate reported at 1.8% November 2013
  • Average quitting rate is 2.1%
  • Most Recent low in quitting rate 1.2% in September 2009
suspension of debt ceiling
Suspension of Debt Ceiling
  • Extends the government\'s borrowing authority until March 2015
  • The first time since 2009 Congress has passed a "clean" debt limit.
farm bill
Farm Bill
  • Added insurance for agriculture sector
  • $7 Billion in aid for ranchers and farmers nation wide
  • $8 billion cut to food stamps
changes at coca cola
Changes At Coca Cola
  • CFO Gary Fayard will retire
  • To be replaced by veteran Kathy Waller
  • Waller announced $1bn cut in costs this year in response to down quarter
market
Market
  • Ends at week high in DOW and S&P 500
  • DOW gained 0.6%
  • S&P 500 gained 0.6%
  • Eurofirst 300 gained 0.01%
  • Shanghai dropped 0.18%
  • Gold down 0.3% to $1,317
buy at t dump verizon

Buy AT&TDump Verizon

NYSE: T, VZ

Industry: Telecom Services

company descriptions
Company Descriptions
  • Multinational broadband & telecommunications
  • Operates in wireless, wireline, broadband television subscription
  • Share an oligopoly with each other
performance in sector
Performance in Sector
  • Combined AT&T and Verizon dominate the mobile wireless and broadband market.
  • FCC reports that the companies enjoy 60% of revenue
so why sell verizon vz
So, why sell Verizon (VZ)?
  • Overvalued.

P/E (ttm) of 12.03 (but isn’t this good? Not in this case!)

  • Investing too much in wireless market. Single focused.
  • Only owns 55% of its most lucrative division VZ Wireless
  • Get out now, yield benefit.
  • VZ (FiOS) is underperforming to keep up with AT&T (U-Verse) wireline
overview why invest in at t
Overview: Why Invest in AT&T?
  • AT&T invested in future growth.
  • Long-term dividends!

“Our dividend is clearly a sacred matter for us.” CFO John Stephens

  • Dominant in wireline business (broadband and video offerings).
  • Forward thinking management team: overseas investments.
the numbers why invest in at t
The Numbers: Why Invest in AT&T?
  • 29 consecutive years of increased dividends. Now at 5.6%
  • CEO Randall Stephenson has a vision for growth in European market
  • Currently stock is discounted because VZ is perceived to have stronghold.
  • Expected 6.5% earnings growth.
  • Trading at lower P/E (ttm) ratio (9.79) and higher yield than Verizon
financial statements

Financial Statements

Othman Guennoun

Irvin Cedillo

February 14th, 2014

the 4 financial statements
The 4 Financial Statements
  • Income Statement
  • Statement of Retained Earnings
  • Balance Sheet
  • Statement of Cash Flow
  • They all flow into one another
why are they used
Why are they used?
  • Important reasons:
    • Show performance
    • A mean for investors to measure a company
    • Helps the managing team make important decisions
the income statement
The Income Statement
  • Basic Formula:

Revenues – Expenses = Net Income or Net Loss

the statement of retained earnings
The Statement of Retained Earnings
  • Basic Formula:

Beginning Retained Earnings + /– Net Income – Dividends Declared = End Retained Earnings

  • Net Income from the Income Statement
the balance sheet
The Balance Sheet
  • Other name: Statement of Financial Position
  • Snapshot of a company on a specific day
  • Basic Formula:

Assets = Liabilities + Stockholder’s Equity

slide22

Assets: Economic resources to benefit the future of the company

Current: Cash, Supplies, Inventory

Non Current: Land, Equipment, and Buildings

  • Liabilities: The company’s debt

Current: needs to be paid back within a year

Long Term: over a year

  • Equity: Retained Earnings, Common Stock, APIC
statement of cash flow
Statement of Cash Flow
  • Operating Activities
  • Investing Activities
  • Financial Activities
  • Shows what the company is doing throughout years.

Expand?

  • Net Income in all 4 statements
ratios
Ratios
  • Current Ratio
  • Use ratios to compare companies (competitors)
important announcements
Important Announcements
  • 1) Potential Speakers coming ….
    • Bennett Goodman
    • Charles Chesebrough

2) Fleece Trivia Contest

    • Currently designing a trader like fleece to be given to select students who answer correct questions

3) Board Meetings Will Be held in 12:15 Simon Lobby

    • If you would like to be added to chain email please see me after meeting (board or member)

4) For next week look at BAC we are going to pitch a sell

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