Friday february 21 st 2014
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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

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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


Friday february 21 st 2014

  • 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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