1 / 18

Information Technology Stock Presentation Finance 724/824 SIM Class Summer 2009

Information Technology Stock Presentation Finance 724/824 SIM Class Summer 2009. Russell Kolmin Zachary McAllister Paul Melko Mahavir Sanghavi Daniel Schuerman. Agenda. Agenda. Current Holdings Sector Recommendation Recommendation An Omen about Oracle A Bite of Apple Into the Big Blue

tacey
Download Presentation

Information Technology Stock Presentation Finance 724/824 SIM Class Summer 2009

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Information TechnologyStock PresentationFinance 724/824SIM ClassSummer 2009 Russell Kolmin Zachary McAllister Paul Melko Mahavir Sanghavi Daniel Schuerman

  2. Agenda Agenda • Current Holdings • Sector Recommendation • Recommendation • An Omen about Oracle • A Bite of Apple • Into the Big Blue • Recommendation

  3. SIM Portfolio Composition SIM Portfolio Composition Sector recommendation: Reduce IT holdings by 69 basis points.

  4. SIM Weightings Relative S&P 500 SIM Weighting Relative S&P

  5. SIM Portfolio Composition IT Recommendation

  6. Reduce Oracle • Oracle is nearing 5% of all SIM holdings. • Oracle has shown recent and remarkable increases. • Oracle will continue to do so in the future. • Time to reap some value. • Reduce Oracle Corporation to 4% (sell 92 basis points)

  7. Sell Apple– Company Profile • A computer hardware/software company with revenue from: • Personal Computers • Small Business Computers • iPods • iPhones • Music Sales • Americas, Europe, Japan, Retail • Incorporated in 1977 • Symbol - AAPL

  8. Sell Apple– DCF Assumes Revenue of Growth: 20% Assumes Margins of: 17%

  9. Sell Apple– Valuation

  10. Sell Apple– Pros/Cons • Pros to Selling • Overvalued based on DCF and Valuation • Microsoft Windows 7 comes out in October • Sales dependent on trendy products • Good run in 2009 • Other options with better value • Cons to Selling • $27 cash per share • Growth of the iPhone and continued phone/network development • If Apple is able to continue revenue growth through new products or sales in emerging markets large gains will be missed

  11. Buy IBM • A Diversified Computer System with revenue tied to • IT infrastructure and business process services • Consulting and systems integration • Computing & storage solutions, including servers, disk & tape storage systems & software • Info Mgmt, integration, intelligence, security, storage, & collaboration software • commercial financing to dealers and remarketers of IT products • Founded 1910 • Symbol - IBM

  12. Buy IBM – DCF Assumes Revenue of Growth: 6% Assumes Margins of: 16%

  13. Buy IBM – Valuation

  14. Buy IBM – Pros/Cons Pros Mature stock with large growth potential Focus on high margin products (i.e. services, integration) 1.80% Dividend Yield Cash On Hand = $12.5B Cons Debt ($96B in Tot Liabilities…$42B CL vs $49B CA) Removing GW and Intang Assets leads to TL > TA Similarities/Competition with HP Up 17.6% since July 10th (Overbought??)

  15. SIM Portfolio Composition IT Recommendation

  16. Appendix

  17. Microsoft • There shall not be any action taken upon Microsoft this quarter • However it should be noted that the SIM weight is approaching 5%, therefore the next quarter should look into cutting back • Microsoft appears to have an upside of about 32.3%

  18. Other Stocks Considered • FLIR • GOOG • ERTS • ADBE • HRS • RHT • PEGA • PCLN • WEBMD • CRM • VRSN • TSRA

More Related