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UAB Green and Gold Fund

UAB Green and Gold Fund. General Electric (GE) Buy Presentation September 22, 2011. GE Business Profile. Provides technology and financial services 100 counties served 5 Business Segments: 1. Energy Infrastructure 2. Technology Aviation, Healthcare, Transportation

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UAB Green and Gold Fund

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  1. UAB Green and Gold Fund General Electric (GE) Buy Presentation September 22, 2011

  2. GE Business Profile • Provides technology and financial services • 100 counties served 5 Business Segments: • 1. Energy Infrastructure • 2. Technology • Aviation, Healthcare, Transportation • 3. NBC Universal • 51% stake • 4. GE Capital • Financial services, loans, credit cards • 5. Home and Business Solutions • Appliances

  3. Business Drivers ENERGY: Acquisitions, HD gas turbines, solar power OIL AND GAS: Subsea CONSUMER: Eco trends, “Green” lighting GE CAPITAL: Lower losses, Real Estate Turnaround TRANSPORTATION: Emerging markets, Hybrid Technology AVIATION: Global Airline Strength HEALTHCARE: Global growth

  4. Business Segment BreakdownRevenues (Past and Expected) • GE’s Energy Infrastructure is expected to increase 32.16% over the next two years. • GE Capital is being scaled back. • Technology is expected to increase 20.70% over the next two years. • 21% increase in Aviation • 15.54% increase in Healthcare.

  5. Transformation

  6. SWOT Analysis

  7. Backlog

  8. GE Capital

  9. GE Capital

  10. Stock Price: Buy Low, Sell High

  11. Stock Price

  12. Fundamental Data Detail fundamental data

  13. Valuation Methodology: Target yield / PE Justification: DCF / DDM difficult to apply given significant business changes on the horizon Current Price: $15.93 Bull case: Reference Spreadsheet Dividend 2012E Dividend: $0.71 Target Yield / Price: 3.0% / $29.67 P/E Multiple 2012E EPS: $2.02 Target Multiple / Price: 14.0x / $28.25 Average PT: $28.96 (+81%) 2011 Peak Valuation: Dividend Yield: 2.8% P/E: 15.8x

  14. Valuation: Floor Risk/reward is favorable @ 1:2.5 Downside should be limited to $12 ~1x book value ~5% div yield (assuming no increase from GE Cap)

  15. Portfolio Recommendation • BUY 200 shares of GE at limit of ~$15 ($3,000) • Total position after purchase: 600 shares / 2.1% of portfolio Industrials • Target Sector Allocation: 7.3%, • Current Sector Allocation: 4.9% • Allocation after purchase: 6.3%

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