Presentation Transcript

1. Meeting Agenda Announcements Market Discussions Lecture: Valuation Methods Portfolio Update Pitch: AIG Important Dates
2. Announcements
3. Announcements
4. Announcements
5. Announcements
6. Announcements
7. Announcements Free Wall Street Journal digital access for paid members Contact treasurer@usiteam.org to receive login information
8. Announcements Fall Portfolio Challenge Build and manage your own virtual portfolio Compete with other McCombs students Top three winners receive prizes in January $5 entry fee Register at usiteam.org/events
9. First USIT Social Ultimate Frisbee When: Tuesday 8:30 pm Where: South Mall Cost: Free!
10. Announcements The Suggestion Box
11. Announcements Workshops Every Thursday 7-8PM SAC2.120 Topic this week: Projecting Operating Results
12. Market Update Why is Obamacare involved? Why did it shutdown? What’s the hold up?
13. What happened to the debt ceiling?
14. Market Update
15. Market Update
16. Market Update Credit card debt is down $883M for August (seasonally adjusted) Less credit card debt > less spending on stores and restaurants Non-revolving debt is up $14.5B for August More non-revolving debt means more spending on things like student loans and car loans
17. Market Update- Twitter
18. Market Update- Twitter $2.16 per timeline view $.30 per timeline view Other Key Stats: 65% revenue from mobile 2011-2012 Revenue growth of 198% EBITDA growth of 149% Net loss decreased 36%
19. Market Update- Tweeter

20. Company Valuation

    Andrew Smith
21. Two primary ways Intrinsic Relative Public company comparables Precedent transaction DCF
22. Relative valuation Comps Assemble peer universe Spread the comps Make ratios EV/EBITDA P/E Industry specific ratios 4. Benchmark to see if over/undervalued
23. Relative valuation Precedent transaction Look at past deals to see what ratios other similar companies were bought at Ex: 10x EBITDA
24. Problem? Pros Cons Market driven so the market environment in which you’re taking comps has direct effect on your result Market driven comparison and not subject to assumptions like DCF
25. Problem? Pros Cons Market driven so the market environment in which you’re taking comps has direct effect on your result Market driven comparison and not subject to assumptions like DCF Fixed by using intrinsic valuation
26. Intrinsic valuation - DCF
27. Intrinsic valuation - DCF The value of a company is the present value of its future cash flows.
28. DCF more detail Projections Revenue Free cash flow
29. DCF more detail To estimate cash flows after 2016 Discount rate
30. DCF more detail EV/fully diluted shares outstanding = Value per share
31. Portfolio Update
32. Portfolio Update
33. FanyuMeng Niraj Parekh Matthew Rindelaub Connor Ruddick NicTacha Jeffrey Toobi
34. INVESTMENT THESIS Undervalued/ Oversold Well-Established Presence Rising Interest Rates Improving Housing Market

35. COMPANY OVERVIEW

36. American International Group, Inc.
37. Revenues & Growth Premiums, fees, investments Interest rates & reinsurance Housing Market

38. INDUSTRY OVERVIEW

39. Porter’s Five Forces
40. The Insurance Industry Insurance services for: Commercial Institutional Independent Primary Services: Property Casualty Life and Retirement Investment and Banking Services Reinsurance
41. Primary Competitors Commercial Largest in the US and Canada Focused on Property Casualty Largest in the US Largest US based in Europe Largest foreign insurer in Japan & China 1st to market in many developing nations

42. RISKS AND MITIGANTS

43. Risks and Mitigants

44. FINANCIAL VALUATION

45. Comparables Analysis
46. Book Valuation
47. CONCLUSION
48. Pitch Team Sign-Ups www.usiteam.org/membership
49. Important Dates Thursday, October 10, 6-8PM- SCG Workshop #3 Saturday, October 12: Last day to register for TXSP www.usiteam.org/events Saturday, October 19: Texas Stock Pitch Competition