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Finance & Investment Club

Finance & Investment Club . Team: Value-Seekers. DuPont The miracles of science. Team Components: Fund Manager: Charles Chen Senior Analyst: Christina Lam Senior Analyst: David Do. Basic Information. Ticker: DD Exchange: NYSE Industry: Chemicals – Major Diversified

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Finance & Investment Club

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  1. Finance & Investment Club Team: Value-Seekers

  2. DuPont The miracles of science • Team Components: • Fund Manager: Charles Chen • Senior Analyst: Christina Lam • Senior Analyst: David Do

  3. Basic Information • Ticker: DD • Exchange: NYSE • Industry: Chemicals – Major Diversified • Sector: Basic Materials • 52-week High: $53.35 (7/18/2007) • 52-week Low: $42.58 (12/19/2007) • Current Price: $48.95 (5/20/2007) • Dividend Yield: 3.3%

  4. Corporate Information • du Ponts family founded the company on July 19, 1802 • Company focuses on innovation • 34,000 patents and intellectual property • More than 25 awards since 2002 • Major Products: • Nylon • Kevlar • Teflon • Currently, focused on producing • 1) better seeds • 2) better machines that measure food quality

  5. 5 Markets of Concentration • Agriculture & Nutrition • Coatings & Color Technologies • Electronic & Communication Technologies • Performance Materials • Safety & Protection • Pharmaceuticals

  6. Agriculture & Nutrition • $6.8 billion in sales for 2007 • 13.15 EBT Margin • Subsidiary: • Pioneer Hi-Bred International: seed technology • Hybrid seed corn and soybean seed • Expect high growth

  7. Coatings & Color Technologies • $6.6 billion in sales in 2007 • EBT Margin: 12.73% • Titanium tetrachloride business has moved from startup to growth stage • Modest growth • Emerging market growth • Pricing conditions • Competitive environment

  8. Electronic & Communication Technologies • 3.8 billion in sales for 2007 • EBT Margin: 15.63% • Products range from organic circuit materials to products for advanced displays • Moderate Growth • PFOA (Perflorooctanoic acid) might be carcinogenic

  9. Performance Materials • $6.6 billion in sales for 2007 • EBT Margin: 9.48% • Products used in electrical, electronics, packaging, construction and consumer durable goods markets • Sluggish Growth • Weak North American market • Reduction of fixed costs

  10. Safety & Protection • $5.6billion in sales for 2007 • EBT Margin: 21.41% • Provide solutions to make life safer, healthier, and more secure • Kevlar • High Growth • Foreign markets

  11. Pharmaceuticals • EBT: 949million • Works closely with Merck to develop drugs • Cozaar and Hyzaar • Earnings decline • Patent terminations

  12. Management Outlook • Over 60% of sales were to customers outside of the US • Achieved 18% growth in the emerging markets of Europe, Asia Pacific, and Latin America • Optimistic: Revenue growth in emerging markets • Concerns: • Weak US housing • automotive markets • Rising energy prices

  13. Technical Analysis Confirmation? Uptrend Neckline

  14. Financial Analysis

  15. Industry Performance

  16. Competitors Analysis

  17. Competitors Analysis

  18. Recommendation • HOLD • The Bad: • Technical Analysis seem to imply a coming downtrend • Business is very susceptible to economic environment • Expiring patents • Possible lawsuits • The Good: • Very good fundamentals • Diversified business model

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