Sector Outlook
1.
Submit a hard copy to the instructor by the due date.
2.
Email the presentation to sim@fisher.osu.edu
for posting on the web site.
3.
Dress for the presentation is business professional.
4.
Presentation should be a maximum of 15 minutes (plus Q&A).
5.
Grades will be based on the team performance. a.
It is OK if some team members do not speak during the presentation. b.
Let me know if a team member is not doing his/her part to help the team.
Format:
Overview

What is the size of the sector? As a percent of the S&P 500?

What are the various industries within the sector?

What are the largest companies in the sector?

How has your sector performed year-to-date/quarter-to-date?
Business analysis

Analyze demand by reviewing o Phase of the life cycle o Classification by business cycle
 How will your projections be influenced by the US economy? Foreign economies? o External factors o The user and geography o Input/output analysis o Etc.

Analyze supply by reviewing o New capacity additions o Etc.

Profitability and pricing by reviewing o The interaction of supply and demand o Product segmentation o Industry/sector concentration o Ease of entry o Strength of customers, suppliers o Competition o Substitution o Etc.

Economic analysis

Regression analysis is often useful for sectors/stocks that are highly correlated to a particular economic (or other) data statistics. For example, oil prices and Energy stock prices are highly correlated.
Financial analysis

What are the sales and earnings growth rates of the sector, industry, major companies? How do these rates compare to history?

Other o What are margins? Operating? Net? R&D as a percent of sales? ROE? Turnover? Etc. o How do current and future margins compare to the past? o Is the sector a net user of cash or does it generate free cash flow? o Are margins expanding, contracting, or remaining the same? Versus the market (e.g. S&P
500) o Etc.
Valuation analysis (assignment #4)

Consider P/E, P/S, P/B, P/CF, etc.

Does valuation vary widely across the sector from industry to industry and company to company?

Consider the P/E, P/S, P/B, P/CF, etc. of the sector and industries versus the market

If the relative valuations (above) have expanded/contracted over the years then tell us why

Do you think that valuations will expand, contract or remain the same for this group? Versus the market? Why?

What does technical analysis (i.e. the charts) suggest? (e.g. is support/resistance forming, do you see trends?, etc.)
Recommendation

Should the SIM portfolio over or underweight the sector relative to the S&P 500?

What are the major positives that you foresee and the biggest risks to your recommendation?

Within your sector, which industries would you over and underweight versus the S&P 500?
Why?
Class Vote

Majority rules.
Helpful Tip:
Review the prior quarter presentations on the web site for help with format and ideas.