Shavkat Nasirov, Jon Misny, Justin Oblak, Eric Zimmerman
Sector
S&P 500 Weight
SIM Weight
+/-
Consumer Discretionary
10.55%
10.44%
-0.11%
Consumer Staples
10.91%
11.71%
0.80%
Energy
11.18%
9.76%
-1.43%
Financials
16.47%
11.41%
-5.07%
Health Care
11.55%
14.63%
3.07%
Industrials
10.76%
13.10%
2.34%
Information Technology
18.91%
20.18%
1.27%
Materials
3.45%
1.64%
-1.82%
Telecommunication Services
2.73%
3.70%
0.98%
Utilities
3.48%
2.10%
-1.38%
Cash
0.00%
1.26%
1.26%
Dividend Receivables
0.00%
0.08%
0.08%
The Industrials sector weight in the SIM portfolio will remain
unchanged from its previous weight of 13.1%.
We remain cautiously optimistic about the performance of our sector.
 Sell all 249 bp of
 Hold 363 bp of
 Hold 371 bp of
 Hold 346 bp of
 Buy 249 bp of




Recommendation: HOLD
Current Price: 50.06
Target Price: 60.00 (20% Upside)
Recent Developments:
 Tax on profits of Australian mining companies threatens to decrease
demand
 Chinese demand for coal strong and this trend should continue into
the near future
 Eurozone crisis not a large threat because internationally, emerging
economies drive most of demand




Recommendation: HOLD
Current Price: 66.00
Target Price: 90.00 (36% Upside)
Recent Developments
 Defense spending expected to decline in near future.
 Withdrawal from Afghanistan and Iraq expected to decrease demand
for new defense contracts.
 Robert Gates keeps questioning current contracts that have gone over
allotted budgets.




Recommendation: HOLD
Current Price: 34.23
Target Price: 50.00 (47% upside)
Recent Developments:
 Recent large sale of shares by top executives
 Similarly to GD, defense spending cuts will affects sales negatively
 Current market downturn hitting industrials the hardest

Freight forwarding
 Purchases uncommitted capacity from ocean
liners and aircrafts
 Solicits clients to fill this capacity

Contract logistics
 Warehousing and distribution of goods
 Consulting and business specific supply chain
solutions
Airfreight forwarding
Ocean freight forwarding
Customs brokerage
Contract logistics
Distribution
Other
TOTAL
Net Revenues
Labor
Depreciation
Other
Interest
Taxes
Net Income
Revenue
33%
25%
3%
18%
12%
9%
100%
38%
21%
1%
13%
1%
1%
1%
Costs
25%
20%
4%
8%
5%
62%
Net Revenues
8%
5%
3%
14%
4%
4%
38%

Relative to Airfreight & Logistics Industry
FY
Revenue Growth
2013E
Airfreight Forwarding
25.00%
Ocean Freight
Forwarding
25.00%
Customs Brokerage
16.00%
Contract Logistics
25.00%
Distribution
15.00%
Other
15.00%
Total 22.81%
FY
FY
FY
FY
FY
FY
2012E 2011E 2010A 2009A 2008A 2007A
11.00% 16.80% -26.75% 4.38% 21.81% 14.55%
11.00%
11.00%
8.00%
8.00%
8.00%
9.87%
16.80%
13.00%
12.00%
8.00%
10.00%
14.17%
-25.95% 9.31% 17.45% 13.50%
-15.52% 11.63% 13.80% 6.55%
-1.95% 7.28% 29.60% 16.74%
-26.55% -9.53% 13.84% 234.04%
-13.20% 2.68% 66.05% 22.67%
-21.48% 4.06% 23.06% 27.85%
FY
FY
FY
FY
FY
FY
FY
FY
2013E
2012E 2011E 2010A 2009A 2008A 2007A 2006A
Shares
101,458 101,458 101,458 101,458 99,407 100,172 99,562 98,042
Diluted EPS
1.41
0.95
0.70
0.41
(0.05)
0.99
1.04
0.55
consensus
1.41
0.94
0.70
EPS Growth
49%
35%
74%
n/a -105%
-5%
89%
Five Year Historical
Growth Rate: -1%
Long-Term Future
Growth Rate: 15%
Major Regions
Freight Forwarding Contract Logistics
Total
EMENA*
35%
20%
30%
Americas
20%
53%
31%
Asia Pacific
32%
3%
22%
Africa
12%
24%
16%
Major Countries
Total Revenues
United States
27%
South Africa
16%
China
10%
Spain
5%
None of UTi’s clients accounts for more than 4% of it’s revenues.
*EMENA represents European, Middle Eastern, and North African
countries

Eruption of Eyjafjallajökul in
Iceland
 Dozens of airports shut down
▪ North Africa, Middle East, Eastern
and Western Europe
 Continued erupting for 14
months last time

Oil Spill in Gulf of Mexico
 Most dramatic indirect effect
could be on shipping
Year
Revenue
2011 E
4,073,147
% Growth
Operating Income
Operating Margin
Interest and Other
Interest % of Sales
Taxes
Tax Rate
Net Income
% Growth
Add Depreciation/Amort
% of Sales
Plus/(minus) Changes WC
% of Sales
2012E
4,474,987
9.9%
124,778
3.1%
15,478
0.4%
33,336
30.5%
71,463
162,195
3.6%
17,005
0.4%
44,283
30.5%
96,407
2013E
5,495,666
2014 E
6,320,016
22.8%
233,393
4.2%
20,884
0.4%
64,815
30.5%
143,194
15.0%
252,801
4.0%
25,280
0.4%
69,394
30.5%
158,067
2015E
5,561,614
-12.0%
111,232
2.0%
22,246
0.4%
27,141
30.5%
61,785
2016E
6,562,704
18.0%
262,508
4.0%
26,251
0.4%
72,058
30.5%
164,139
2017 E
7,218,975
10.0%
288,759
4.0%
28,876
0.4%
79,264
30.5%
180,559
2018E
7,579,924
5.0%
303,197
4.0%
30,320
0.4%
83,228
30.5%
189,590
2019E
7,883,121
4.0%
315,325
4.0%
31,532
0.4%
86,557
30.5%
197,176
2020 E
8,198,445
4.0%
327,938
4.0%
32,794
0.4%
90,019
30.5%
205,065
2021E
8,526,383
4.0%
341,055
4.0%
34,106
0.4%
93,620
30.5%
213,270
74%
34.9%
48.5%
10.4%
-60.9%
165.7%
10.0%
5.0%
4.0%
4.0%
4.0%
50,914
55,937
74,191
82,160
83,424
98,441
93,847
98,539
102,481
106,580
110,843
1.3%
1.3%
1.4%
1.3%
1.5%
1.5%
1.3%
1.3%
1.3%
1.3%
1.3%
53,714
(20,092)
(51,034)
(31,600)
(27,808)
(32,814)
(36,095)
(37,900)
(39,416)
(40,992)
(42,632)
1.3%
-0.4%
-0.9%
-0.5%
-0.5%
-0.5%
-0.5%
-0.5%
-0.5%
-0.5%
-0.5%
40,731
58,175
82,435
94,800
83,424
85,315
93,847
98,539
102,481
106,580
110,843
Capex % of sales
1.0%
1.3%
1.5%
1.5%
1.5%
1.3%
1.3%
1.3%
1.3%
1.3%
1.3%
Free Cash Flow
135,360
74,077
83,917
113,827
33,977
144,451
144,464
151,690
157,760
164,073
170,638
-45.3%
13.3%
35.6%
-70.2%
325.1%
0.0%
5.0%
4.0%
4.0%
4.0%
Subtract Cap Ex
% Growth
Target Price: $16.42
Upside: 18%
Discount Rate: 10.5%
Terminal Growth Rate: 4%
Sum of Parts Analysis
UTi Worldwide (UTIW)
Eric Zimmerman
Sales per
Segments
Airfreight Forwarding
Ocean Freight Forwarding
Customs Brokerage
Contract Logistics
Distribution
Other
TOTAL
Segment
P/S
Competitors P/S ratios
Target P/S
Hub
UPS
FedEx
CH Rob Group
Air T
Pacer
ATS
Atlas Air Multiple
1.36
0.77
1.19
0.39
0.17
0.41
1.09
1.19
0.17
1.36
0.17
1.36
1.19
0.73
0.17
0.41
0.17
0.17
0.41
Ratio
283,701
174,183
86,744
525,494
137,071
153,808
1,361,001
Date of price
Current Stock Price
1/1/2008
14.28
# of diluted shares
Target Price
% return to target
101485
16.02
12%
0.41
Target Price: $16
Upside: 12%
Target multiple x
1.4
1.3
1.4
1.4
0.5
0.5
Sales/Segment
397181.4
226437.9
121441.6
735691.6
68535.5
76904
Target
Market
1626192Cap
Relative to Industry
Relative to Sector
1.4
1.2
1.2
1
1
0.8
0.8
0.6
Median
0.6
0.4
Current
0.4
0.2
0.2
0
0
Forward P/E
P/Sales
Median
Current
Forward P/E
P/Sales
*Current P/Book, Trailing P/E, P/Cash Flow, and P/EBITDA ratios are
all below the median ratios, signaling that the stock may be at a
discount
Multiple
Summary
Adjusted
StErr of
R-Square
Estimate
0.7413
0.7140
1.76319038
Degrees of
Sum of
Mean of
Freedom
Squares
Squares
0.8610
ANOVA Table
Explained
Unexplained
2
19
Coefficient
Regression Table
Constant
Dollar/Euro
Trade Balance
R-Square
R
169.238416 84.6192079
59.0679661 3.10884032
Standard
t-Value
F-Ratio
p-Value
27.2189
< 0.0001
p-Value
Error
-10.154925 6.27097683
13.0549049 4.99204388
-0.1516905 0.03768582
Confidence Interval 95%
Lower
-1.6194
2.6151
-4.0251
0.1219
0.0170
0.0007
Upper
-23.28023 2.97038025
2.60643701 23.5033729
-0.2305679 -0.0728132
UTi Stock Price = -10.15 + 13.0549($/euro) – 0.15169(US Trade
Deficit in Billions)
If the euro falls to $1.2 and the deficit increases to -44 billion,
UTi’s stock price is estimated to be $12.19
We put little credence in this prediction, as the result is an
extrapolation.

SELL all 249 bp of UTi Worldwide
 Overall Target Price: $16.50, Current Price: $14
▪ Upside of 18%, so technically we should HOLD
▪ Down 15% in past week
 Increased port, rail, and air freight volumes are limiting
available capacity for UTi to purchase and making it more
expensive
 Natural disasters are increasing the costs and complexity
of moving freight
 An economic slowdown in Europe (Spain) will leave UTi
with excess capacity and losses
 Despite the upside, the opportunity cost of holding is high
with other industrial stocks performing well




Current Price: 28.15
Target Price: 37.98 (34.9% upside)
YTD performance: +14.66%
Tyco Electronics is an incredibly diverse company with
products ranging from electronic components to undersea
telecommunication systems. They design, manufacture and
market products for customers in a broad array of industries
including automotive; data communication systems and
consumer electronics; telecommunications; aerospace,
defense and marine; medical; energy; and lighting.

Electronics make up the largest chunk of sales (65%)
 35% of sales from Specialty products, Subsea communications, or
network solutions
2009 sales of $10.5b to expected to increase to $11.95b this
year
 Majority (45%+) of sales are in US dollars
 Beat analysts’ expectations with EPS of $0.65 and increased
guidance for Q3 of 2010.
 Posted a dividend of $.16 for Q3 of 2010.

Year
2010E
Revenue
12,102
% Grow th
2011E
13,917
15.0%
Operating Income
1,162
1,559
2012E
15,727
13.0%
1,761
2013E
17,771
13.0%
1,955
2014E
19,726
11.0%
2,170
2015E
21,699
10.0%
2,387
2016E
23,434
8.0%
2,578
2017E
25,075
7.0%
2,758
2018E
26,579
2019E
27,908
6.0%
2,924
5.0%
3,070
2020E
29,025
4.0%
3,193
Operating Margin
9.6%
11.2%
11.2%
11.0%
11.0%
11.0%
11.0%
11.0%
11.0%
11.0%
11.0%
Interest Income
(242)
(139)
(157)
(178)
(197)
(217)
(234)
(251)
(266)
(279)
(290)
Interest % of Sales
-2.0%
-1.0%
-1.0%
-1.0%
-1.0%
-1.0%
-1.0%
-1.0%
-1.0%
-1.0%
-1.0%
Taxes
Tax Rate
Net Income
(290)
(390)
(440)
444
493
542
586
627
664
698
726
25.0%
25.0%
25.0%
25.0%
25.0%
25.0%
25.0%
25.0%
25.0%
25.0%
25.0%
715
% Grow th
Add Depreciation/Amort
% of Sales
Plus/(minus) Changes WC
% of Sales
1,063
1,265
1,333
1,479
2,177
696
786
889
986
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
(320)
(399)
(398)
(391)
(395)
(391)
(375)
(351)
(319)
(279)
(290)
-2.5%
-2.2%
-2.0%
626
708
817
927
Capex % of sales
4.5%
4.5%
4.5%
4.6%
4.7%
Free Cash Flow
455
% Grow th
7,271
9,872
17,142
3.57%
17.8
24.0
6.3
8.8
733
946
61.0%
29.0%
1,013
7.1%
1,144
12.9%
10.0%
1,085
-1.8%
1,042
4.8%
1,280
11.9%
8.0%
1,172
-1.6%
1,148
4.9%
1,406
9.8%
42%
58%
100%
28.15
37.80
34.3%
7.0%
1,254
-1.4%
1,254
5.0%
1,530
8.8%
6.0%
1,329
5.0%
1,395
-1.2%
1,329
-1.0%
1,395
5.0%
1,674
5.0%
1,814
9.5%
8.3%
Terminal Value
Free Cash Yield
12.0
16.1
5.0
6.9
10.1
13.6
4.4
6.1
454
$
$
2,093
605
-2.9%
Current Price
Implied equity value/share
Upside/(Downside) to DCF
1,993
11.0%
545
Shares Outstanding
1,881
5.4%
-2.6%
Current P/E
Projected P/E
Current EV/EBITDA
Projected EV/EBITDA
1,758
19.0%
Subtract Cap Ex
NPV of Cash Flows
NPV of terminal value
Projected Equity Value
Free Cash Flow Yield
1,627
48.6%
Dividend Yield
2.3%
4.0%
1,451
-1.0%
1,451
5.0%
1,887
4.0%
28,029
6.73%
Terminal P/E
12.9
Terminal EV/EBITDA
5.7
3.5
3.75
4
4.25
4.5
50.3
54.2
58.4
63
68
10.25
45
48
52
56
61
10.5
39.1
42.3
45.8
49.5
53.6
10.75
34
37
40.1
43.6
47.2
11
29.3
32
34.3
38
41.4
11.25
24.9
27.4
30.1
32.9
36
11.5
20.8
23.1
25.5
28.1
30.9
11.75
16.9
19
21.3
23.7
26.2
12
13.3
15.2
17.3
19.5
21.9
10
Relative To Industry

Relative To Sector
*The predictive value of these ratios is questionable because the company
spun off from Tyco International in 2007
HOLD
SELL
BUY