Consumer Discretionary Stock Presentation June 2, 2009 Diego Benavente, Matthew Berkowitz,

advertisement
Consumer Discretionary
Stock Presentation
June 2, 2009
Diego Benavente, Matthew Berkowitz,
Conrad Bowman, Julie McGrover
Agenda
 Sector & Stock Allocation
Overview
 Recommendation
Sector Allocation Overview
Consumer
Discretionary
Consumer Staples
Energy
Financials
Health Care
Industrials
Information Technology
Materials
Telecommunication Services
Utilities


S&P 500
Weight
SIM
Weight
9.52%
7.93% -1.59%
+/-
12.04%
13.06%
1.02%
12.51%
12.19%
11.31%
-1.20%
8.14%
-4.05%
13.83%
17.74%
3.90%
10.44%
9.44%
-1.00%
18.40%
19.92%
1.52%
3.37%
3.88%
0.52%
3.71%
2.40%
-1.32%
3.98%
2.50%
-1.49%
Class agreed to add 59 bps to sector
Continue to have sector underweight
Current Stock Holdings
Security
Comcast
Best Buy
McDonalds
GameStop
Ticker
CMCSA
BBY
MCD
GME
%
Allocation
Shares
Assets within Sector Outstanding
2.71%
34%
2061.0
2.23%
28%
416.3
1.70%
21%
1113.6
1.28%
16%
164.5
7.93%
100%
Beta
1.14
1.32
0.70
1.20
Upside
(DCF)
22%
24%
12%
20%
Trailing P/E by Industry
CONSUMER ELECTRONICS
RETAIL-INTERNET
HOMEFURNISHING RETL
SPECIALTY STORES
EDUCATION SERVICES
AUTOMOTIVE RETAIL
HOME FURNISHINGS
RESTAURANTS
AUTO PARTS & EQUIP
DEPARTMENT STORES
GENERAL MERCHANDISE
CABLE & SATELLITE
RETAIL-HOME IMPROVE
LEISURE PRODUCTS
FOOTWEAR
CASINOS & GAMING
RETAIL-COMP/ELECTRN
DISTRIBUTORS
RETAIL-APPAREL
APPAREL & ACCESSORY
ADVERTISING
SPECIAL CONSM SERV
HOTEL/RESORT/CRUISE
HOUSEWARES & SPECS
MOVIES & ENTMT
HOUSEHOLD APPLIANCES
PUBLISHING
MOTORCYCLE MFRS
BROADCASTING
AUTOMOBILE MFRS
HOMEBUILDING
PHOTOGRAPHIC PRODS
TIRES & RUBBER
•Harman Int’l
•Amazon.com(54), Expedia (11)
•McDonalds
•Comcast
•Best Buy
•GameStop
•GM, Ford
•Centex, Horton, KB Home, Lennar, Pulte
•Eastman Kodak
•Goodyear
4.400177001
-10
0
10
20
30
40
50
60
70
80
90
100
110
Selection Criteria
 Universe: S&P 1500 Consumer Discretionary Cos (263 stocks)
 Eliminated Cos without full information (-63 stocks)
 Key Factors:
 Pricing:
 FWD P/E & P/E (2010)
< 15
 P/E relative to S&P500
<1
 P/S
<1
 Price growth vs. SPX: 3mos: (-5%/20%); 6mos: (-30%/30%)
 Solvency:
 LT Debt / Capital:
< 50%
 Size:
 Market Cap
> 500M
30
Stocks
Selection Criteria:
30 stocks
P/E (FWD
& 2010)
<15
5/22/09
INDUSTRY
HOUSEHOLD APPLIANCES
FOOTWEAR
LEISURE PRODUCTS
ADVERTISING
DISTRIBUTORS
SPECIALTY STORES
HOUSEHOLD APPLIANCES
FOOTWEAR
RETAIL-COMP/ELECTRN
HOMEFURNISHING RETL
RETAIL-COMP/ELECTRN
APPAREL & ACCESSORY
BROADCASTING
LEISURE PRODUCTS
RESTAURANTS
HOUSEHOLD APPLIANCES
APPAREL & ACCESSORY
MOVIES & ENTMT
APPAREL & ACCESSORY
MOVIES & ENTMT
RETAIL-COMP/ELECTRN
RETAIL-APPAREL
RETAIL-APPAREL
RETAIL-APPAREL
SPECIALTY STORES
CABLE & SATELLITE
ADVERTISING
HOMEFURNISHING RETL
GENERAL MERCHANDISE
RETAIL-HOME IMPROVE
COMPANY NAME
SNAP-ON
WOLVERINE WORLD WIDE
MATTEL
OMNICOM GROUP
GENUINE PARTS
TRACTOR SUPPLY
STANLEY WORKS
DECKERS OUTDOOR
GAMESTOP
RENT-A-CENTER
RADIOSHACK
WARNACO GROUP (THE)
CBS
HASBRO
JACK IN THE BOX
HELEN OF TROY
V.F.
TIME WARNER
PHILLIPS-VAN HEUSEN
NEWS CLASS A
BEST BUY
TJX COMPANIES
AEROPOSTALE
GAP (THE)
PETSMART
COMCAST 'A'
INTERPUBLIC GROUP
AARONS
FAMILY DOLLAR STORES
SHERWIN-WILLIAMS
4 QTRS 4 QTRS
P/E
P/E
P/E
LATEST FWD 2010
7.4
10.2 8.7
9.8
11.3 10.1
13.4
11.4 10.3
9.9
11.6 11.3
11.8
13.5 12.6
15.2
13.9 12.5
10.6
14.1 12.2
6.9
6.8 6.4
9.2
7.8 7.2
8.7
8.4 7.6
8.5
9.7 9.9
10.1
9.9 9.4
6.3
10.6 9.0
12.0
10.6 10.2
12.7
10.7 10.4
11.0
11.0 11.0
10.5
11.1 10.1
8.2
11.2 10.3
10.4
11.6 10.7
10.1
11.7 10.7
12.3
12.6 12.6
13.8
12.8 12.0
13.8
12.9 12.3
12.4
13.2 12.5
13.0
13.4 12.6
14.4
13.9 12.4
12.3
14.0 10.8
16.1
14.2 13.0
16.1
14.5 13.8
13.4
14.9 12.9
P/E
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
P/E <1
P/S <1
P/E 2009 P/E 2010
P/S
REL TO REL TO
LATEST P/S P/S P/S
SPX
SPX
Rel P/E 4 QTRS 2009 2010 2011 P/S
0.7
0.7
1
0.61 0.70 0.66 0.64 1
0.7
0.8
1
0.75 0.82 0.79 0.74 1
0.8
0.8
1
0.87 0.89 0.85 0.87 1
0.8
0.9
1
0.73 0.80 0.79 0.77 1
0.9
1.0
1
0.48 0.51 0.51 0.48 1
0.9
1.0
1
0.44 0.41 0.38 0.36 1
1.0
1.0
1
0.64 0.70 0.70 0.68 1
0.5
0.5
1
0.95 0.86 0.80 0.70 1
0.5
0.6
1
0.41 0.38 0.37 0.38 1
0.6
0.6
1
0.43 0.44 0.42 0.42 1
0.6
0.8
1
0.39 0.39 0.40 0.42 1
0.7
0.8
1
0.63 0.68 0.65 0.63 1
0.9
0.7
1
0.35 0.37 0.37 0.36 1
0.7
0.8
1
0.80 0.79 0.78 0.75 1
0.8
0.8
1
0.54 0.57 0.56 0.58 1
0.7
0.9
1
0.92 0.92 0.88 0.86 1
0.8
0.8
1
0.80 0.84 0.80 0.73 1
0.8
0.8
1
0.64 0.94 0.92 0.90 1
0.8
0.9
1
0.57 0.60 0.59 0.58 1
0.9
0.9
1
0.74 0.76 0.75 0.71 1
0.8
1.0
1
0.32 0.32 0.30 0.29 1
0.9
1.0
1
0.62 0.62 0.59 0.57 1
0.9
1.0
1
1.15 1.07 0.99 0.95 1
0.9
1.0
1
0.81 0.84 0.86 0.85 1
0.9
1.0
1
0.50 0.48 0.47 0.46 1
0.9
1.0
1
1.18 1.15 1.11 1.07 0
0.9
0.9
1
0.35 0.38 0.38 0.37 1
1.0
1.1
0
0.93 0.87 0.80 0.74 1
1.0
1.1
0
0.58 0.56 0.54 0.51 1
1.0
1.1
0
0.81 0.86 0.84 0.81 1
PRICE
VS SPX
3 MTHS
3.2%
-0.6%
0.7%
6.6%
-3.5%
-2.9%
4.9%
-28.0%
-30.7%
-11.3%
0.7%
14.7%
28.2%
-17.2%
7.3%
71.7%
-12.6%
25.1%
36.1%
31.0%
10.9%
17.6%
37.4%
26.7%
-8.0%
-4.4%
40.8%
6.5%
-4.5%
1.1%
PRICE
VS SPX
6 MTHS
-12.3%
-6.3%
4.4%
18.9%
-28.1%
-7.4%
18.2%
-13.8%
11.0%
36.1%
43.0%
100.2%
37.5%
-17.0%
86.6%
18.6%
18.8%
28.0%
79.8%
43.5%
84.1%
35.2%
139.2%
54.5%
19.6%
-11.0%
45.2%
16.8%
1.4%
-11.2%
PRICE
VS SPX
YTD
-21.4%
-9.9%
-11.0%
14.8%
-13.1%
2.9%
3.1%
-35.3%
5.9%
7.3%
11.1%
42.2%
-12.6%
-20.2%
15.4%
11.7%
1.5%
4.3%
35.7%
-1.1%
27.0%
39.3%
111.3%
24.2%
12.4%
-14.0%
29.1%
11.6%
16.5%
-8.6%
PRICE
VS SPX
5 YRS
12.0%
29.0%
1.0%
-3.0%
3.0%
19.0%
1.0%
126.0%
210.0%
-14.0%
-35.0%
59.0%
-55.0%
40.0%
96.0%
-21.0%
37.0%
-19.0%
66.0%
-27.0%
22.0%
32.0%
101.0%
-13.0%
-12.0%
-5.0%
-43.0%
65.0%
13.0%
59.0%
3Mo: 5%/20%;
D/C
6Mo: <50%
>500
30%/30% % OF LT
MRKT CAP
DEBT TO
(MILS)
P_SPX CAPITAL D/C
5/22/09 MktCap
1
36%
1
1,737
1
1
0%
1
920
1
1
27%
1
5,004
1
1
45%
1
9,455
1
1
18%
1
5,139
1
1
6%
1
1,315
1
1
45%
1
2,725
1
0
0%
1
657
1
0
19%
1
3,693
1
0
45%
1
1,229
1
0
42%
1
1,632
1
0
17%
1
1,285
1
0
46%
1
4,760
1
0
34%
1
3,167
1
0
49%
1
1,427
1
0
18%
1
575
1
0
24%
1
6,018
1
0
30%
1
27,339
1
0
29%
1
1,387
1
0
35%
1
23,080
1
0
20%
1
14,544
1
0
15%
1
11,774
1
0
0%
1
2,254
1
0
0%
1
11,579
1
0
33%
1
2,593
1
1
42%
1
40,963
1
0
46%
1
2,401
1
1
9%
1
1,568
1
1
15%
1
4,183
1
1
16%
1
6,276
1
Recommendation:
Aéropostale
Back to pre-crisis
value
Recommendation:
Aéropostale
Forward P/E relative to:
Relatively “cheap” @ 12.6 vs.
•
•
•
•
S&P500 at 13.9
Industry @ 15.1
Guess (GES) @ 16.3
Abercrombie&Fitch (ANF) @ 24.8
Recommendation:
Aéropostale
Liquidity not an issue;
Quick Ratio: 1.3
(+ no LT Debt)
Better Margins than
Industry
Continuous Growth
Better & Still Improving Margins
Current Holdings:
FWD P/E Relative to S&P500
Current Holdings:
P/CF Relative to S&P500
Final Recommendation(s)

Current Holdings
Security
Comcast
Best Buy
McDonalds
GameStop

Ticker
CMCSA
BBY
MCD
GME
%
Allocation
Shares
Assets within Sector Outstanding
2.71%
34%
2061.0
2.23%
28%
416.3
1.70%
21%
1113.6
1.28%
16%
164.5
7.93%
100%
Beta
1.14
1.32
0.70
1.20
Upside
(DCF)
22%
24%
12%
20%
Recommendation: Aeropostle (ARO)
 Upside 35%

Only have 59bps available
 Because of upside in current holdings, recommend class provide another
41bps to purchase ARO to provide diversification to portfolio.
 Alternative: use 59bps to purchase more BBY
Download