Industrials By: Brandon Harlow, Bhavik Khandhar, Tracy Marsolo & Matt Shubeck.
Post on 21-Jan-2016
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IndustrialsBy: Brandon Harlow,
Bhavik Khandhar,Tracy Marsolo & Matt Shubeck
Agenda• Sector Analysis• Business Analysis• Economic Analysis• Financial Analysis• Valuation Analysis• Recommendation• Q&A
0.00%2.00%4.00%6.00%8.00%
10.00%12.00%14.00%16.00%18.00%20.00%
S&P 500 Weight vs. SIM Weight
S&P 500 Weight
SIM Weight
Industrials currently underweight in SIM Portfolio by 100 basis points.
Sector Analysis
Sector’s Performance as of 5/6/09
MTD QTD YTDEnergy 8.46% 13.68% -0.05%Materials 5.65% 21.59% 18.17%Industrials 6.33% 25.17% -2.08%Consumer Discretionary 3.65% 22.86% 12.28%Consumer Staples 1.88% 4.97% -6.90%Health Care 2.01% 1.10% -7.51%Financials 15.64% 41.28% -0.39%Info Tech 2.10% 14.40% 18.92%Telecomm 4.25% 6.58% -2.45%Utilities 3.59% 4.03% -8.31%
Industries in Industrials • Trucking • Trade Cos & Dist • Services-Office/Supp • Services-Environmental • Services-Employment • Research & Consulting • Railroads • Machinery Industrial • Machinery Const/Farm
• Ind'l Conglomerates • Electrical Component • Diversified Supp Ser • Construct. & Engineer. • Commercial Printing • Building Products • Airlines • Airfreight & Logistics • Aerospace/Defense
10 Biggest Stocks in Industrials• General Electric• Caterpillar• Southwest Airlines• Textron• Honeywell Int'l• CSX Corp• Boeing• United Technologies• Union Pacific• UPS
• Top 10 make up 59.28% of Industrials
36.11%4.39%3.14%2.66%2.51%2.26%2.11%2.07%2.05%1.98%
Business Analysis
Phases of Lifecycle• Most companies are established companies
competing with a few major competitors.
Industrial Sector
Industrial’s Price vs. S&P 500
Manufacturer’s Inventories
Industrial Production, Capacity, & Utilization
Economic Analysis
Industry and Economic Life Cycle
Financial Analysis
Net Profit Margin
ROE
EPS YOY Growth
EPS YOY Growth
Trailing P/E Relative toS&P 500
Forward P/E Relative toS&P 500
P/CF Relative to S&P 500
P/B Relative to S&P 500
Valuation Analysis
Specific Industries in SectorRecommend• Industrial Conglomerates • Electrical Components
Avoid• Service-Employment• Building Products• Airlines
Industrials
vs. S&P 500
P/E 1.2 0.66 1.1 0.73
P/S 1.1 0.8 1 0.9
P/B 1.4 0.9 1.1 1.1
P/CF 1.2 0.8 1.1 0.9
Industrials Sector
High Low Median Current
P/E 30.5 7.1 20.4 9.7
P/S 1.9 0.6 1.5 0.8
P/B 6.1 1.4 3.3 2.3
P/CF 16.7 4.9 12 6.7
Conglomerates
Electrical Components
Electrical Components
Services-EmploymentServices-Employment
High Low Median Current
P/E 1582.3 7.7 30.1 13.3
P/S 3.2 .5 1.9 .9
P/B 10. 1.7 5.2 2.6
P/CF 49.7 5.8 21.6 10
Building Products
Airlines
Final Recommendation
Increase position in portfolio by 100 basis points. Match the S&P 500
Q & A
Q & A
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