Stock Picking Process Securities offered through LPL Financial. Member FINRA/SIPC. Stock investing involves risk including loss of principal.

Our Objective To reduce the universe of all possible stocks in the market to the top 25 stocks that provide a high probability of success. Our objective is to reduce the universe of all possible stocks in the market to the top 25 stocks that provide a high probability of success. No strategy can assure success or guarantee against loss in declining markets. General risks inherent to investments in stocks include the fluctuation of market prices and dividend, loss of principal, market price at sell may be more or less than initial cost and potential illiquidity of the investment in a falling market

Final List TOP 25 STOCKS INVESTING UNIVERSE Scoring Process First Screen Popular Lists Screen-Based List Current List Master List Top 400 Stocks Ultimate List Top 100 Stocks Analyst Favorites Category Value Category Growth Category Sentiment Category Second Screen Quality Category This flow chart illustrates the screening process we use in deciding what companies we are willing to own. We begin with the entire universe of U.S. based equities and we reduce it down to a more manageable list of 400 companies. From there, we use our second set of screens to reduce the list further to what we believe are the top 100 stocks. Finally, we use our scoring process to begin to numerically rank the 100 stocks so that we can get down to the final top 25 stocks. Scoring Process Final List TOP 25 STOCKS

400 100 25 Stock Stars Investing Universe 10,000+ Stocks Master List Ultimate List 100 Stocks This illustrates stock selection process using funnels.

Three Evaluation Lists INVESTING UNIVERSE First Screen Three Evaluation Lists Popular List: Top 50 stocks IBD Top 100 stocks VL Top 36 stocks SS Top 37 stocks MS Top 50 stocks B Screen-Based List: Value Screen Growth Screen Momentum Screen Current List: Current Nominees Personal Nominees In our attempt to reduce the universe of stocks to a more manageable list of 400, we use stock lists from other analysts such as Investors Business Daily, Value Line, AAII Stock Superstars, Morningstar, and Birinyi. Then we use our top 25 stocks from the previous month combined with our screening process. Master List TOP 400 Stocks

Three Evaluation Lists INVESTING UNIVERSE First Screen Three Evaluation Lists Popular List: Top 50 stocks IBD Top 100 stocks VL Top 36 stocks SS Top 37 stocks MS Top 50 stocks B Screen-Based List: Value Screen Growth Screen Momentum Screen Current List: Current Nominees Personal Nominees When we look at the screen based list, we are screening for stocks from a value perspective, growth perspective, and momentum perspective. Master List TOP 400 Stocks

SCREEN-BASED LIST Investment Style: VALUE Screen Tests GROWTH Screen Tests Investment Style: MOMENTUM Screen Tests Stock Screener Stock Screener Stock Screener Growth Screen 1 Relative Growth Value Screen 1 Relative Value Momentum Screen 1 Relative Strength Growth Screen 2 Comparative & Financial Strength Growth Screen 3 Comparative & Sustainable Growth Momentum Screen 2 Moving Average & Behavioral We have 3 different screens for each discipline: 3 value, 3 growth, and 3 momentum. Value Screen 2 Comparative Value & Growth Value Screen 3 Contrarian Opportunities Momentum Screen 3 Relative Momentum

Screen-Based Tests * These are the formulas for screening. *The formulas have been altered to protect Proprietary Information

Value Screen 2: Comparative Value P/E Ratio <= Indy. Avg. P/E Price/Sales <= Indy. Avg. P/S TTM ROE > Indy. Avg. TTM ROE TTM ROE > 0 5 y Avg. ROE > 5 Y Indy. Avg. ROE LT Debt/Equity ratio <= Indy. Avg. LT Debt Ratio Price/Book <= 3 EPS Growth Est. > Indy. Avg. EPS Growth Est. Y1 EPS Est. Growth > 0 For example, if we look at Value Screen 2, these are the criteria that each stock has to pass to make it to the comparative value list.

Screen Results: Value Screen 2 FIELD OPERATOR COMPARE TO: STOCKS P/E Ratio <= Indy. Avg. P/E 2190 Price/Sales Indy. Avg. P/S 3581 TTM ROE > Indy. Avg. TTM ROE 4464 5909 5 Y Avg. ROE 5 Y Indy. Avg. ROE 3452 LT Debt/Equity Ratio Indy. Avg. LT Debt/Equity Ratio 3864 Price/Book Average Price/Book Ratio 5459 EPS Growth Est. Indy. Avg. EPS Growth Est. 1236 1Y EPS Est. Growth 832 7 COMPANIES MET THE CRITERIA: AS OF February 28, 2013 COMPANY NAME SYMBOL SECTOR MYR Group Inc MYRG Capital Goods Virtusa Corporation VRTU Technology Assurant, Inc. AIZ Financial Hub Group Inc HUBG Transportation Jones Lang LaSalle Inc JLL Services Kulicke and Soffa Industries KLIC USANA Health Sciences, Inc. USNA Conglomerates For example, as of February 28th, only seven companies passed Value Screen 2. Securities offered through Triad Advisors, member FINRA/SIPC. Advisory services offered through Lee Johnson Capital Management, LLC (LJCM). LJCM is an independent Registered Investment Advisor and is not affiliated with Triad Advisors. 10

First Screen INVESTING UNIVERSE 10,000 + Stocks Master List TOP 400 Stocks Now going from the stock universe to the Top 400 stocks we screen again.

Second Screen Master List Top 400 Stocks Second Screen Analyst Favorites Category: 1.Most Repeated Stocks Value Category: 1.Catching Up Stocks Quality Category: 1.Industry Leaders 2.Fastest Turnover Growth Category: 1.Historical comparison 2.Industry Comparison Sentiment Category: 1.High P/E Multiples 2.Institutional Ownership In the second screen, we are looking for stocks that are most repeated on the analyst favorite lists. We screen for value stock that are showing price appreciation. We look at growth from a historical and industry comparison perspective. We look at quality in industry leadership and inventory turnover. And we look at sentiment; companies with high PE multiples and institutional sponsorship.

Second Screen* These are the formulas for the second screen. *The formulas have been altered to protect Proprietary Information

TOP PROBABILITY STOCKS Third Screen Ultimate List: Top 100 Scoring Process: Growth Score Profitability Score Financial Health Score Momentum Score Now that we have a list of 100 stocks that was rendered from our second screen, we have to narrow it down further by prioritizing in numerical order. There are 98 different variables in this process in which we look at growth, profitability, financial health, and momentum. Stock Stars List TOP PROBABILITY STOCKS

Glossary of Screen-Based Tests %Chg = Percentage Change. 1Q = Recent quarter. Asset turnover = The amount of sales generated for every dollar’s worth of assets. CF = Cash Flow: a revenue or expense stream that changes a cash account over a given period. Current Ratio = A liquidity ratio that measures a company’s ability to pay short-term obligations. D = Days (example: 27D=27 Days) EPS = Earnings Per Share: the portion of a company’s profit allocated to each outstanding share of common stock. EPS Est. = An analyst’s estimate for a company’s future annual EPS. FCF = Free Cash Flow: a measure of financial performance calculated as operating cash flow minus capital expenditures. Gr. = Growth. Inventory Turnover = A ratio showing how many times a company’s inventory is sold and replaced over a period. LT Debt/Equity Ratio = Long-Term Debt/Equity Ratio: a measure of a company’s financial leverage calculated by dividing its long-term debt by stockholders’ equity. Net Income = A company’s total earnings (or profit). Net Margin = The ratio of net profits to revenues for a company, expressed as a percentage. Price/Book Ratio = A ratio used to compare a stock’s market value to its book value. P/E = Price to Earnings Ratio: A valuation ratio of a company’s current share price compared to its per-share earnings. P/FCF = Price to Free Cash Flow Ratio: A valuation metric that compares a company’s market price to its level of annual free cash flow. Investopedia AAII

Glossary of Screen-Based Tests P/S = Price to Sales Ratio: A ratio for valuing a stock relative to its own past performance, comparing a company’s market price to its level of annual revenue. Pr = Price (example: Pr4D%Chg=Four day price percentage change) Price/CF = Price to Cash Flow: A measure of the market’s expectations of a firm’s future financial health. Q1 = Present quarter Q2 = One quarter prior to the present quarter Q3 = Two quarters prior to the present quarter Q4 = Three quarters prior to the present quarter Q5 = Four quarters prior to the present quarter Q6 = Five quarter quarters prior to the present quarter Relative Strength = A measure of price trend that indicates how a stock is performing relative to other stocks in its industry. ROA = Return on Assets: an indicator of how profitable a company is relative to its total assets. ROE = Return on Equity: the amount of net income returned as a percentage of shareholders equity. ROI = Return on Investment: A performance measure used to evaluate the efficiency of an investment. The return of an investment is divided by the cost of the investment. TTM = Trailing Twelve Months: The timeframe of the past 12 months used for reporting financial figures. Turnover = The number of times an asset is replaced during a financial period. W = Weeks (example: 52W=52 Weeks) Y1 = Recent Year Y = Yearly (example: Y EPS= Yearly EPS), or Years (example: 3Y= 3 Years) Investopedia AAII