Tyler Hand , Enrique Cruz, Skye Galley ULTA, GILD, MCK Tyler Hand , Enrique Cruz, Skye Galley

ULTA company overview The largest beauty retailer in the US that provides one-stop shopping for salon products & services. With over 20,000 beauty products, Ulta offers a wide selection of cosmetics, fragrance, haircare and more. Current Price - $191.91 (as of 3/28/16) 52 wk range: $120.38 - $193.78 Beta = 0.47 Cost Basis: ULTA - $176.83

ULTA company highlights: 2015 10-K Total stores have doubled from 2010 to 2014 2010 = 346 stores 2014 = 675 stores Sales have doubled from 2010 to 2014 2010 = $1,222.77 mil 2014 = $2,670.57 mil

Stock is out of favor at a -9 ULTA sentiment index Stock is out of favor at a -9

ULTA key performance measures Earnings, EBITDA & Sales Positive values Consistently growing More than doubled from ‘10 - ‘15 Score +2 for positive Sales & NI

ULTA key performance measures Sales, Earnings & EBITDA Steep decline since ‘11 Small increase in ‘15

ULTA key performance measures OCF Positive growth FCF Fluctuates, but positive OCF % Change Large decline in growth rate from ‘10 to ‘15 FCF % Change Growth is down since ‘14 Score +1 for positive OCF -1 for fluctuation in FCF

ULTA key performance measures EPS estimated to increase OCF > NI = Earnings Quality is good Score +1 for increased EPS & good earnings quality

ULTA leverage CA = 3x liabilities at $1,375 mil Liabilities are $400 mil No LTD No ST liquidity issues Working Cap & OCF: Both positive Score +2 for overall leverage & LTD trends

ULTA profitability analysis MARGINS Positive Consistent Score +3 for positive margins

ULTA profitability analysis ROA ROA double the industry ROE ROE in line with avg. Not impacted by LTD Score +2 high ROA & expected ROE

ULTA target price valuation PE Relatively inexpensive Close to industry avg PEG Lower, but close to avg

ULTA target price valuation Cost Basis - ULTA - $176.83 52 week price range - $120.38 - $188.48 Target Price Range

HOLD ULTA scoring Total Score = 10 Sales & NI Trends = +2 OCF & FCF Trends = 0 EPS & Earnings Quality = +1 Leverage = +1 LTD Trends = +1 Margin Trends = +3 ROA & ROE = +2 Total Score = 10 Total score is good! Price has peaked, but has room to grow Sales have doubled over past 5 years Cost basis shows purchase was a little late Current Price has increased $40 in past month HOLD

GILEAD company overview Gilead Sciences, Inc. is a research-based biopharmaceutical company that discovers, develops, and commercializes innovative medicines in areas of unmet medical needs in North America, South America, Europe, and the Asia-Pacific. Current Price $89.63 52 week range $81.89 - $123.37 Beta 1.41 Cost Basis GILD - $67.25

GILEAD company highlights: 2015 10-K New Hepatitis C medication the only one available Future revenues in question with new competition Last two years have been out of the ordinarily good financially, but company isn't sure if they can maintain recent growth

Research Pipeline Phase 1 - 9 products Phase 2 - 15 products Submitted for approval - 4 products

GILEAD sentiment index Stock is out of favor at -2

GILEAD key performance measures Cash flows & Earnings Slow consistent growth with spike in the last two years Score +2 for positive Sales & NI

GILEAD key performance measures Operating cash flow has stayed close with free cash flow staying with the common theme of a spike in the last two years Score +1 for spike in OCF & FCF

GILEAD key performance measures EPS are estimated to increase OCF > NI = Earnings quality is good Score +1 for increased EPS & good earnings quality

GILEAD leverage Current Assets (24,763) easily cover Current Liabilities (9,891) Long Term debt (21,197) has been tripled in last 4 years (due to research) Working Cap & OCF Both positive Score +1 for high leverage ratio (2.71)

GILEAD profitability analysis Margins Slow increase over last 4 years Score +2 for steady rise in margins

GILEAD profitability analysis ROE & ROA Similar last 2 years but high compared to 5 year average Score +2 for being huge compared to 5 yr avg

GILEAD key performance measures PEG & PE Both quite low compared to industry average

GILEAD Target Price Valuation Cost basis - $67.25 52 week price range - $81.89 - $123.37 Target Price Range

BUY Score Total Score = 9 Sales & NI Trends = +2 Total score is good! OCF & FCF Trends = +1 EPS & Earnings Quality = +1 Leverage = +1 LTD Trends = +0 Margin Trends = +2 ROA & ROE = +2 Total Score = 9 Total score is good! Price is low compared to 52 week range as well as target pricing Spike in sales and cash flow last 2 years Current Price believed to be a low point BUY

MCK Company Overview Mckesson Corp. is a health services and information technology company, which provides medicines, pharmaceutical. and care management products. They currently have more than 12,000 owned and banner pharmacies Nearly 77,000 employees Deliver ⅓ of all prescription medications in North America Current Price : $155.84 High: 243.61 Low: 148.29 Cost Basis MCK - $182.81

Sentiment Index There is no sentiment index for MCK

MCK Key Performance Measures EBITDA has had constant growth after 2013 NI and Sales have had constant growth in the past 5 years NI & Sales +2

MCK Key Performance Measures Free Cash Flow had a small decrease in 2013 but continued to grow Overall both have been increasing Net Operating Cash Flow and Free Cash Flow +2

MCK Eps Data EPS had been growing until 2014 where it had a significant decrease. In 2015 it's been the highest in the past four years. I don't think there is a concern in the change in shares outstanding. Shares repurchases of 1.5 million Score: 0 5 yr trend, earning quality, decrease in shares outstanding

Debt Analysis Leverage ratio is high but it is still underneath the industry Current Ratio and Quick Ratio are slightly above the industry Working Cap & OCF: Both positive Score +1

Long Term Debt Long Term Debt has been inconsistent It has tripled from 2011-2015 Score: -1

Profitability Analysis Gross Margin- Consistent growth Operating Margin- slightly inconsistent Net Margin has been inconsistent Gross Margin : +1 Operating Margin: 0 Net Margin: 0 Separate roa and roe

Profitability Analysis ROE and ROE have been inconsistent, but it is still positive ROE and ROA: 0

MCK Fundamental Score Total Score:+ 5 Net Income +1 Sales +1 Operating Cash Flow: +1 Free Cash Flow +1 EPS 0 Ratios +1 Long Term Debt -1 Gross Margin +1 Operating Margin 0 Net Margin 0 ROE 0 ROA 0 Total Score:+ 5

PEG/PE Ratio

Target Price & Valuation Cost Basis MCK: $182.81 52 Week High Low $148.29- $243.61 Target Price

Recommendation HOLD