1. Liting Shen Jiamo Tian Ning Wang Presented on Sept. 29, 2016

2. Historical Transactions
Buy
Sell
Nov. 11, 1999
Purchased 200 shares
@ $36
Mar. 2, 2000
2 for 1 stock split
Hold 400 shares
Mar. 4, 2001
2 for 1 stock split
Hold 800 shares
Nov. 25, 2013
Sold 200 shares
@ $56.75
Sell
Sell
Sept. 28, 2016
Hold 100 $86.68
Jan. 15, 2007
Sold 400 shares
@ $22.53
Apr. 14, 2016
Sold 100 shares
@ $82.58

3. Current Holding Current share price: $86.68
Current holding value: $8,668
Initial investment: $900
Unrealized gain: $7,768e-factors:
Takes up 5.99% of invested holdings(without cash),
2.06% of invested holdings(with cash)

4. Business Overview Founded in 1976 Headquartered in Monett, Missouri
Providing technology solutions and payment processing services primarily for financial services organizations in the United States
Three business brands:

5. Press Release
Jack Henry & Associates Integrates Banno Mobile into Core Environments
Executive Changes at Jack Henry & Associates, Inc. Take Effect
New clients:
SESLOC Federal Credit Union
Dade County Federal Credit Union
AltaOne Federal Credit Union
Bank of Newington, Cleveland State Bank
Mountain Credit Union
Jack Henry & Associates Ends Fiscal 2016 With 8% Increase In Gross Profit
Jack Henry & Associates Ends Third Quarter Fiscal 2016 With 8% Increase In Revenue

6. Revenue Breakdown Support and service revenue (96%)
Hardware revenue(4%)
License revenue(<1%):

7. Acquisition Completed two acquisitions in the last three years
Complemented 29 acquisitions since the end of fiscal 1999
Fiscal Year
Company or Product Name
Products and Services
2016
Bayside Business Solutions
Portfolio management systems and factoring software
2014
Banno
Mobile banking, web development and data-enriched marketing technology
2010
iPay Technologies
Electronic bill payment and P2P services
PEMCO Technology Services
Payment transaction processing solutions for credit unions
Goldleaf Financial Solutions
Integrated technology and payment processing solutions

8. Financial Analysis

9. SWOT Strength: Effective management team
Strong financial positions: NO DEBT!
Developed client base
Significant investment in R&D
Weakness:
Growth relies heavily on acquisition
Internal control over financial reporting
Opportunity:
Sell outside traditional markets in the financial services industry
Introduce and innovate new products and services to generate new cross-sales
Outsourcing service
Threat:
Cyber security risk
Damage or destruction that interrupts outsourcing operations
Changing regulation in financial industry

10. Greenblat and DuPont Analysis
2012
2013
2014
2015
2016
Tax Burden
66.9%
68.4%
64.9%
66.8%
69%
Interest Burden
98.1%
97.7%
99.8%
99.6%
99.7%
Profit Margin
23%
22.6%
24.6%
25.3%
26.7%
Assets Turnover
63.4%
68%
69.8%
74.6%
Leverage Ratio
1.7
1.5
1.9
1.8
Return on Equity
15.8%
15.6%
19.3%
21.3%
25%

11. Industry Analysis - Competitors
Fidelity National Information Services, Inc. (NYSE:FIS)
offers a range of solutions in retail and enterprise banking, payments, capital markets, asset and wealth management, risk and compliance, treasury, and insurance;
financial consulting and outsourcing services
Fiserv, Inc. (NasdaqGS:FISV)
provides financial services technology worldwide.
Payments and Industry Products segment
Financial Institution Services segment
DH Corporation (TSX:DH)
provides lending, payments, enterprise, and global transaction banking solutions to banks, specialty lenders, credit unions, governments, and corporations worldwide.
personal and business check
channel solutions
Source: JKHY 10K(Jun 30, 2016)

12. Industry Analysis - Competitors

13. Porter’s Five Forces Rivalry Among Existing Competitors
Threat of New Entrants
Low
- High new entrants barrier
- Banks and credit unions are merging
Threat of Substitutes
Moderate
- Switching cost is high
Rivalry Among Existing Competitors
High
- Several competitors
- Significant consolidation among providers
Bargaining Power of Buyers
- Long-term contracts
- Low product differentiation
Bargaining Power of Suppliers
- Few gap in production line

14. Comparable Analysis - Valuation
Source: Capital IQ

15. Comparable Analysis - Valuation
Implied Price: $79.80
Source: Capital IQ

16. Growth Drivers Annual Growth: 7.1% Macroeconomics: Corporate-factors:
Gross Domestic Product
Disposable Income
E-commerce
Global Population Growth
Industry-factors:
Commercial bank
Credit Union
Competitions
Regulation
Corporate-factors:
Operation
Key employees
Products Innovation
Acquisitions
Intangible Assets
Annual Growth:
7.1%

17. Historical Annualized Return on Stock
Assumptions
WACC
Risk-free rate
1.7%
Beta
0.74
Risk Premium
4.5%
CAPM
5% (75%)
Historical Annualized Return on Stock
19.7% (25%)
Cost of Equity
8.7%

18. DCF Valuation
Intrinsic Value:
$ 81.50

19. Sensitivity Analysis

20. Monte Carlo Simulation
Simulation Variables
E-commerce
GDP
Corporate factors
Personal Disposable Income
Statistics
Mean
$81.3
Standard Deviation
$2.4
1 Std. Dev. Interval – 68%
$78.9, $83.8
3 Std. Dev. Interval – 99%
$74, $88.7

21. Potential Opportunities:
Recommendation
DCF Valuation $
Potential Opportunities:
Conservative growth projection
New CEO
Suitable Acquisitions
High investment in R&D
Current Price $
Hold
Comparable Valuation $