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

2. 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 - $ (as of 3/28/16)
52 wk range:
$ $193.78
Beta = 0.47
Cost Basis:
ULTA - $176.83

3. 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, mil
2014 = $2, mil

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

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

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

7. 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

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

9. 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

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

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

12. ULTA target price valuationPE
Relatively inexpensive
Close to industry avg
PEG
Lower, but close to avg

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

14. 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

15. 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
$ $123.37
Beta
1.41
Cost Basis
GILD - $67.25

16. 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

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

18. GILEAD sentiment index
Stock is out of favor at -2

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

20. 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

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

22. 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)

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

24. 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

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

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

27. 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

28. 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:
Low:
Cost Basis
MCK - $182.81

29. Sentiment Index
There is no sentiment index for MCK

30. 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

31. 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

32. 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

33. 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

34. Long Term Debt Long Term Debt has been inconsistent
It has tripled from
Score: -1

35. 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

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

37. 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

38. PEG/PE Ratio

39. Target Price & Valuation
Cost Basis
MCK: $182.81
52 Week High Low
$ $243.61
Target Price

40. Recommendation
HOLD