1. Sector Analysis Healthcare Anurup Upadhyay BUS 416 Investment Management 3/5/14

2. What Does Healthcare Constitute?

3. The Healthcare Industry A category of stocks relating to medical and healthcare goods or services Hospital management firms, HMOs, biotechnology and medical products’ providers Typically considered defensive stocks Typically less sensitive to business cycle fluctuations - Investopedia.com

4. More Specifically… Specialized Health ServicesHealth Care Plans Medical PractitionersDrugs - Generic Medical Labs &ResearchDrug Related Products Instruments & SuppliesManufacturers - Other Appliances & EquipmentManufacturers - Major Long-Term Care FacilitiesDrug Delivery HospitalsDiagnostic Substances Home Health CareBiotechnology - Yahoo Finance

5. S&P 500 Sector Breakdown - S & P Dow Jones Indices

6. SMIF Holdings in Healthcare As of 2/16/14 Company% HoldingSub-Sector United Health Group Inc.3.01%Healthcare Plans Stryker Corp.3.42%Appliances & Equip. Pozen Inc.1.62%Drug Manf. - Other Pfizer Inc.1.30%Drug Manf. - Major Parexel Int’l Corp.1.48%Labs & Research Total 10.83%

7. Leading Sub-Sectors In Terms OfLeaderValue Sector Average Market Capitalization Drug Manufacturers - Major63,211.42 B5477.2B P/E RatioBiotechnology376.550.8 ROEHospitals153.40%19.25% Dividend YieldMedical Practitioners5.7511.477 Net Profit Margin Drug Manufacturers - Major 17.50%6.39% - Yahoo Finance, as of Feb. 25, 2014

8. 2014 Global Healthcare Sector Outlook - Deloitte Touche Tohmatsu Limited Global health care spending as a percentage of Gross Domestic Product (GDP) to average 10.5% Annual average spending to increase by 5.3% Emerging markets: China, India, Indonesia, Russia, Mexico

9. Top Issues and Trends - Deloitte Touche Tohmatsu Limited Aging Population and Chronic Diseases Cost and Quality Access to Care Technology

10. The Good News for 2014 - PricewaterhouseCoopers LLP Biotech and medical devices and equipment rank in top fi ve for corporate venture capital investments Biotech second @ $644.95 million Medical devices & equipment fourth @ 340.73 million Research and development an economic engine in consumers’ eyes 69% agreed in 2013 while 61% agreed in 2011

11. A Case For Biotechnology Highest P/E in the industry; although volatile/unpredictable New discoveries for disease treatment conducive to growth/gains in stockholder value Patented biotech drugs enjoy a 12-year period of protection from competitors, guaranteeing favorable long-term returns Hurdles: Short-term losses FDA regulation

12. I am recommending that we buy 57 shares of Amgen, Inc. for approximately $126.18 per share for an approximate total of $7192.26. This represents approximately 2.87% of the portfolio. Why 2.87%? = S&P 500 Healthcare Weight – SMIF Healthcare Weight = 13.7% - 10.83% = 2.87%

13. Established in 1980; discovers, develops, manufactures and markets human therapeutics based on cellular and molecular biology advances Presence in more than 50 countries worldwide Specializes in treatment of cancer, kidney disease, rheumatoid arthritis, bone disease and other serious illnesses First-of-its-kind company to heavily research human therapeutics (eg. Immunotherapy) - Amgen Official Website

14. Amgen-Betta Pharmaceuticals joint venture established in China Amgen Astellas BioPharma K.K. announces Japan alliance Amgen breaks ground on innovative manufacturing facility in Singapore Amgen acquires Onyx Pharmaceuticals Amgen, Inc. Developments 2013-14 - Yahoo Finance, NY Times, Amgen Official Website

15. Amgen vs. S&P 500 - MSN Money, 2014

16. Overview & Comparison

17. Timeliness: 3; Safety: 1; Technical: 3 Strong product portfolio to facilitate continued growth, stability Broadening customer base (Onyx) Numerous clinical trials ongoing A nice addition to just about any account Value Line Highlights (Dec, 2013)

18. Thomson Reuters (Feb., 2014): What Do Analysts Say? Rec. TrendsFeb.Jan.Dec.Nov. Strong Buy5444 Buy8998 Hold141312 Underperform0000 Sell0111

19. Zack’s Rating (Feb. 28, 2014): Neutral – Outperform ($148) One of the five strong buy stocks Seeking Alpha (Feb., 2014) Amgen to see significant sales growth between now and 2017 and continued sales growth through 2023 due to growth from Onyx-acquired products Growth from Amgen's current pipeline products without even considering future pipeline products Important to select undervalued stocks and Amgen one of them What Do Analysts Say?

20. Questions