1. UNIVERSITY OF CONNECTICUT Student Managed Fund November 14, 2003 Undergraduate Portfolio Timothy BlaisPatrick MastanEmeka Okafor Kristen CandellaDaniel McCarthyTodd Shrier Edmund ChungPhilip OdackalTimothy Sweeney Julia Yelevich George Kruglov

2. Portfolio Objectives Outperform the S&P 500 index Develop a well-diversified portfolio within a fluctuating market environment Select holdings with low-medium risk Invest in companies with 15% required rate of return

3. Mission Employing a systematic approach that consists of both quantitative and qualitative elements in order to identify companies that possess an above average return potential.

4. Asset Allocation 100% Domestic Equities Diversified portfolio Starting fund sum: $200,577 Holdings with Low- Medium Risk

5. Equity Allocation

6. Procedures for Allocation Selection of companies based on potential growth and stability Consolidated research efforts Screening of equities based on future growth, qualitative and quantitative analysis within required constraints

7. Company Selection Quantitative Analysis Qualitative Analysis Consensus Portfolio Monitoring Re-optimization Stop Loss/Review Analysis Investment Process: A Disciplined Approach Portfolio

8. Equity Selection Criteria Perform an intensive, inferential analysis of the historical and current information contained in disclosed financial statements –Footnotes, shareholder reports, other filings Financial Strength –Companies who generate excess cash Probability of future projections Accounting Practices –Scrutinize accounting and reporting practices

9. Equity Analysis Begin analysis: –Company’s Past Historical data Past performance –Future Assumptions CF/Earnings Projections Growth Rate External forces Market Trend –Downside Risk Worst case scenarios Competition Financial Statements –Debts –Cash Flows –Sales/fixed asset ratio Value –Required rate of return –Intrinsic value –Yield –P/E Efficiency –ROI, ROE, Operating Profit Margin

10. Continue Analysis Annual Reports: Financial Statements –Debt, Capital, CF –Accounting Practices “front end” “purchase accounting” Unjust optimism Reversal of reserves to meet earning targets Different reporting methods Management –Board of directors –Insider Trading –SEC Filings –Sarbanes Oxley 404 302

11. Financial Models Value-line Model –Estimate of FV of equity in 10 years, discounted using our required rate of return to find buy price Discounted Cash Flow Model –Growth is analyzed to determine today’s stock price based on projected Cash Flows –ValuePro.com Earnings Yield Model –Measures yield power with earnings’ growth P/E Model –Measures the value of the stock price as determined by the market

12. Monitor and Review Review –20% Stop loss –15% -25% Earning Announcements Headline News Market factors Daily portfolio Performance

13. Portfolio Gains/Losses

14. Portfolio Statistics TickerQuantity Purchase Price11/12 CloseChange Total Change Current Value BUD20049.852.765.61%$592.0010,552.00 EAT25030.7233.117.22%$597.508,277.50 HDI32547.547.640.29%$45.5015,483.00 MO32547.150.256.27%$1,023.7516,331.25 PAYX40039.1740.142.42%$388.0016,056.00 PFE65031.1832.43.77%$793.0021,060.00 TJX72520.8522.627.82%$1,283.2516,399.50 104,159.25 Total Purchase: $99,471.25 Net Change: +$4,688.00 Percentage Change: +4.71%

15. Portfolio Optimization Earnings Reports Industry Changes Economic Reports Major Company News Continuously seek out new investments for changing market conditions Eliminate Emotion and Speculation

16. Conclusion Stock Selection and Market Conditions Stability and Confidence Surpass the S & P 500

17. SMF vs. S&P500

18. Thank You The Foundation The Advisory Board Faculty –Patrick Terrion, Professor Ghosh, Steering Committee, Advisory Board

19. QUESTIONS?