john l. grove college of business financial advisory

John L. Grove College of Business Financial Advisory

Council 2020-2021

Jonathan C. Moats, '10, Chair

Capital One Financial, LLC

Michelle R. Chopper, '02, CPA

Cohen & Company

Justin J. Ellsesser, '11, CFA, CAIA

AndCo Consulting

Chris J. Jackson, '97, AFIM

truNorth Financial Services

Joshua L. Jenkins, '12, CFP, ChFC

Jenkins Financial

Timothy G. Long, CFP, IAR

The Advisors at Cornerstone Financial, LLC

Louise Wisman Lovell

US Nuclear Regulatory Commission - Retired

David J. Morgan ‘80

Farmers Insurance - Retired

Joseph T. Nicholas, III, CFP ‘99

Wilmington Trust

Zach T. Paul, ‘09

Berkshire Hathaway Home Services

Lisa H. Percetti, ’15, CPA

Ernst & Young

Richard Powers, ‘98

Vanguard Group

Christopher S. Weber, '03

DeRock Electric Company, Inc.

Letter to Friends and Affiliates

John L. Grove College of Business

Shippensburg University

1871 Old Main Drive

Shippensburg, PA 17257-2299

www.ship.edu/business

Office: 717-477-1435

Fax: 717-477-4003

[email protected]

Dear Stakeholders,

As the Spring 2021 Investment Management Program (IMP) portfolio managers, it is our privilege to report the

Wisman Fund’s (‘Fund”) performance in 2020 and provide an update of our progress.

The IMP class is an invaluable program that allows students to put theory to practical applications. The IMP class

has provided us an opportunity to apply the knowledge and skills that we have learned in the classroom to a real-

world investing case that has set us apart from our peers. Managing the Fund has been an invaluable experience

that we will carry with us throughout the rest of our careers. Not only have we had the opportunity to manage a

real-dollar portfolio and gain portfolio management skills, but we have been able to enhance our leadership and

teamwork skills.

This past year, we emphasize working as a team and incorporating research into our investment decisions. During

the semester, we conduct analysis on sectors, industries, and the portfolio’s security holdings and formulate

strategies to outperform the portfolio’s benchmark, which consists of 80% the S&P 500 Index and 20% the

Bloomberg Barclays US Aggregate Bond Index. We overweight assets and equity sectors that we believe will

outperform the benchmark and underweight assets and sectors that likely will underperform the benchmark. We

continue to emphasize the long-term commitment of the Fund and invest in securities that will withstand boom

and bust cycles of the markets.

We are pleased to report that despite the unprecedented effects of COVID-19, the portfolio yields a return of

19.96% in 2020, outperforming the benchmark’s 16.22%. The portfolio has a risk-adjusted return of 19.09%,

beating the benchmark by 2.87%. The value of the portfolio increases from $225,950.07 at the end of 2019 to

$265,048.43 at the end of 2020.

In the following report, you will find the IMP portfolio’s investment objective, investment strategy, performance,

and security holdings. Please let us know of any comments, questions, or suggestions that you may have, as they

are always welcomed and appreciated.

We are truly grateful for your continued generosity and support of the Investment Management Program.

Sincerely,

The Spring 2021 IMP Portfolio Managers

.

Fall 2020 IMP Class (Back row, from left) Christopher Harootunian, Zachary Gibson, Steven Belmonte, Ryan Gandy, Christian Hennel, and

Matthew McGrath. (Front row, from left) Alejandro Morales, Joachim Theophile, Valentina Alonso, Mari Reott, and

Bethany Hey.

Ryan Gandy, Christian Hennel, Matthew McGrath.

Front, left to right: Alejandro Morales, Joachim Theophile, Valentina Alonso, Mari Reott, Bethany Hey

Spring 2021 IMP Class

(Back row, from left) Steven Belmonte, Ryan Crook, Matthew McGrath, Ryan Gandy, and Zack Whalen. (Front

row, from left) Benjamin Bridges, Valentina Alonso, Jody Boyer, and Philip Noss

Mission Statement

The Investment Management Program (IMP) aims to provide students with the skills, theory,

and concepts needed to become portfolio managers through a proactive educational

environment. The intent of the IMP is to provide academic scholarships for the finance program

in the future.

Table of Contents EXECUTIVE SUMMARY ........................................................................................................................................................... 1

INVESTMENT OBJECTIVE AND STRATEGY ............................................................................................................................ 2

PORTFOLIO CHARACTERISTICS ............................................................................................................................................. 3

EQUITY SECTOR WEIGHTS ..................................................................................................................................................... 4

PORTFOLIO PERFORMANCE .................................................................................................................................................. 5

PERFORMANCE ATTRIBUTION ............................................................................................................................................... 7

CONTRIBUTORS ...................................................................................................................................................................... 9

DETRACTORS ........................................................................................................................................................................ 10

TRANSACTIONS .................................................................................................................................................................... 11

DIVIDENDS............................................................................................................................................................................ 12

MOVING FORWARD .............................................................................................................................................................. 13

PORTFOLIO HOLDINGS ........................................................................................................................................................ 14

COMMUNICATIONS SERVICES ....................................................................................................................................... 14

CONSUMER DISCRETIONARY ......................................................................................................................................... 18

CONSUMER STAPLES ..................................................................................................................................................... 23

ENERGY ........................................................................................................................................................................... 27

FINANCIALS ..................................................................................................................................................................... 30

HEALTH CARE .................................................................................................................................................................. 35

INDUSTRIALS .................................................................................................................................................................. 41

REAL ESTATE ................................................................................................................................................................... 46

INFORMATION TECHNOLOGY ......................................................................................................................................... 48

MATERIALS ...................................................................................................................................................................... 53

UTILITIES ......................................................................................................................................................................... 56

EXCHANGE TRADED FUNDS ......................................................................................................................................... 60

THE PORTFOLIO .................................................................................................................................................................... 65

2020 Annual Report 1

EXECUTIVE SUMMARY

Investment Objective

To achieve a risk-adjusted return exceeding the

benchmark, which consists of 80% of the S&P 500 Index

and 20% of the Bloomberg Barclays U.S. Aggregate Bond

Index.

Investment Strategy

The IMP class invests in both fixed-income and

equity securities. We analyze securities using a top-

down approach and select stocks based on the

following characteristics:

• Companies have a proper business plan

and strategy.

• Companies have sound financial

fundamentals.

• Stock trades at a significant discount to

our estimate of fair value.

For fixed-income securities, our selection criteria

include:

• Credit rating is BBB or higher.

• Bonds with a longer duration than our

bond benchmark.

Asset Allocation

As of December 31, 2020, the fund’s value is

$265,048.43, with $228,627.81 (86%) in stocks and

equity ETFs, $26,088.49 (10%) in fixed-income ETFs,

and $10,332.13 (4%) in cash.

The portfolio consists of 35 stocks, one equity ETF, and

four fixed-income ETFs.

Portfolio Performance

The return of the portfolio in 2020 is 19.96%,

outperforming the benchmark’s 16.22%.

For risk-adjusted performance, the IMP portfolio’s

Sharpe ratio is 0.90, which is greater than the

benchmark’s 0.77. The portfolio has a Treynor ratio of

19.09%, which outperforms the benchmark by 2.87%.

Portfolio Characteristics

Price/Earnings (P/E) 38.89

Price/Book (P/B) 8.14

Return on Equity (%) 26.29

Dividend Yield (%) 1.83

Market Cap (Billion) 307.68

Beta 1.05

Asset Allocation

Equity 86%

Fixed Income 10%

Cash 4%

2 Investment Management Program

Investment Objective

To achieve a risk-adjusted return exceeding the benchmark, which consists of 80% of the S&P 500 Index and 20% of

the Bloomberg Barclays U.S. Aggregate Bond Index.

Investment Strategy

The 2020 IMP class utilizes a top-down analysis

beginning with an in-depth analysis of the economy,

sectors and industries, and companies to select ‘good’

investments. For equity, the IMP class follows a value

investing style, focusing on undervalued equities.

Investment Strategy for Equities

The portfolio managers choose to invest in stocks of

companies that meet the following investment criteria:

• Firm Fundamentals: Companies that have proper

business plans and strategies, unique

products/services, and competitive advantages are

deemed ‘good’ by our portfolio

managers. Additionally, companies must

demonstrate sound financial fundamentals, which

are essential to generate a positive cash flow.

• Undervaluation: The IMP class invests in stocks that

are traded at a discount to the class’ estimate of

intrinsic value.

Valuation Analysis

The IMP class considers a stock ‘undervalued’ if

intrinsic value estimate is significantly higher than the

market price. The following methods are utilized to

estimate intrinsic value of a stock.

• Discounted cash flow (DCF) models such as free

cash flow to equity discount models or dividend

discount models are used to estimate intrinsic

value. It is at the discretion of the analyst to decide

which DCF model is appropriate.

• The input parameters of the models (e.g. future EPS

growth rate), are derived from multiple financial

resources including Bloomberg, Morningstar,

Fidelity, Value line, and Yahoo! Finance.

• The IMP class also conducts a relative valuation

analysis to determine if a stock is undervalued. The

valuation ratios used include P/E, P/B, P/S, and

P/FCF.

Financial Ratio Analysis

A firm’s key financial ratios over the past several

years are compared to their competitors to determine

whether the company has sound financial

fundamentals. The financial ratio analysis is based

on, but not limited to, the following financial ratios:

• Financial Health Ratios

o Current Ratio

o Long-term Debt to Equity

o Debt to Equity

• Efficiency Ratios

o Receivable Turnover

o Inventory Turnover

o Asset Turnover

• Profitability Ratios

o Net Profit Margin

o Return on Assets

o Return on Equity

• Growth Rates

o EPS Growth Rate

o Sales Growth Rate

Investment Strategy for Fixed-Income Securities

Fixed-income securities are selected based on:

• Credit Risk: The class only invests in bonds with

an investment grade rating (e.g., BBB or higher)

by both Moody’s and Standard & Poor’s.

• Duration: The class focuses on bonds with a

longer duration than our bond benchmark.


Portfolio Characteristics

As of December 31, 2020, the value of the IMP portfolio is $265,048.43, consisting of $228,627.81 (86%) in equities,

$26,088.49 (10%) in fixed-income securities, and $10,332.13 (4%) in cash. The portfolio value has increased by

19.96% in 2020. The portfolio consists of 35 stocks, one equity ETF, and four fixed-income ETFs.

Some key portfolio characteristics are shown in the table below. All characteristics are the simple averages of the

equity holdings. The IMP portfolio has a P/E ratio of 38.89, which is higher than 28.30 of the S&P 500 Index. The IMP

portfolio also has a much higher P/B ratio than the S&P 500 Index’s 4.00, at 8.14. The portfolio’s relatively high P/E

and P/B ratios are due to several of our holdings, such as Brookfield Renewable Partners, The TJX Companies, Inc,

and Amazon. The average return on equity of the portfolio’s equity holdings is 26.29%, which is higher than the S&P

500 Index by approximately 14.45%. The average market capitalization of the portfolio’s equity holdings is $307.68

billion, which is significantly higher than the S&P 500 Index’s $66.12 billion. The larger market cap is mainly due to

several mega-cap stocks, such as Apple and Amazon. The portfolio has a beta of 1.05 and is slightly higher than that

of the S&P 500 Index, indicating that the portfolio is slightly riskier than the S&P 500 Index.

Top Ten Holdings

The portfolio’s top ten holdings based on investment weights count for 52.81% of the portfolio’s value (see the table

below). Amazon holds the most weight in our portfolio, at almost 10%. The following nine holdings and their weights

are available in the table below. It is worth noting that the top five holdings are also the top five performing securities

in terms of return contribution, albeit in a different order. This will be discussed later in the report.

Portfolio Value

Asset Class 2019 2020

Equity $192,884.64 (85%) $228,627.81 (86%)

Fixed-Income Security $20,364.66 (9%) $26,088.49 (10%)

Cash $12,700.77 (6%) $10,332.13 (4%)

Total $225,950.07 (100%) $265,048.43 (100%)

Portfolio Characteristics IMP S&P 500

Price/Earnings (P/E) 38.89 28.3

Price/Book (P/B) 8.14 4.00

Return on Equity (%) 26.29 11.84

Market Cap (Billions) $307.68 $66.12

Beta 1.05 1.00

Top 10 Holdings as of December 31, 2020

Market Value Weight

Amazon $26,055.44 9.83%

Apple $22,291.92 8.41%

Microsoft $16,681.50 6.29%

UnitedHealth Group Inc. $14,027.20 5.29%

NVIDIA Corporation $13,055.00 4.93%

The Walt Disney Company $10,870.80 4.10%

Accenture PLC Class A $10,448.40 3.94%

iShares Core U.S. Aggregate Bond Index $9,455.20 3.57%

Visa Inc. $8,749.20 3.30%

Procter & Gamble Co. $8,348.40 3.15%

Total $139,983.06 52.81%


Equity Sector Weights

The graph below shows the investment weights in the eleven equity sectors for the equity portion of the IMP portfolio

as of December 31, 2020. Information technology has the highest weight at 28.24%. This is followed by consumer

discretionary (16.10%) and health care (12.92%). The sectors with relatively low weights are real estate (2.03%),

energy (2.27%), and utilities (3.19%). Five equity sectors are overweight relative to the S&P 500 Index. These five

sectors include utilities, materials, information technology, consumer staples, and consumer discretionary. The

portfolio is 3.40% overweight in consumer discretionary, the most out of any sector. Six sectors are underweight

relative to the S&P 500 Index, including industrials, real estate, health care, financials, energy, and consumer services.

The portfolio is 2.49% underweight in communication services, the most out of any sector.

8.31%

16.10%

6.89%

2.27%

9.41%

12.92%

2.03%

6.51%

28.24%

4.13%

3.19%

10.80%

12.70%

6.50%

2.30%

10.40%

13.50%

2.40%

8.40%

27.60%

2.60%

2.80%

Communication Services

Consumer Discretionary

Consumer Staples

Energy

Financials

Health Care

Real Estate

Industrials

Information Technology

Materials

Utilities

Equity Sector Weights

S&P 500 IMP


Portfolio Performance

The chart below shows the average annual returns for the IMP portfolio and the benchmark in the 1-year, 3-year, and

5-year periods. As the chart shows, the IMP portfolio outperforms the benchmark in the 1-year, 3-year, and 5-year

periods. The 1-year return for the portfolio is 19.96%, which is higher than 16.22% of the benchmark. The

overperformance extends into the 3-year period, with a 14.96% return for the portfolio and a 12.53% return for the

benchmark. The portfolio’s 5-year average annual return is 13.65%, which is slightly higher than the benchmark’s

13.12 %.

Risk-Adjusted Return

We also evaluate the IMP portfolio’s performance by adjusting for risk. Risk-adjusted performance measures help

explain whether a portfolio's excess return is due to smart investment decisions or a result of the portfolio’s excess

risk. We use the Sharpe and the Treynor ratios to measure risk-adjusted return. The Sharpe ratio is a portfolio’s return

divided by the standard deviation of the portfolio’s returns. The Treynor ratio is a portfolio’s return divided by the beta

value of the portfolio. The higher the ratio, the greater the investment return relative to the amount of risk taken, and

hence the better the investment.

Risk of an investment is based on return variation. Return standard deviation is a measure of return volatility of an

investment. On the other hand, beta measures a security’s volatility relative to the market, which has a beta of 1.00.

A higher return standard deviation or beta indicates a riskier investment. The charts below report the return standard

deviations and beta values for the IMP portfolio and the benchmark in 1-year, 3-year, and 5-year. For both standard

deviation and beta, the IMP portfolio’s risk measures are slightly greater than those of the benchmark across all three

periods.

19.96%

14.96%13.65%

16.22%12.53% 13.12%

0%

5%

10%

15%

20%

25%

1-Year 3-Year 5-Year

Average Annual Return (%)

IMP Benchmark

22.17%

16.23%

13.25%

20.95%

15.08%

12.22%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%


Standard Deviation

IMP Benchmark

1.045

1.062 1.065

1.00 1.00 1.00

0.960

0.980

1.000

1.020

1.040

1.060

1.080


Beta

IMP Benchmark


The Sharpe and Treynor ratios for the IMP portfolio and the benchmark are reported in the charts below. The IMP

portfolio’s 1-year, 3-year, and 5-year Sharpe ratios are 0.90, 0.92, 1.03, respectively, while the benchmark’s Sharpe

ratios are 0.77, 0.83, 1.07, respectively. The Sharpe ratios indicate that the IMP portfolio outperforms the benchmark

in risk-adjusted return in the 1- and 3-year periods but not in the 5-year period. The Treynor ratios for the IMP portfolio

are 19.09%, 14.09%, and 12.82% for the 1-year, 3-year, and 5-year periods, respectively, compared to the

benchmark’s 16.22%, 12.53%, 13.12%. Similarly, the Treynor ratios indicate that the IMP portfolio outperforms the

benchmark in the 1-year and 3-year periods, but not over the past 5 years. The risk-adjusted return results indicate

that the IMP portfolio managers have greatly improved the portfolio’s performance over the past 3 years.

0.90 0.921.03

0.77 0.83

1.07

0.00

0.50

1.00

1.50


Sharpe Ratio

IMP Benchmark

19.09%

14.09% 12.82%16.22%

12.53% 13.12%

0%

5%

10%

15%

20%

25%


Treynor Ratio

IMP Benchmark


Performance Attribution

Performance attribution analysis is a breakdown of how a portfolio performs against the portfolio’s benchmark. The

analysis enables us to reveal insight on how the portfolio’s performance is attributed to the asset allocation and

security selection decisions. The IMP portfolio’s return in 2020 is 19.95%, which outperforms the benchmark’s

16.22% by 3.73% (see the table below). The performance attribution analysis indicates that this outperformance is

mainly due to the equity security selection decision, which provides a return contribution of 3.73%. Asset allocation

into cash and fixed-income security selection detract the overall portfolio performance. Overall, the IMP portfolio

managers did a better job in security selection than in asset allocation.

IMP Benchmark Performance Attribution

Weight Return Weight Return Allocation Selection Total

Equity 86.26% 22.72% 80.00% 18.40% 0.14% 3.73% 3.86%

Fixed-Income Security 9.84% 3.52% 20.00% 7.51% 0.88% -0.39% 0.49%

Cash 3.90% 0.05% 0.00% 0.05% -0.63% 0.00% -0.63%

Total 100% 19.95% 100% 16.22% 0.39% 3.33% 3.73%

Equity Performance Attribution

We also conduct a performance attribution analysis for the equity portion of the portfolio. In 2020, the equity portion

of the portfolio, which excludes equity ETFs, has a return of 25.96%, while the S&P 500 Index’s return is 18.40%. The

equity performance attribution analysis shows that the outperformance of 7.56% is slightly due to the 0.29% return

contribution from sector allocation. Allocating investment funds into the communication services, consumer staples,

information technology, and utilities sectors results in a negative return contribution. Allocating funds into the other

seven sectors contributes positively to the performance, especially the consumer discretionary and financials sectors.

*The equity performance attribution analysis does not include equity ETFs.

0

-0.12%

0.41%

-0.08%

0.02%

0.24%

0.03%

0.06%

0.08%-0.25%

0.04%

-0.14%

0.29%



Consumer Staples

Energy

Financials

Health Care

Real Estate

Industrials


Materials

Utilities

Total

Sector Allocation


The table below shows a summary of the return contributions from the equity sector allocation. The communication

services and information technology sectors both outperform the S&P 500 Index in 2020. The underweight in these

two sectors relative to the S&P 500 Index contributes a negative return. The consumer staples and utilities sectors

both underperform the S&P 500 Index. The overweight in these two sectors lead to a negative return contribution. The

energy, health care, financials, real estate, and industrials sectors all underperform the S&P 500 Index. An

underweight in these five sectors leads to a positive return contribution. The consumer discretionary and materials

sectors both outperform the S&P 500 Index. An overweight in these two sectors leads to a positive return contribution.

The chart below provides performance attribution results from stock selection. The results show that stock selection

provides a return contribution of 7.29%. The 7.29% return contribution from stock selection is mainly due to stock

holdings from the information technology and consumer discretionary sectors. The stocks from these two sectors

together contribute 8.05% return. For the stock holdings in the consumer discretionary sector, Amazon is a staple of

the sector holdings and has strong performance. Amazon’s 2020 return is extremely high at 76.3%, only getting

outperformed by Apple and NVIDIA. Amazon has been one of the best performers in the Wisman Fund and has an

overall holding return of 438.8% since November 17, 2016. Apple and NVIDIA have a return of 80.7% and 121.9%,

respectively, in 2020. These two stocks’ excellent returns make the information technology sector the best security

selection sector with a return contribution of 4.12%. Stock selections in the communication services, consumer

staples, industrials, and materials sectors are detractors.

0

-0.88%

3.93%

-0.35%

0.74%

0.46%

0.06%

0.00%

-0.54%

4.12%

-0.20%

-0.05% 7.29%



Consumer Staples

Energy

Financials

Health Care

Real Estate

Industrials


Materials

Utilities

Total

Security Selection

Underperform Overperform

Underweight

Energy

Financials

Health Care

Real Estate

Industrials



Overweight Consumer Staples

Utilities Consumer Discretionary

Materials


Contributors

As the portfolio performance attribution analysis above shows, strong security selection in the consumer discretionary

and information technology sectors mainly contributes to the IMP portfolio’s return outperformance than the

benchmark. Three out of the five top-performing stocks are in the information technology sector, including Apple,

NVIDIA, and Microsoft (see the table below). These top five performers have rebounded exceptionally well from the

COVID-19 pandemic that sent the stock market into a downward spiral during early March.

Top Five Performing Securities

Security Weight % 2020 Return % Return Contribution %

Amazon.com Inc (AMZN) 6.56 76.26 5.00

Apple Inc. (AAPL) 5.47 80.75 4.42

NVIDIA Corporation (NVDA) 2.61 121.93 3.18

Microsoft Corp. (MSFT) 5.25 41.04 2.15

UnitedHealth Group Inc. (UNH) 5.22 25.27 1.32

• The portfolio’s best performing holding is Amazon.com Inc. (AMZN), which provides a return contribution of

5.00%. Amazon is in the consumer discretionary sector and is in the internet and direct marketing retail

industry. Amazon’s success can be directly attributed to the outbreak of COVID-19, which caused an increased

demand in online shopping and delivery. Amazon initially projected a $1.5 billion loss for the second quarter

of 2020 due to high pandemic operating costs. Despite these initial projections, Amazon reported an EPS of

$10.30 and a revenue of $88.91 billion for the second quarter. These two metrics beat analysts’ expectations

by 605% and 9%, respectively. Its net income nearly doubles year-over-year from $2.63 billion in 2019 to

$5.24 billion in 2020. A core driver of Amazon’s financial success is a tripling in online grocery sales. The

outlook for Amazon remains positive as the company continues to invest in new employees, and demand is

expected to continue to growth as people remain online shopping.

• Apple Inc. (AAPL) belongs to the information technology sector and is in the technology hardware, storage, and

peripherals industry. Apple provides the portfolio with a return contribution of 4.42%. Apple, in its most recent

fiscal quarter of 2020, reports a revenue growth of 5.51% and a profit growth of 3.9% year-over-year. Apple’s

EPS is $1.68 in 2020, beating the consensus estimate of $1.41. Apple closes several retail locations in 2020

but derives its financial success from increased demand for electronic devices. Quarantine restrictions drive

demand for electronic devices used for working from home and entertainment use. Apple’s products like the

iPhone, MacBook, iPad, and miscellaneous accessories all contributed to a revenue growth of 5.51% in 2020.

• The third highest return contributor is NVIDIA Corporation (NVDA), which provides a return contribution of

3.18%. NVIDIA is in the information technology sector and is in the semiconductors industry. NVIDIA reports a

record revenue of $16.68 billion in 2020. This record setting revenue figure is a 52.7% increase from 2019.

NVIDIA also reports an adjusted EPS of $6.90 in 2020, which is an increase of 52.7% from the previous year

and beats analyst estimates. NVIDIA’s immense earnings and revenue growth over the past year can be

attributed to the effects of COVID-19. COVID-19 has propelled demand for NVIDIA’s computer chips as people

choose to stay inside and remote computing environments become more prevalent. The acquisition of

Mellanox Technologies Ltd. in April 2020 also boosted NVIDIA’s data center computing division revenue.

• Microsoft Corp. (MSFT) provides a return contribution of 2.15% and is the fourth highest performing security

for the fund. Microsoft is in the information technology sector and in the software industry. Microsoft has

outperformed analysts’ expectations in 2020 due to the pandemic increasing demand for personal and

professional computing. The COVID-19 quarantine restrictions have increased the use of Windows operating

systems and gaming services. Microsoft’s financials have reflected the increased demand, as the data for

2020 shows growth in revenue, net income, and diluted earnings per share. Revenue, net income, and EPS

grew by 16.72%, 12.85%, and 34.44%, respectively, year-over-year.

• UnitedHealth Group, Inc. (UNH) provides a return contribution of 1.32% and is the fifth highest performing

security in the fund. UnitedHealth is in the healthcare sector and the healthcare plans industry. UnitedHealth

has outperformed analysts’ expectations in 2020 due to the pandemic increasing demand for healthcare

services and therefore making healthcare companies more profitable. UnitedHealth’s financials have reflected

this uptick in demand for healthcare during the COVID-19 pandemic.


Detractors

On the other side of our portfolio, there are holdings that fell short in 2020. The bottom five performing securities are

from a wide range of sectors, including financials, consumer staples, communication services, and energy.

Bottom Five Performing Securities

Security Weight % 2020 Return % Return Contribution %

TC Energy Corporation (TRP) 2.22 -23.6 -0.53

AT&T Inc. (T) 1.73 -26.41 -0.46

Bank of America (BAC) 2.31 -13.94 -0.32

Lockheed Martin Co. (LMT) 1.56 -8.83 -0.14

iShares 20+ Year Treasury Bond ETF (TLT) 2.22 -5.70 -0.13

• The worst performing security is TC Energy Corporation (TRP), which has produced a -0.53% return

contribution. TC Energy corporation is in the energy sector and operates in the oil, gas & consumable fuels

industry. They are a major North American energy company that operates in three core businesses: natural

gas pipelines, liquid pipelines, and energy. The poor performance of TRP is partially due to the drastic drop in

oil prices in 2020, coupled with the pandemic restrictions.

• The second worst detractor is AT&T Inc. (T), which has produced a -0.46% return contribution. AT&T is in the

communication services sector and operates in the diversified telecommunication services industry. They are

the world's largest telecommunications company, the largest provider of mobile telephone services, and the

largest provider of fixed telephone services in the United States. AT&T Inc.’s return is down 26% in 2020, and

its revenue dropped by 5.21% in 2020 to $171.76 billion. In the last quarter, AT&T’s EPS dropped by 690.91%.

• Bank of America (BAC) is another detractor, which has produced a -0.32% return contribution. Bank of America

is in the financial sector and operates within the banks industries. They are an American multinational

investment bank and financial services holding company. One reason for this underperformance is due to the

Fed lowering the interest rates in 2020, which put pressure on banks.

• Lockheed Martin Co. (LMT) is also a relative laggard, which has produced a -0.14% return contribution.

Lockheed Martin Co. is in the industrials sector and operates within the aerospace & defense industry. They

are an American aerospace, arms, defense, security, and advanced technologies company with global

interests. Defense stocks are considered “safe/non-cyclicals”, less harmed by the COVID-19 economic

downturn and less buoyed by an economic reopening. As a result, Lockheed Martin did not take as great of a

hit due to the COVID-19 recession in Q1 and Q2 of 2020; however, as the market has improved since then,

Lockheed’s growth has become stagnant. This is in part due to the pandemic’s disruption to the global supply

chain.

• Our last detractor is iShares 20+ Year Treasury Bond ETF (TLT), which has produced a -0.13% return

contribution. iShares 20+ Year Treasury Bond ETF is a long-term government bond ETF. The iShares 20+ Year

Treasury Bond ETF seeks to track the investment results of an index composed of U.S. Treasury bonds with

remaining maturities greater than twenty years. The primary reason why this security is one of our top 5

detractors is due to the timing of our purchase. The transaction went through in March of 2020, right after the

pandemic hit. This was the relative peak of this security’s price in 2020. Since then, long-term interest rates

have been increasing, resulting in a decrease in the price of this long-term bond ETF.


Transactions

The Spring and Fall 2020 IMP classes made ten buying transactions with a total value of $21,668.61. The classes

also sold seven securities with a total value of $20,207.90. The transaction details are reported in the tables below.

Buy

Security Ticker Date Shares Price Value

PENN National Gaming PENN 2/18/2020 50 $36.84 $1,842.17

Vanguard Tax-Exempt Bond ETF VTEB 2/25/2020 50 $54.95 $2,747.25

iShares 20+ Year Treasury Bond ETF TLT 3/6/2020 30 $167.34 $5,020.20

Horizon Technology Finance Corp. HRZN 3/6/2020 200 $12.50 $2,500.00

Bristol-Myers Squibb Co. BMY 3/31/2020 14 $55.77 $780.71

The Walt Disney Co. DIS 4/14/2020 15 $106.35 $1,595.30

Johnson & Johnson JNJ 6/26/2020 10 $138.99 $1,389.90

Domino's Pizza Inc DPZ 10/23/2020 6 $393.08 $2,358.48

Brookfield Renewable Partners BEP 10/27/2020 20 $53.74 $1,074.80

Roper Technologies, Inc. ROP 11/12/2020 6 $393.30 $2,359.80

Sell

Security Ticker Date Shares Price Value

HealthPeak Properties PEAK 2/27/2020 35 $33.32 $1,166.10

Cisco Systems CSCO 3/6/2020 120 $38.00 $4,560.00

Cheniere Energy LGN 3/31/2020 20 $32.39 $647.80

Anheuser-Busch BUD 3/31/2020 25 $44.44 $1,111.00

Vanguard Tax-Exempt Bond ETF VTEB 8/28/2020 50 $54.53 $2,726.25

Anheuser-Busch BUD 10/5/2020 25 $55.29 $1,382.34

PowerShares S&P 500 High Dividend ETF SPHD 11/3/2020 254 $33.92 $8,614.41


Dividends

Total dividends received in 2020 is $4,140.86. The dividend income supports a large portion of the $5,000 annual

IMP scholarship. $2,942.76 (71%) of the total dividends is derived from the equity holdings. $624.52 (15%) is from

the equity ETF holdings. The remaining $573.58 (14%) is from the fixed-income ETFs. The table below shows the

monthly breakdown of the portfolio’s dividends.

Month Equity Equity ETF Fixed-Income ETF Total

January $164.06 $39.51 $0.00 $203.57

February $201.24 $40.08 $45.22 $286.54

March $349.34 $84.85 $48.33 $482.52

April $143.96 $39.67 $58.01 $241.64

May $219.38 $39.46 $54.15 $312.99

June $367.72 $106.58 $51.79 $526.09

July $150.63 $38.07 $51.15 $239.85

August $204.38 $38.03 $49.56 $291.97

September $378.58 $95.14 $43.42 $517.14

October $137.60 $37.45 $42.85 $217.90

November $207.58 $0.00 $41.76 $249.34

December $418.29 $65.68 $87.34 $571.31

Total $2,942.76 $624.52 $573.58 $4,140.86

$2,942.76

$624.52 $573.58

$4,140.86

$0.00

$500.00

$1,000.00

$1,500.00

$2,000.00

$2,500.00

$3,000.00

$3,500.00

$4,000.00

$4,500.00

Equity Equity ETF Fixed-Income ETF Total

Dividends 2020


Moving Forward

Looking into the future, the Spring 2021 IMP class will continue to follow the value investment style from the previous

IMP class. The portfolio managers will look for companies with ‘good’ stocks, which include stocks that are

undervalued. One method that the class will be utilizing moving forward is the implementation of the environmental,

social, and governance (ESG) rating. The ESG rating allows us to incorporate certain non-financial factors into the

evaluation of companies and could contribute to the success of a long-term holding. Environmentally, we expect

renewable energy and reducing carbon footprint to be a focus of the Biden administration; therefore, taking that into

account in our investing strategy is important. We believe that this factor makes it worthwhile to include ESG investing

as a part of our strategy. Along with our investment style revisions, the class considers COVID-19 to be an immense

focal point of the portfolio’s future. The United States continues to struggle with the rebound of the economy, and a

full reopening plan is unclear. The class discussed the economic outlook and how it would affect our asset and sector

allocation decisions. Our economic analysis suggests that we are currently at the midpoint of the recovery stage of the

business cycle. As vaccines become more accessible and the restrictions are lifted, we expect that the economy will

transit into the mid phase expansion stage of the business cycle by the end of the year.

Target Asset Allocation

The Spring 2021 IMP class has decided to follow the target asset allocation as determined by the Fall 2020 class.

Specifically, our target asset allocation is 90% in equity, 10% in fixed-income, and 0% in cash. The reasoning for

this target asset allocation is based on our expectation that stocks will continue to outperform fixed-income

securities in 2021. So far this year, long-term interest rates have been rising, resulting in a decline in bond prices.

We expect that interest rates will continue to rise. Therefore, the class has decided to overweight equity and

underweight fixed-income security relative to the benchmark.

Target Equity Sector Weights

We have also determined a target investment weight for each of the eleven equity sectors. The class determines

whether to under- or overweight a sector based on four factors, including a sector’s performance relative to the stage

of business cycle, return momentum, financial fundamentals, and valuation. For each sector, the portfolio managers

recommended to underweight, overweight, or market weight the sector relative to the S&P 500 Index. Each analyst

also recommended a target weight. The class has decided to overweight the communication services, consumer

discretionary, energy, financials, information technology, and materials sectors based on their financial fundamentals,

valuations, and historical performance in economic cycles. For the consumer staples, health care, real estate,

industrials, and utilities sectors, the class has chosen a target weight less than that of the S&P 500 Index.


COMMUNICATIONS SERVICES - UNDERWEIGHT

Sector Overview

Entertainment: This industry contains movies and entertainment

along with interactive home entertainment. The most notable

items of interest in this industry are gaming and movie producing

companies.

Interactive Media and Services: This industry includes companies

engaged in content and information creation or distribution. These

are companies where revenues are derived in pay-per-click

advertising, which is common among search engines, social

media platforms, online classifieds, and online review companies.

Media: This industry is made up of four sub-categories which are

advertising, broadcasting, cable & satellite, and publishing. Major

companies within media are commonly found as major networks,

news outlets, and agents of advertising mediums.

Wireless Telecommunication Services: This industry includes

providers of cellular and wireless telecommunication services.

Mobile service carriers and providers make up this industry.

Communication Services is the newest Global

Industry Classification Standard Sector recognized

by our benchmark, the S&P 500 Index. This sector

takes the place of the former telecommunications

sector and has captured pieces of the information

technology and consumer discretionary sectors. This

sector is comprised of companies that provide

communication services through fixed line, cellular,

wireless, high bandwidth and/or fiber optic cable

network. Additionally, companies within this sector

provide internet services such as access, navigation,

and internet related software and services. The

reason for this adjustment in the GICS stems from

the mergers and acquisitions of telecom companies

by media and internet companies given the massive

shifts in the consumer markets. The way consumers

define the capabilities of their smartphone has

expanded over the last decade and therefore, the

sector must adjust to accommodate.

Diversified Telecommunication Services: This

industry consists of alternative carriers, providers of

communications, and high-density data

transmission services. It also includes Integrated

communication Services, operators of primarily fixed

line telecommunications networks, and companies

providing both wireless and fixed line

communications services not classified elsewhere.

Performance* 1-Year 3-Year 5-Year

Sector 26.82% - -

S&P 500 18.40% 14.18% 15.22%

*Annualized Returns


AT&T, Inc. (NYSE: T)

Market Cap:

$200B

Sector:

Communication

Services

Industry:

Diversified Telecom

Services

Stock Type:

Large

Value

Price (12/31/2020):

$28.76

52-Week Range:

$27.90 - $38.57

Holding Return:

-15.7%

Business Summary

AT&T, Inc. is a company in the communication services sector that

provides communication, media, and technology services across the

globe. AT&T is broken up into four segments: communications,

WarnerMedia, Latin America, and Xandr. The first segment,

communications, provides wireless and wireline services, as well as

video, broadband, internet, and video entertainment services all

conducted by either satellite, IP-based, or streaming operations.

Communications also sells headsets, wireless computers, data cards and

various accessories (carrying cases and hands-free devices) through

company owned stores, agents, or third-party retailers. The second

segment, WarnerMedia, produces, distributes, and licenses television

programs and feature films. This segment distributes physical and digital

home entertainment products, as well as produces and distributes mobile

and console games. The Latin America segment offers services under

DIRECTV and sky brands such as video entertainment and audio

programming. The final segment, Xandr, conducts digital advertising.

Investment Rationale/Risk

▪ AT&T has acquired many assets in

its life, reaching a customer base of

over 170 million for products and

services to cultivate deeper

customer loyalty. The scale of the

company allows it to stay as a top

tier competitor shown in the 2020

revenue growth, which is larger than

the industry average.

▪ The company is one of the front

runners for 5G, a new technology

that could push mobile phone

companies into some of the biggest

gains they have seen in years.

▪ AT&T had purchased DirecTV with

the idea of creating their own

streaming and television services,

pushing them into a new business

segment that could grow with the

new age of streaming services in the

future.

Key Statistics 2016 2017 2018 2019 2020

Total Stock Return % 29.18 -3.97 -21.43 45.62 -21.08

Return on Assets % 3.22 6.95 3.97 2.57 -1.00

Return on Equity % 10.56 22.31 11.92 7.55 -3.10

Net Profit Margin % 7.92 18.34 11.34 7.67 -3.13

Total Asset Turnover 0.41 0.38 0.35 0.33 0.32

Financial Leverage 3.28 3.15 2.89 2.99 3.25

Operating Profit Margin % 15.1 14.9 15.3 16.23 14.72

Revenue Growth % 11.57 -1.98 6.36 3.42 -5.21

Operating Income Growth % -0.31 -3.42 9.55 7.16 -14.03

EPS Growth % -11.39 126.67 -40.13 -3.45 -33.68

Earnings Growth Estimates

Earnings Growth Estimate % Company Industry

2021 -0.94 2.00

2022 3.49 12.50

Past 5 Years 3.50 19.80

Next 5 Years 2.50 8.40

Stock Valuation Ratios Industry Peers

Ratio 2016 2017 2018 2019 2020

P/E 18.0 18.6 5.4 17.5 19.0 Return % ROE % P/B 2.1 1.9 1.1 1.6 1.2 Charters Co. Inc. 36.38 11.66

P/S 1.6 1.5 1.1 1.6 1.2 Comcast Corp CA 18.52 12.17

P/FCF 6.9 6.1 4.4 5.9 4.6 Verizon Comm. -0.29 27.55


Facebook (NASDAQ: FB)

Market Cap:

$792B

Sector:

Communication

Services

Industry:

Interactive

Media &

Services

Stock Type:

Large

Growth

Price (12/31/2020):

$181.18

52-Week Range:

$137.10 - $304.70

Holding Return:

51.1%

Business Summary

Facebook is the world’s largest social media company with platforms that

extend beyond the Facebook name such as Instagram, Messenger, and

WhatsApp. Facebook has over 2 billion active monthly users, which it

draws back consistently through the platform’s proprietary algorithm of

distributing user content. This algorithm understands and distributes

content based on search history, liked content, connections with other

users and more. The platform’s purpose is to connect people through

written posts, pictures, videos, and messages. In achieving this purpose,

companies pay for advertising placements in coordination with

Facebook’s algorithms to strategically place advertisements in front of

targeted consumers. 90% of Facebooks revenues come from their

advertising business segment.


▪ Facebook is the largest social media

platform, owning many different

popular apps such as Instagram,

Messenger, and WhatsApp.

▪ Facebook’s complex proprietary

algorithms of distribution of user

content promotes daily usage of the

platform, which generates more value

in advertising on the platform.

▪ Facebook’s reach across many

different platforms allows for ad

revenue from multiple different apps

and creates a significant amount of

advertisement sales for the company.

Key Statistics 2016 2017 2018 2019 2020

Total Stock Return % 9.9 53.4 -25.7 51.66 33.09

Return on Assets % 17.8 21.3 24.3 16.02 19.92

Return on Equity % 19.7 23.8 27.9 19.96 25.42

Net Profit Margin % 36.9 39.2 39.6 26.15 33.90




Revenue Growth % 54.16 47.09 37.35 36.76 21.60

Operating Income Growth % 99.63 62.57 23.31 24.51 36.21

EPS Growth % 170.54 54.44 40.45 22.59 56.92



2021 11.70 4.90

2020 20.30 24.60

Past 5 Years 35.40 16.50

Next 5 Years 19.20 22.20


Ratio 2016 2017 2018 2019 2020

P/E 44.4 34.2 19.7 32.9 31.2 Return % ROE % P/B 6.2 7.2 4.7 6.2 6.6 Alphabet, Inc. 31.03 19.0

P/S 13.5 14.3 7.4 8.9 10.0 Twitter, Inc. 68.95 -13.62

P/FCF 26.5 24.3 13.1 16.9 23.3 Tencent Holdings 63.88 9.79


The Walt Disney Co. (NYSE: DIS)

Market Cap:

$257.59B

Sector:

Communication

Services

Industry:

Media

Stock Type:

Large

Core

Price (12/31/2020):

$144.63

52-Week Range:

$85.98 - $181.18

Holding Return:

16.69%

Business Summary

The Walt Disney Company, together with its subsidiaries, operates as a

global entertainment company. The company’s media networks segment

operates cable programming businesses under ESPN, Disney, and

Freeform brands; broadcast businesses, including ABC TV Network, and

subscription video-on-demand services and in-home entertainment

formats. It’s Parks and Resorts segment owns and operates the Walt

Disney World Resorts in Florida and California. The company also

operates in the Studio Entertainment segment which produces and

acquires live-action and animated motion pictures to be distributed in

theatrical, home entertainment, and television markets. The company

was founded in 1923 and is based in Burbank, California.


▪ Disney’s Park and Resorts segments

have rebounded since the recession,

and they are continuing to look into

international markets for new parks

shown by the Disneyland Shanghai.

▪ Disney has ownership in many

different companies across many

different genres, including Hulu,

ESPN, and Marvel. This allows for the

reach of the company to be

extremely wide and diverse.

▪ Disney+ features a great opportunity

for the company to reach customers

of all ages and expand their share in

the streaming segment.

Key Statistics 2016 2017 2018 2019 2020

Total Stock Return % 0.60 4.71 3.59 32.92 25.27

Return on Assets % 10.42 9.56 11.09 6.89 -1.45

Return on Equity % 21.39 21.23 23.42 14.81 -3.32





Revenue Growth % 6.04 -0.89 7.79 7.74 -6.01

Operating Income Growth % 8.58 -3.38 6.95 -6.20 -67.99

EPS Growth % 16.94 -0.70 46.92 5.04 -1.58



Current Year -28.80 8.10

Next Year 32.10 37.20

Past 5 Years 5.22 1.50



Ratio 2016 2017 2018 2019 2020

P/E 18.23 15.10 15.00 23.07 19.2 Return % ROE % P/B 3.43 3.37 3.02 2.90 3.90 Comcast Corp. 18.52 12.17

P/S 2.98 2.97 2.78 3.46 5.0 Viacom Inc. -8.93 16.95

P/FCF 9.12 8.87 7.29 40.27 42.9 21st Century FOX -20.21 9.97


CONSUMER DISCRETIONARY - OVERWEIGHT

Sector Overview

Household Durables: The household durables industry manufactures

products that cannot be consumed immediately and are purchased

infrequently. Some examples would be appliances, and home and

office furnishings.

Hotels, Restaurants and Leisure: This industry contains hotels, fast

food restaurants, resorts, casinos, cruises, and other leisure

activities. Furthermore, hotels and restaurants tend to pursue

franchise business models.

Internet and Catalog Retail: The internet and catalog retail industry

consists of companies who operate through online marketplaces.

This industry has been experiencing rapid growth and has been a

strong point of our portfolio over the past few years as Amazon.com,

Inc. (AMZN) has seen significant growth.

Leisure Products: The leisure products industry contains companies

that focus on leisure activities and goods such as outdoor activities,

sporting goods, and toys. This industry is tightly tied to consumers’

discretionary income and confidence. An example of a company

within this industry is Callaway Golf Company (ELY).

Multiline Retail: The multiline retail industry includes operators of

department stores and other general merchandise retailers such as

large-scale supercenters that exclude food and staples retailing.

These companies are typically well-known with an example being

Macy’s Inc. (M).

Specialty Retail: The specialty retail industry includes retail

companies that specialize in selling specific categories of goods to

consumers. For example, The Home Depot Inc. (HD) sells home

improvement products to consumers.

Textiles, Apparel and Luxury Goods: Companies within this industry,

such as Under Armour, Inc. (UA), manufactures apparel, footwear,

and a variety of accessories

The consumer discretionary sector contains eleven

industries of businesses that sell nonessential

products and services where the demand is typically

more elastic. The performance of the sector is

heavily tied to the economic cycle, more specifically,

consumer confidence and discretionary income. As

of recent, the sector is seeing a shift to online

shopping. This, along with COVID-19 increasing the

demand for online shopping, explains our holding’s

positive returns in the sector.

Auto Components: The auto components industry

consists of companies that supply various auto

parts. The industry is highly competitive and cyclical,

causing demand to fluctuate and high volatility in the

industry’s profitability. The industry is also very

reliant on the ever-changing cost of raw materials

such as copper and steel.

Automobile: The automobile industry designs,

produces and markets cars, trucks, and other types

of land vehicles. The automobile industry’s demand

is highly sensitive to the economic cycle and is one

of the most capital-intensive industries with high

fixed costs. Because of this, the profit margins within

the industry can be highly volatile.

Diversified Consumer Services: The diversified

consumer services industry consists of companies

that provide specialized services that are not

classified elsewhere. One example of a diversified

consumer service would be H&R Block, Inc. (HRB),

who offers tax services to consumers and

businesses.

Distributors: The distributor industry includes

distributors and wholesalers of general merchandise

not classified elsewhere, including apparel,

replacement parts, and wholesale electronics.


Sector 29.58% 19.15% 17.07%

S&P 500 18.40% 14.18% 15.22%

*Annualized Returns


Amazon.com, Inc. (NASDAQ: AMZN)

Market Cap:

$1.631T

Sector:

Consumer

Discretionary

Industry:

Internet and

Catalog Retail

Stock Type:

Large

Growth

Price (12/31/2020):

$3,256.93

52-Week Range:

$1,626.00 - $3,552.00

Holding Return:

438.8%

Business Summary

Amazon.com, Inc. was founded in 1994 and is headquartered in

Seattle, Washington. Since then, Amazon has become one of the

world’s highest-grossing online retailers, with $125.56 billion in net

sales in the fourth quarter of 2020. They operate through the following

segments: North America, International, and Amazon Web Services

(AWS). It sells general merchandise and digital media content from

third-party sellers through its online storefront. The company also

manufactures and sells electronic devices such as the Fire Tablet, Fire

TV, and Echo devices. The sale of their general merchandise, digital

media content, and fees collected from third-party sales accounted for

50.6% of Amazon’s net revenue in 2020. Additionally, the AWS

segment offers cloud space and cloud computing, and allows for other

companies to sell their merchandise through Amazon. In 2020, AWS

constituted the second largest business operation of Amazon in terms

of revenue, accounting for 12.4% of their total revenue. The company

also offers Amazon Prime, a membership program, which provides free

shipping, access to streaming of movies and TV episodes, and other

services.


▪ Amazon dominates North American

online retail, and much of the regions’

youth consider it their one-stop-shop

for online retailers.

▪ With more than half of the world’s

Internet users coming from developing

markets, Amazon has sizeable

international growth opportunities for

its marketplaces, advertising, and

hardware assortment in regions like

Europe, Japan, and Southeast Asia.

▪ Amazon’s device portfolio are

intriguing customer acquisition and

retention tools while promoting the

other business segments Amazon

operates through such as the Amazon

Web Services.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 3.19 2.83 6.85 5.97 7.81

Return on Equity % 14.52 12.91 28.27 21.95 27.44





Revenue Growth % 27.08 30.80 30.93 20.45 37.62

Operating Income Growth % 87.46 -1.91 202.51 17.07 57.48

EPS Growth % 292.00 25.51 227.48 14.25 81.79



2021 18.34 15.20

2022 37.86 26.90

Past 5 Years 81.80 6.90

Next 5 Years 26.90 19.30


Ratio 2016 2017 2018 2019 2020

P/E 171.60 297.58 84.10 81.87 95.23 Return % ROE %

P/B 25.61 20.12 22.96 18.85 19.79 eBay Inc. 40.93 176.24

P/S 2.83 3.56 3.39 3.50 4.76 Alibaba Group Holding 9.73 23.93

P/FCF 24.76 35.52 28.10 26.27 29.95 Etsy Inc. 301.6 63.90


The TJX Companies, Inc. (NYSE: TJX)

Market Cap:

$81.897B

Sector:

Consumer

Discretionary

Industry:

Multiline Retail

Stock Type:

Large Core

Price (12/31/2020):

$68.29

52-Week Range:

$32.70 - $68.90

Holding Return:

25.2%

Business Summary

The TJX Companies, Inc. was founded in 1956 and is headquartered in

Framingham, Massachusetts. The company is broken into four segments:

Marmaxx, HomeGoods, TJX Canada, and TJX International. Through these

segments, TJX Companies offers a variety of apparel for the entire family,

including footwear and accessories; home fashions, including home

basics, furniture, decorative accessories, and cookware; jewelry and other

merchandise. The company operates 4,557 stores under the names TJ

Maxx, Marshalls, HomeGoods, Winners, HomeSense, T.K. Maxx and

Sierra Trading Post. Furthermore, TJK Companies also operates various e-

commerce sites including tjmaxx.com, tkmaxx.com, and

sierratradingpost.com.


▪ TJX Companies’ ability to offer brand

name apparel items at lower costs

than its competitors allows

consumers to continue to buy TJX’s

merchandise even if discretionary

income decreases, while remaining

competitive when discretionary

income increases.

▪ The international and e-commerce

presence that TJX has established

allows for diversification of the

revenue the company receives,

enabling it to be more competitive

and defensive in the retail industry.

▪ TJX’s diversified product range,

affordable pricing, and the various

store brands it operates allows for a

wide range of customers to

continually return to one or more of

the six store brands.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 20.13 18.85 19.36 21.56 17.01

Return on Equity % 53.15 52.13 54.00 60.01 59.51





Revenue Growth % 6.42 7.23 8.08 8.67 7.04


EPS Growth % 6.34 2.90 16.95 18.36 9.88



2021 651.61 0.60

2022 26.61 18.20

Past 5 Years -29.20 6.20

Next 5 Years 10.50 10.70


Ratio 2016 2017 2018 2019 2020

P/E 22.03 20.66 18.34 24.04 111.95 Return % ROE %

P/B 11.31 10.41 10.50 13.26 14.73 Macy’s, Inc. -31.60 8.80

P/S 1.54 1.45 1.46 1.85 2.46 Ross Stores, Inc. 5.73 49.84

P/FCF 14.92 14.56 15.86 21.61 12.71 Burlington Stores, Inc. 14.70 109.3


Domino’s Pizza, Inc. (NYSE: DPZ)

Market Cap:

$14.691B

Sector:

Consumer

Discretionary

Industry:

Restaurants

Stock Type:

Mid Growth

Price (12/31/2020):

$383.46

52-Week Range:

$270.10 - $435.60

Holding Return:

-2.4%

Business Summary

Domino's Pizza, Inc., through its subsidiaries, operates as a pizza delivery

company in the United States and internationally. It operates through

three segments: U.S. stores, international franchise, and supply chain.

The company offers pizzas under the Domino's brand name through

company-owned and franchised stores. As of August 17, 2020, it

operated approximately 17,100 stores in 90 markets. The company was

founded in 1960 and is headquartered in Ann Arbor, Michigan. Domino’s

has the largest international presence out of all its competitors, including

Papa John’s, Pizza Hut, and Little Caesar’s. In 2019, Domino’s

international franchises generated $241 million in revenue, and in 2020,

they were able to grow that by 4.4%. Global retail sales growth grew by

10.4% for Domino’s in 2020 as well.


▪ Consumer discretionary is a cyclical

sector that provides additional

returns to the portfolio during

economic upturn.

▪ Domino’s Pizza, Inc. operates in four

major business segments, with the

majority being their supply chain.

Their international franchises have

been increasingly profitable in the

last five years.

▪ While Domino’s large reliance on

debt is alarming, they have made

strides to minimize the risk

associated with it, including cash-on-

hand, interest coverage, and a very

high ROA.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 28.32 35.79 41.51 35.00 33.32

Return on Equity % - - - - -



Financial Leverage - - - - -


Revenue Growth % 11.55 12.75 23.13 5.42 13.78


EPS Growth % 23.92 35.58 43.22 14.49 29.60



2021 6.16 29.90

2022 14.82 27.40

Past 5 Years 27.10 3.40

Next 5 Years 12.00 12.40


Ratio 2016 2017 2018 2019 2020

P/E 39.91 36.06 31.79 32.82 32.89 Return % ROE %

P/B - - - - - Papa John’s 35.79 -

P/S 3.38 3.41 3.34 3.55 3.93 Yum! Brands 9.64 -

P/FCF 28.19 26.69 28.98 28.28 28.33 Chipotle 65.65 19.21

0

50

100

150

200

250

300

350

400

450

500

1/2 2/2 3/2 4/2 5/2 6/2 7/2 8/2 9/2 10/2 11/2 12/2

Pri

ce $

Date


Penn National Gaming, Inc. (NASDAQ: PENN)

Market Cap:

$16.221B

Sector:

Consumer

Discretionary

Industry:

Restaurants &

Casinos

Stock Type:

Mid Growth

Price (12/31/2020):

$86.37

52-Week Range:

$3.80 - $99.20

Holding Return:

134.4%

Business Summary

Penn National Gaming, Inc., together with its subsidiaries, owns and

manages gaming and racing properties, and operates video gaming

terminals. It operates through four segments: Northeast, South, West,

and Midwest. The company operates live sports betting properties in

Colorado, Illinois, Indiana, Iowa, Michigan, Mississippi, Nevada,

Pennsylvania, and West Virginia; Barstool Sports, an online sports betting

app in Pennsylvania; and online social casino, bingo, and online casinos

under the iGaming name in Pennsylvania and Michigan. It also owns and

operates horse racetracks in West Virginia, Pennsylvania, New Mexico,

and Ohio; and harness racetracks in Maine, Ohio, Pennsylvania, and

Massachusetts. As of December 31, 2020, the company owned,

managed, or had ownership interests in 41 gaming and racing properties

in 19 states. It owns various trademarks and service marks, including,

Ameristar, Argosy, Boomtown, Greektown, Hollywood Casino, Hollywood

Gaming, Hollywood Poker, L'Auberge, M Resort, and MYCHOICE. The

company was formerly known as PNRC Corp. and changed its name to

Penn National Gaming, Inc. in 1994. Penn National Gaming, Inc. was

founded in 1972 and is based in Wyomissing, Pennsylvania.


▪ Penn has proven its success over its

peers in the industry, with a 2020

return of five times its closest

competitor.

▪ Penn National Gaming is by far the

nation’s largest and most diversified

regional gaming company. It includes

both brick-and-mortar casinos, as

well as online gambling sectors.

▪ One risk associated with investing in

a gambling company is that it relies

on the gambling laws in each state. If

a state bans sports betting, then

Penn will suffer in that state.

Key Statistics 2016 2017 2018 2019 2020

Total Stock Return % -13.92 127.19 -39.90 35.74 237.91

Return on Assets % 1.99 9.28 1.15 0.35 -4.64

Return on Equity % - - 28.42 3.40 -29.85



Financial Leverage - - 14.99 7.66 5.57


Revenue Growth % 6.91 3.74 13.98 47.76 -32.50

Operating Income Growth % 6.77 2.02 14.62 17.49 -71.38

EPS Growth % - 326.05 -81.66 -60.22 -



2021 133.40 22.00

2022 35.93 34.00

Past 5 Years 36.33 -2.80

Next 5 Years 141.92 19.70


Ratio 2016 2017 2018 2019 2020

P/E 13.26 3.56 - 38.73 - Return % ROE %

P/B - 10.99 31.19 1.53 5.15 DraftKings Inc. 31.72 -70.68

P/S 0.42 0.99 0.56 0.59 2.77 MGM Resorts -4.82 -14.01

P/FCF 3.11 7.32 4.42 5.25 26.56 Boyd Gaming 43.35 -11.28


CONSUMER STAPLES - OVERWEIGHT

Sector Overview

Food & Staples Retailing: The food and staples retailing industry in

the consumer staples sector includes drug retail, food distributors,

food retail, and hypermarkets & super centers.

Food Products: The food products industry in the consumer staples

sector includes agricultural products and packaged foods & meats.

Household Products: The household products industry in the

consume staples sector includes producers of non-durable

household products (including detergents, soaps, diapers, and

other tissue and household paper products not classified in the

paper products Industry).

Personal Products: The personal products industry in the

consumer staples sector includes manufacturers of personal and

beauty care products (including cosmetics and perfumes).

Tobacco: The tobacco industry in the consumer staples sector

includes manufacturers of cigarettes and other tobacco products.

The consumer staples sector tends to perform

relatively well during the late and recessionary

stages of the business cycle. The consumer staples

sector accounts for about 6.4% of the S&P 500

index as of 12/31/2020 (6.74% of the IMP equity

sector). Companies in this sector provide those

goods and services considered essential for typical,

day-to day functions. Given this, competition is

extremely fierce in this sector and companies

compete under cost-leadership and product

differentiation strategies. This sector comprises

many low-price elasticity, red ocean products,

allowing for a very stable (but not remarkable)

growth year-over-year. The following sectors

comprise the consumer staples sector: beverages,

food & staples retailing, food products, household

products, personal products, and tobacco.

Beverages: The beverages Industry in the consumer

staples sector includes brewers, distillers &

vintners, and soft drinks.


Sector 10.13% 8.90% 8.89% S&P 500 18.40% 14.18% 15.22%

*Annualized Returns


Coca-Cola (NYSE: KO)

Market Cap:

$235.92B

Sector:

Consumer

Staples

Industry:

Beverages –

Soft Drinks

Stock Type:

Large

Core

Price (12/31/2020):

$54.84

52-Week Range:

$36.30 - $60.10

Holding Return:

106.03%

Business Summary

The Coca-Cola Company is the largest nonalcoholic beverage company in

the world, with over $33 billion in annual revenue in 2020. Its portfolio

includes a variety of carbonated and noncarbonated brands, including

Coca-Cola, Diet Coke, Fanta, Sprite, Minute Maid, PowerAde, and Dasani.

The firm has both concentrate and finished product operations, with

concentrate sales contributing roughly half of its revenues. Trademark

Coca-Cola contributes 45% of unit case volumes worldwide and

generates the majority of its revenue outside of the United States. The

company is a defensive stock during times of downturn. Their brand is

highly recognized, and their product is sold in more than 200 countries

worldwide (58 billion servings consumed per day).


▪ Coca-Cola’s investments in

distribution agreements, including its

relationship with Monster Beverage,

is evidence of the value of its strong

retail relationships; suggesting that

its growth and sales will be stable

into the future and resistant to

downturns in the market.

▪ Sparkling soft drinks account for

more than 60% of the firm's volume

in the U.S., (where per capita soda

consumption has been falling for the

last decade). This represents a

threat to the soft-drink industry.

▪ A large portion of sales stem from

restaurants, bars, and similar

venues. This could pose a risk if

these businesses were shut down for

an extended period of time.

▪ Also, with the acquisition of Costa,

there is potential for Coca-Cola to

expand Costa's coffee brands into

the ready-to-drink market and across

a wider range of geographies.

Key Statistics 2016 2017 2018 2019 2020

Total Stock Return % -0.23 14.23 6.60 20.27 2.04

Return on Assets % 7.36 1.42 7.52 10.52 8.92

Return on Equity % 26.85 6.22 37.79 49.61 40.48





Revenue Growth % -5.49 -15.41 -10.04 16.98 -11.41

Operating Income Growth % -2.4 -4.78 1.34 7.69 -6.73

EPS Growth % -10.78 -80.54 417.24 38.00 -13.53



2021 8.72 21.40

2022 8.02 15.80

Past 5 Years -0.30 -3.80



Ratio 2016 2017 2018 2019 2020

P/E 25.13 44.12 64.89 29.44 28.41 Return % ROE %

P/B 6.82 8.83 11.07 12.66 12.68 PepsiCo Inc 11.45 50.42

P/S 4.28 5.33 6.30 7.11 7.08 Keurig Dr Pepper Inc 12.61 5.63

P/FCF 20.48 24.87 29.37 24.57 26.57 Monster Beverage Co 45.42 30.21


Procter & Gamble (NYSE: PG)

Market Cap:

$342.63B

Sector:

Consumer

Staples

Industry:

Household &

Personal

Products

Stock Type:

Large

Value

Price (12/31/2020):

$139.14

52-Week Range:

$94.30 - $146.90

Holding Return:

173.15%

Business Summary

Procter & Gamble is the world's largest consumer product manufacturer.

In essence, when talking about consumer staples, or consumer non-

cyclical, Procter and Gamble is one of those companies you cannot

neglect to mention. With a lineup of brands including Tide laundry

detergent, Charmin toilet paper, Pantene shampoo, and Pampers

diapers, it is easy to see why this company is firmly entrenched in the

consumer staples sector. Their products are those you simply cannot go

without, and their sales reflect this. Procter & Gamble in recent years

made the decision to shed 105 of its lesser brands to focus on the 65

most profitable, and those brands are no slouches: 22 of them bring in

more than $1 billion each in annual sales.


▪ P&G, given its status, remains

competitive due to its ability to cuts

costs year-over-year (mostly due to

its experience and economies of

scale). This helps to form an

economic moat that helps solidify

P&G’s success in the industry.

▪ Core earnings per share were up

13%, and up 17% excluding the

impact of foreign exchange. They

increased their dividends by 6% and

returned $15.2 billion dollars of

value to shareowners – $7.8 billion

in dividends, and $7.4 billion in

share repurchase.

▪ Foreign exchange volatility and

threat of local peers (in emerging

markets) hampers P&G's profits,

given its distribution channels and

prevalence in the world market.

While significant, this threat can be

remedied by furthering cost-cutting

efforts.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 7.99 12.18 7.95 3.11 10.83

Return on Equity % 17.43 27.30 17.98 7.45 27.78





Revenue Growth % -14.39 -0.37 2.73 1.27 4.83

Operating Income Growth % -2.73 3.82 -1.75 0.88 13.55

EPS Growth % 51.23 51.49 -34.35 -61.04 246.85



Current Year 10.55 8.30

Next Year 6.89 6.00




Ratio 2016 2017 2018 2019 2020

P/E 23.82 24.5 24.0 79.55 26.60 Return % ROE % P/B 3.76 4.18 4.48 6.75 7.24 Unilever PLC ADR 10.96 45.43

P/S 3.65 3.82 3.63 4.63 5.03 Colgate-Palmolive 26.76 626.74

P/FCF 15.96 18.62 16.38 20.09 20.29 Church & Dwight 25.38 27.63


The Hershey Co. (NYSE: HSY)

Market Cap:

$31.72B

Sector:

Consumer

Staples

Industry:

Food

Products

Stock Type:

Large

Value

Price (12/31/2020):

$152.33

52-Week Range:

$109.90 - $161.80

Holding Return:

4.04%

Business Summary

The Hershey Company is a leading confectionary manufacturer that was

founded in 1894 in Derry Township, PA. They control over 45% of the $25

billion domestic chocolate market. Furthermore, they own 80 brands in

80 countries. Their unique taste and products create a loyal consumer

base. Net sales increased 2% in 2020. Revenue continues to grow by

about 3% over the past two years as they expand into different countries.

Hershey’s current executive team has shown the ability to cut cost by

moving factories to areas that have reduced labor cost and expand into

markets the company hasn’t had presence in.


▪ Hershey is a defensive stock in times

of economic downturn. They can be

negatively impacted by such events;

however, the impact tends to be less

significant than other industries and

companies experience.

▪ As the company grows and begins to

expand into foreign nations, taste

and packaging will need to adhere to

cultural differences to remain

competitive.

▪ The implementation of Project Next

Century program (340,000 square

feet addition to their west chocolate

factory) could experience delays and

have more cost than anticipated.

because of this, annual savings

could be less than expected.

▪ Availability of raw materials could

have a negative effect of supply

chain when disrupted, leading to less

than desirable future financial

results.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 13.25 14.14 17.77 14.51 14.81

Return on Equity % 80.73 92.05 101.77 73.28 64.36





Revenue Growth % 0.73 1.01 3.67 2.51 2.05

Operating Income Growth % -12.09 23.23 11.06 0.94 5.46

EPS Growth % 43.97 9.58 52.46 -2.15 11.90



Current Year 6.84 10.10

Next Year 5.80 10.30




Ratio 2016 2017 2018 2019 2020

P/E 27.44 33.88 22.14 24.25 26.72 Return % ROE %

P/B 24.52 29.07 18.20 17.51 15.35 Tootsie Roll Industries -9.32 7.75

P/S 3.03 3.22 2.93 3.92 3.98 Simply Good Foods 9.88 3.35

P/FCF 21.49 20.97 14.94 18.23 17.12 HOSTESS BRANDS 0.69 4.17


ENERGY - UNDERWEIGHT

Sector Overview

Oil, Gas & Consumables: This industry consists of five sub-

industries; integrated oil and gas, oil and gas exploration and

production, oil and gas refining and marketing, oil and gas

storage and transportation, and coal and consumable fuels. The

first sub-industry, integrated oil and gas, consists of companies

that conduct exploration and production of oil and gas and

participate in one or more of the following activities; refining,

marketing, transportation, or chemical manufacturing. The

second sub-industry, oil and gas exploration and production,

include the companies that operate by exploring for and

producing oil and gas and do not fall into any of the other sub-

industries. The third sub-industry, oil and gas refining and

marketing, consists of those companies that refine and market

oil and gas for sale. However, these companies do not

necessarily conduct exploration of oil and gas operations as well

as production of oil and gas. The fourth sub-industry, oil and gas

storage and transportation, is made up of companies that

transport/store oil and gas but do not necessarily produce oil

and gas. Pipelines and shipping services fall into this sub-

industry. The fifth sub-industry, coal and consumable fuels,

includes companies that produce and mine coal, coal related

products, as well as other consumable fuels. This sub-industry

does not have companies that produce industrial gases or mine

for coking coal fall within its scope.

The energy sector is comprised of companies that

produce and refine oil and gas-based products.

Energy companies do not distribute gas as a utility,

rather they conduct drilling, exploration, refinement,

production transportation and storage operations of

gas, oil, and similar consumable fuels. This sector

also includes the manufacturing companies that

produce the drilling equipment for the various

operations conducted in the sector. Energy

securities have historically outperformed the market

in mature stages of the business cycle.

Energy Equipment & Services: This industry consists

of two sub-industries. The first is oil and gas drilling.

This sub-industry includes companies that own the

drills and the contracts for the various drilling

services such as drilling wells. The second sub-

industry is oil and gas equipment and services. This

second sub-industry includes companies that

produce the equipment for the sector. This industry

produces the equipment and services for the

exploration, drilling and production of oil and gas in

the industry. The equipment includes the drills and

rigs for operations of the sector.


Sector -32.81% -14.96% -4.88% S&P 500 18.40% 14.18% 15.22%

*Annualized Returns


TransCanada Corp. (NYSE: TRP)

Market Cap:

$38.15B

Sector:

Energy

Industry:

Oil & Gas

Stock Type:

Large

Growth

Price (12/31/2020):

$40.72

52-Week Range:

$32.40 - $57.90

Holding Return:

-4.9%

Business Summary

TransCanada Corp is an energy infrastructure company operating out of

North America. The company conducts operations by utilizing liquids

pipelines, energy segments, U.S. natural gas pipelines, as well as

Canadian and Mexican natural gas pipelines. TransCanada transports

natural gas to power plants, distribution companies, industrial facilities,

interconnecting pipelines, and various other businesses. It owns two

pipelines; one private owned 81,500 kilometers and one partially owned

11,100 kilometers. They also own and manage midstream assets that

provide natural gas producer services. TransCanada operates 10 power

generation facilities powered by natural gas and nuclear fuel. Lastly,

TransCanada Corp owns and operates 118 billion cubic feet of

unregulated natural gas storage, as well as liquid pipelines infrastructure

for the transportation of Alberta crude oil supplies.


▪ TC Energy is pushing forward with

plans to build the Keystone XL

Pipeline, a project to move heavy

crude oil from the tar sands region of

Canada to Nebraska, where it will

then move on to refineries in Illinois

and along the Gulf Coast.

▪ Increasing environmental regulations

could hinder new crude pipeline

production. As these regulations

continue to be created and enacted,

TransCanada Corp could experience

setbacks with their designs of

pipelines, requiring a re-work on

designs for more environmentally

friendly designs in the future.

▪ TC Energy approximately has 95% of

EBITDA being derived from regulated

assets or long-term contracts,

ensuring stable revenue.

▪ Limited Canadian Western natural

gas takeaway capacity could cause

future production growth, as well as

the need for more infrastructure, to

be in jeopardy.

Key Statistics 2016 2017 2018 2019 2020

Total Stock Return % 43.77 12.07 -22.31 55.69 -19.11

Return on Assets % 0.16 3.44 3.83 4.01 4.47

Return on Equity % 0.72 14.50 15.25 15.25 16.45





Revenue Growth % 10.66 7.55 1.71 -3.10 -1.93


EPS Growth % - - 14.29 8.93 11.01



2021 3.18 5.40

2022 7.41 15.40

Past 5 Years 9.50 17.30

Next 5 Years 6.00 19.10


Ratio 2016 2017 2018 2019 2020

P/E - 31.3 13.1 16.2 11.0 Return% ROE % P/B 2.6 2.6 1.9 2.5 1.7 Enbridge Inc. -13.49 5.33

P/S 4.3 3.9 3.2 4.6 3.8 Pembina Pipeline -31.09 -3.70

P/FCF 11.1 9.7 7.4 8.8 7.0 Williams Companies Inc. -8.73 1.66

0

10

20

30

40

50

60

70

1/2 2/2 3/2 4/2 5/2 6/2 7/2 8/2 9/2 10/2 11/2 12/2

Pri

ce (

$)

Date


Cheniere Energy, Inc. (NYSE: LNG)

Market Cap:

$15.15B

Sector:

Energy

Industry:

Oil & Gas

Stock Type:

Mid

Growth

Price (12/31/2020):

$60.03

52-Week Range:

$27.10 - $67.10

Holding Return:

-6.20%

Business Summary

Cheniere Energy, Inc. is an international energy company headquartered

in Houston, Texas and is the leading producer of liquified natural gas

(LNG) in the United States. They provide clean, secure, and affordable

energy to the world, while responsibly delivering a reliable, competitive,

and integrated source of LNG, in a safe and rewarding work environment.

Cheniere’s operations, construction and development also support

energy and economic development across the United States. Cheniere is

the second largest LNG operator in the world. In February 2016, Cheniere

became the first company to ship LNG from a commercial facility in the

contiguous United States and now delivers to 3 markets worldwide.

Liquified natural gas is produced through a refrigeration process that

drops the temperature of natural gas down to -260 degrees Fahrenheit,

at which point it converts to liquid and its volume shrinks by 600 times,

enabling global transport in LNG carriers. LNG is non-toxic and non-

flammable. When burned, natural gas emits less carbon than coal and oil,

with significantly less traditional air pollutants. Additionally, all mercury is

removed during the LNG process.


▪ Total U.S. LNG export capacity is

expected to rise to 10.0 billion cubic

feet per day by the end of 2020 and

10.7 billion cubic feet per day (bcfd)

by the end of 2021 from the current

8.5 (bcfd).

▪ Cheniere, the nation's biggest

liquified natural gas (LNG) exporter

and biggest consumer of gas,

completed a project, Midship, which

includes nearly 200 miles (322

kilometers) of 36-inch (91-

centimeter) pipe to be put in service

no later than April 2020.

▪ Cheniere serves as a “middleman”

which purchases natural gas and

then sells it in the liquified form.

Cheniere holds long-term contracts

which removes a lot of risk.

▪ The greatest risk facing Cheniere is

the large capacity for expansion. The

expansion has caused the company

to report losses as they continue to

expand, with fear of loss of cost

controls.

Key Statistics 2016 2017 2018 2019 2020

Total Stock Return % 11.22 29.95 9.94 3.18 -1.70

Return on Assets % -2.86 -1.52 1.57 1.92 -0.24

Return on Equity % - - - -

Net Profit Margin % -47.54 -7.02 5.90 6.66 -0.91

Asset Turnover 0.06 0.22 0.27 0.29 0.26

Financial Leverage - - - -


Revenue Growth % 373.69 336.50 42.60 21.82 -3.82

Operating Income Growth % - 3215.81 43.81 17.32 10.61

EPS Growth % - - - -32.11 -



2021 -1,111.76 14.90

2022 49.42 9.40

Past 5 Years - 6.50

Next 5 Years 23.30 18.10


Ratio 2016 2017 2018 2019 2020

P/E - - 26.8 - 14.7 Return % ROE %

P/B -6.2 -6.8 -25.0 -17.2 -625.0 Southwest Gas Holdings -17.07 8.97

P/S 12.1 2.8 2.0 1.7 1.6 New Jersey Resources -17.34 11.42

P/FCF -49.8 15.4 7.8 10.0 10.2 Chesapeake Utilities 14.72 11.36

0

10

20

30

40

50

60

70

1/2 2/2 3/2 4/2 5/2 6/2 7/2 8/2 9/2 10/2 11/2 12/2

Pri

ce (

$)

Date


FINANCIALS - UNDERWEIGHT

Sector Overview

Consumer Finance: The division of retail banking that deals with

lending money to consumers. This includes a wide selection of

lines of credit, such as credit cards, mortgage loans and auto

loans. Generally, this type of bank charges a prime or subprime

rate.

Diversified Financial Services: This sector consists of companies

that offer many different products and services to meet

consumer needs. A few services include investment banking,

credit card issuing, and wealth management.

Insurance: An agreement in which an individual or entity acquires

a payment plan which gives them financial protection from

unfortunate events such as financial losses, property and

casualty, and liability. The type of insurance is tied to specific

risks which can be costly to the policy holder. Clients pay a

premium for the service and the amount someone pays depends

on the risk level. Interest rates are positively correlated with

insurance company products, meaning that lower rates accounts

for lower sales.

Mortgage REITs: A security vehicle which loans money to owners

of real estate, or individuals who have either acquired an existing

mortgage or mortgage-backed securities. Revenues are produced

primarily through the interest they earn from mortgage loans.

Thrift & Mortgage Finance: These types of financial institutions

refer to credit unions and mutual savings banks who offer saving

and loaning services. The sector differs in the manner that

institutions can borrow funds from the Federal Home Loan Bank

System.

In 2020, the financial sector has a -1.83% return,

heavily underperforming the S&P 500 Index. The

financial sector does not typically have a clear

pattern when the economy is in the late stage of its

life cycle. Declining interest rates and reduced

consumer spending cut into financial companies

profit margins in 2020.

Banks: The banking sector is the sector of the

economy devoted to holding financial assets for

others and investing those financial assets as

leverage to create more wealth. It is also regulated

by government agencies. After the housing market

crash in 2008, we saw tighter restrictions on large

banks with the passing of the Dodd-Frank Act in

2010. Historically, as the economy enters the late

stage of the business cycle, the banking sector

generally performs somewhat poorly.

Capital Markets: This method of operation pertains

to the activities of gathering funds from parties, then

lending the capital earned to other parties who need

the additional cash flow. The main function is to

optimize the efficiency of transactions and to avoid

needing legal involvement.


Sector -1.83% 4.01% 11.00% S&P 500 18.40% 14.18% 15.22%

*Annualized Returns


Bank of America (NYSE: BAC)

Market Cap:

$262.206B

Sector:

Financial

Services

Industry:

Banks -

Diversified

Stock Type:

Large Value

Price (12/31/2020):

$30.31

52-Week Range:

$18.00 - $35.70

Holding Return:

48.50%

Business Summary

Bank of America ranks as one of the top four financial institutions in the

United States, with more than $2.5 trillion in assets. The firm is

segmented into four categories: consumer banking, global banking,

global wealth and investment management, and global markets. Bank of

America's business-to-consumer transactions include deposits,

residential mortgages, credit and debit cards, and small-business

services. Its subsidiaries, Merrill Lynch and U.S. Trust private bank, offer

different brokerage and wealth management services to clients. Looking

at their commercial ties, Bank of America incorporates investment

banking, corporate real estate lending, and capital markets operations.


▪ Bank of America has emphasized

their preparedness for another

economic downturn. The firm has

been updating their risk

management systems and improving

their capital ratios in recent years.

▪ The financial institution has

maintained among the top four

credit card issuers in the United

States and has boosted their

commercial banking services

through their beneficial acquisition

of Merrill Lynch.

▪ Online banking is identified as the

next step for the industry. Digital

competitors are beginning to lure

customers away from the traditional

sense of operations (physical

branches). Bank of America

retention of customers should drop

along with its peers (Wells Fargo,

Chase, BB&T)

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 0.75 0.74 1.15 1.09 0.63

Return on Equity % 6.82 6.83 10.95 10.73 6.73





Revenue Growth % 1.77 4.36 4.46 -0.01 -5.46

Operating Income Growth % 10.43 14.87 16.49 -4.94 -40.72

EPS Growth % 14.50 4.00 67.31 5.36 -32.00



2021 33.16 31.00

2022 16.47 10.80

Past 5 Years 11.50 1.90



Ratio 2016 2017 2018 2019 2020

P/E 16.00 16.90 11.70 13.00 15.00 Return% ROE % P/B 0.90 1.20 1.00 1.27 1.10 Citigroup Inc. -20.27 5.56

P/S 3.00 3.70 2.90 3.71 3.10 Toronto-Dominion Bank 4.63 13.54

P/FCF 7.70 35.50 5.50 -30.30 6.30 Wells Fargo & Co. -41.64 1.04


Capital One Financial Corp. (NYSE: COF)

Market Cap:

$45.369B

Sector:

Financial

Services

Industry:

Credit Services

Stock Type:

Large Core

Price (12/31/2020:

$98.85

52-Week Range:

$38.00 - $107.60

Holding Return:

4.90%

Business Summary

Capital One Financial Corporation is a diversified banking company that

treats their consumers as their top priority. They typically operate in

consumer finance, with a focus in local banking and national lending.

Capital One is known for offering personal credit cards, investment

products, loans and online banking services. Located in Virginia, Capital

One’s client based, creative financial solutions have allowed them to

accumulate the eleventh most assets of any bank in the United States.


• Upon our purchase of Capital One

Financial Corporation, the company

declared a $0.40/share dividend

payout (quarterly). Capital One has

maintained this dividend.

• A focus on online bank accounts has

allowed Capital One to have a larger

national presence than its branch

network would allow. This enables

them to enjoy the benefits of being a

large bank without the expense.

• Amid the recent coronavirus

pandemic, Capital One offered relief

to their credit card holders who were

facing financial hardship. This has

improved their brand image while

also helping with customer

retention.

• Capital One continues to earn

returns on tangible equity that

exceed its cost of capital.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 1.02 0.47 1.55 1.36 0.59

Return on Equity % 7.41 3.54 11.37 9.47 4.02





Revenue Growth % 8.84 6.49 3.53 2.42 0.37

Operating Income Growth % -9.77 8.48 10.62 13.66 -52.91

EPS Growth % -2.55 -49.35 238.68 -6.51 -53.12

Earnings Growth Estimate %


2021 144.12 5.50

2022 12.55 13.00

Past 5 Years -4.60 9.60

Next 5 Years 14.70 12.20

. Stock Valuation Ratios Industry Peers

Ratio 2016 2017 2018 2019 2020

P/E 12.43 13.91 10.20 9.13 48.10 Return % ROE % P/B 0.87 0.96 0.70 0.81 0.80 JPMorgan Chase -6.26 11.34

P/S 1.80 1.87 1.88 1.36 1.60 Discover Financial 8.81 10.45

P/FCF 1.40 1.49 1.34 1.18 2.80 American Express -1.49 13.18

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Visa, Inc. (NYSE: V)

Market Cap:

$482.335B

Sector:

Financial

Services

Industry:

Credit Services

Stock Type:

Large Growth

Price (12/31/2020):

$218.73

52-Week Range:

$133.90 - $220.40

Holding Return:

231.90%

Business Summary

Visa incorporates a global payment network that links financial

institutions in over 200 countries. Visa’s credit technology can notify

banks of an electronic payment, then provides an instant

approval/decline decision for the transaction. The firm’s clients include

card-issuing banks, businesses, and consumers, which creates a

network. Visa’s main source of revenue is earned by charging fees to

customers based on both the dollar volume of card activity and the

number of transactions processed. In addition, the company provides

products such as digital wallets, risk management services, and

tokenization.


▪ Visa has shown strength as it

continues to hold one of the highest

operating margins in the industry.

▪ Historically, net margins tighten in

the late stage of the business cycle

due to lowered consumer activity.

However, as e-commerce continues

to grow, consumer card usage in

those transactions is likely to ease

the traditional expectation of

tightening margins.

▪ The Justice Dept. is investigating

Visa for potential anticompetitive

behavior in the debit card space.

▪ Recently, Visa started piloting

settlement of transactions on its

network with digital currency. Its

investment in crypto platform

Anchorage will aid in facilitating

these transactions. Visa is

positioning itself to maintain

dominance in the payment systems

of the future.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 11.37 9.80 14.49 17.04 14.16

Return on Equity % 20.79 23.76 35.65 41.83 36.01





Revenue Growth % 8.66 21.72 12.26 11.49 -4.92


EPS Growth % -3.88 12.90 57.86 20.36 -8.08



2021 8.93 7.90

2022 24.04 23.90

Past 5 Years 14.20 6.20

Next 5 Years 17.00 13.30


Ratio 2016 2017 2018 2019 2020

P/E 31.46 40.72 29.85 35.32 44.60 Return % ROE % P/B 6.84 9.71 10.48 14.26 15.50 eBay Inc. 40.93 176.24

P/S 12.49 14.88 14.91 18.58 22.30 Mastercard Inc. 20.08 104.38

P/FCF 33.79 29.66 24.17 33.39 46.50 PayPal Holdings Inc. 116.51 22.77

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Horizon Technology Finance Corp. (NYSE: HRZN)

Market Cap:

$243M

Sector:

Financial

Services

Industry:

Asset

Management

Stock Type:

Small Value

Price (12/31/2020):

$13.24

52-Week Range:

$7.02 - $13.69

Holding Return:

5.9%

Business Summary

Horizon Technology Finance Corp. is a specialty finance company that

lends to and invests in development-stage companies in the technology,

finance, healthcare information and services, and sustainability

industries. It seeks investments in the United States. Its investment

objective is to maximize its portfolios total return by generating current

income from debt investments and capital appreciation on investments.


▪ Horizon recently entered into an

agreement with Waterfall Asset

Management, LLC to manage $100

million in assets, and this amount

could be increased to $300 million.

This will give horizon access to larger

investment opportunities in

emerging companies.

▪ Horizon currently pays a quarterly

dividend of $0.30/share.

▪ EPS growth is expected to improve in

the coming quarters.

▪ Return on assets was 1.69% in

2020, down from 6.38% in 2019.

Return on equity in 2020 was

3.21%, down from 12.25% in 2019.

In 2020, Horizon’s total return

lagged the index by 8.84%.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % -1.89 4.05 5.19 6.38 1.69

Return on Equity % -3.29 6.99 9.66 12.25 3.21

Net Profit Margin % - 77.32 87.32 91.54 61.60

Total Asset Turnover - 0.05 0.06 0.07 0.03



Revenue Growth % - - 20.12 42.96 -51.50


EPS Growth % - - 36.14 28.32 -75.17



2021 0.00 -5.00

2022 8.47 4.40

Past 5 Years -1.60 -6.30

Next 5 Years N/A N/A


Ratio 2016 2017 2018 2019 2020

P/E - 20.0 10.6 10.3 18.9 Return % ROE % P/B 0.8 1.0 1.0 1.2 1.2 BlackRock 46.42 14.33

P/S 79.4 13.6 9.0 11.1 16.6 Stellus Capital -15.46 7.42

P/FCF 3.1 3.0 -2.6 -4.2 -13.1 WhiteHorse Finance 10.62 10.13

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HEALTH CARE - UNDERWEIGHT

Sector Overview

Health Care Equipment and Supplies: The health care equipment

and supplies industry in the health care sector includes

manufacturers of health care equipment, devices, supplies, and

medical products not classified elsewhere.

Health Care Providers and Services: The health care provider and

Services industry includes distributors and wholesalers of

healthcare products not classified within any other industry.

Life Sciences Tools and Services: The life sciences tools and

Services industry includes companies involved in drug discovery,

development, and production continuum by providing analytical

tools, instruments, consumables and supplies, clinical trial

services, and contract research services.

Health Care Technology: The health care technology industry in

the health care sector, includes companies providing information

technology services primarily to health care providers. It includes

companies providing application, systems and/or data processing

software, internet-based tools, and IT consulting services to

doctors, hospitals or businesses operating primarily in the health

care sector.

During an extremely volatile market, health care is

one of the top and most consistent performers.

According to the business cycle, health care has

consistently outperformed the S&P 500 Index in the

late and the recessionary stages. However, the

recession caused by Covid-19 was different than

other recent recessions. The health care sector

consists of six industries: biotechnology, health care

equipment & supplies, health care providers &

services, health care technology, life sciences tools

and services, and pharmaceuticals.

Pharmaceutical: The pharmaceutical industry

focuses on companies that take part in the research,

development, and manufacturing of

pharmaceuticals. Current political climates may

create deregulation, allowing pharmaceutical

companies the ability and the chance to have

increased margins and higher revenue streams. The

economy is heading into the late stage within the

business cycle, in which the industry historically

outperforms the S&P 500 Index.

Biotechnology: The biotechnology Industry in the

health care sector includes companies that are

engaged in research, development, manufacturing,

and/or marketing of products based on genetic

analysis and genetic engineering. The biotech

Industry is a fast-growing industry with increasing

demand for research and development. Most

biotech companies are forced on partnering with

larger firms to complete product development, due

to high costs and little revenues, in order to remain

competitive.


Sector 13.27% 13.25% 11.43%

S&P 500 18.40% 14.18% 15.22%

*Annualized Returns


Amgen, Inc. (NYSE: AMGN)

Market Cap:

$132.96B

Sector:

Health Care

Industry:

Biotechnology

Stock Type:

Large

Value

Price (12/31/2020):

$229.92

52-Week Range:

$177.05 - $264.97

Holding Return:

42.3%

Business Summary

Amgen Inc. is a biotechnology medicine company, which discovers,

develops, manufactures, and markets medicine for grievous illnesses

that has presence in approximately 130 countries worldwide. The

company focuses on human therapeutics and concentrates on

innovating novel medicines, based on advances in cellular and

molecular biology. It offers products for the treatment of

oncology/hematology, cardiovascular disease, inflammation, bone

health, nephrology, and neuroscience. Most of Amgen’s opportunity

lays in bottom-line growth and operating efficiency; however, several

early-stage oncology trials have the potential to boost Amgen’s long-

term pipeline growth.


▪ Amgen’s pipeline expects future

phase 3 productivity with drugs

such as the cholesterol drug

Repatha and migraine drug

Aimovig.

▪ Improvements in Amgen’s

manufacturing efficiency will benefit

top-end margins, as well as provide

a cost advantage to mitigate

competitors within the biosimilar

euro markets.

▪ Amgen’s pipeline gives it several

blockbuster biologic therapies.

Amgen’s intangible assets provide a

wide moat and competitive

advantage over its respective peers.

Key Statistics 2016 2017 2018 2019 2020

Total Stock Return % -7.47 22.08 14.98 26.81 -1.97

Return on Assets % 10.35 2.51 11.47 12.44 11.8

Return on Equity % 26.65 7.18 44.48 70.73 76.13





Revenue Growth % 6.14 -0.62 3.93 -1.62 8.83

Operating Income Growth % 15.63 1.83 2.91 -5.74 -5.53

EPS Growth % 13.02 -73.73 369.15 2.06 -4.43



2021 0.84 8.20

2022 8.84 1.00

Past 5 Years 10.10 14.30

Next 5 Years 8.40 20.60


Ratio 2016 2017 2018 2019 2020

P/E 14.6 15.7 14.5 18.5 18.5 Return % ROE %

P/B 3.5 3.9 8.5 13.0 12.1 Roche Holding AG 11.83 41.38

P/S 4.9 3.2 5.7 6.4 5.5 Gilead Sciences -6.16 0.60

P/FCF 12.8 5.6 12.0 15.2 12.56 Johnson & Johnson 10.62 23.97

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Bristol-Myers Squibb (NYSE: BMY)

Market Cap: $137.77B

Sector: Health Care

Industry: Biopharmaceuticals

Stock Type: Large Value

Price

(12/31/2020): $62.03 52-Week Range: $45.76 - $68.34

Holding Return: 11.1%

Business Summary

Bristol-Myers Squibb is one of the leading biopharmaceutical

companies operating in the United States. BMY specializes in producing

biopharmaceuticals, also known as biological medical products or

biologic, which is any pharmaceutical drug product manufactured in,

extracted from, or semi synthesized from biological sources. Margins

are expected to expand as the high margin Celgene drugs are added

into Bristol’s portfolio, but the high royalty rate paid on Eliquis to Pfizer

will weigh on gross margins for the firm. Long term expected earnings

will fall in the 2023 to 2027 period as generic pressures on key drugs

Revlimid and Eliquis emerge. On the flip side, Opdivo, which has

potential to significantly alter the treatment paradigm in several major

cancer settings. The projected risk-adjusted peak sales are forecasted

to be close to $10 billion.


• Bristol-Myers Squibb’s acquisition of

Celgene in November of 2019 was

initiated with the goal of creating a

leading biopharmaceuticals

company. The acquisition intends to

increase BMY’s distribution channels

for their top performing drug

industries.

• Bristol Myers Squibb receives

European Commission Approval for

Opdivo (nivolumab) plus Yervoy

(ipilimumab) with two cycles of

chemotherapy for first-line treatment

of metastatic non-small cell lung

cancer.

• A major risk factor to Bristol-Myers

Squibb and its biopharmaceutical

developments is loss of exclusivity

(LOE). For BMY’s top performers,

Eliqis and Opdivo, their LOE in the

United States is not until 2026 and

2028 respectively, with other drugs

LOE not arriving until as distant as

2029.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 13.62 2.99 14.36 4.17 -7.26

Return on Equity % 29.28 7.21 38.18 10.48 -20.16





Revenue Growth % 17.31 6.94 8.59 15.89 62.62

Operating Income Growth % 162.37 -23.99 48.35 15.53 -63.18

EPS Growth % 184.95 -76.98 393.44 -33.22 N/A



2021 15.68 8.20

2022 8.05 1.00

Past 5 Years 23.30 14.30

Next 5 Years 7.00 20.60


Ratio 2016 2017 2018 2019 2020

P/E 29.2 24.0 58.4 18.6 N/A Return % ROE %

P/B 6.2 6.7 6.2 8.1 2.75 AstraZeneca PLC 3.07 22.23

P/S 5.3 5.0 3.9 4.4 3.47 Eli Lilly & Co. 30.72 150.18

P/FCF 48.3 18.9 18.4 12.4 11.0 Merck & Co Inc. 59.50 38.76

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Cerner Corp. (NYSE: CERN)

Market Cap:

$24.00B

Sector:

Health Care

Industry:

Health Care

Technology

Stock Type:

Large

Growth

Price (12/31/2020):

$78.48

52-Week Range:

$53.08 - $80.90

Holding Return:

34.8%

Business Summary

Cerner Corp. designs, develops, markets, installs, hosts, and supports

health care information technology, health care devices, hardware, and

content solutions for health care organizations and consumers. It also

provides value-added services, including implementation and training,

remote hosting, operational management services, revenue cycle

services, support, and maintenance, health care data analysis, clinical

process optimization, transaction processing, employer health centers,

employee wellness programs, and third-party administrator services for

employer-based health plans. It operates through domestic and global

segments. The domestic segment includes revenue contributions and

expenditures associated with business activity in the United States. The

global segment includes revenue contributions and expenditures that are

linked to business activity in many different countries around the world.


▪ High switching cost create a narrow

economic moat for Cerner Corp. by

limiting bargaining power for

purchasers.

▪ Cerner Corp. integrates out

distributors by internally creating

and developing software, as well as

providing software services.

▪ Increasing complexity and know-

how of Medicare reporting, strong

upward trends of value-based pay

reimbursement arrangements, and

compliance/regulation of medical

records all increase demand for

health care information technology.

▪ Any errors or malfunctions within

the software pose a gigantic risk for

Cerner Corp. Additionally, IT

Infrastructure and software bears

risk to security and privacy of

information.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 11.37 14.33 9.56 7.78 10.82

Return on Equity % 16.32 19.90 12.97 11.45 17.73





Revenue Growth % 8.39 7.21 4.36 6.08 -3.28

Operating Income Growth % 16.63 5.43 -19.33 -22.47 15.55

EPS Growth % 20.13 38.92 -26.46 -12.70 52.73



2021 10.92 11.60

2022 13.33 22.90


Next 5 Years 12.00 18.40


Ratio 2016 2017 2018 2019 2020

P/E 25.1 33.6 21.1 47.0 30.66 Return % ROE %

P/B 3.6 4.9 3.4 5.2 5.45 McKesson Corp 59.50 38.76

P/S 3.5 4.5 3.3 4.3 4.39 Premier Inc. -6.34 N/A

P/FCF 13.9 18.9 12.6 18.6 23.92 Veeva Systems 93.55 19.33

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Johnson & Johnson (NYSE: JNJ)

Market Cap:

$414.31B

Sector:

Health Care

Industry:

Pharmaceuticals

Stock Type:

Large

Core

Price (12/31/2020):

$157.38

52-Week Range:

$109.16 - $157.66

Holding Return:

85.7%

Business Summary

Johnson & Johnson is identified as the largest holder of market share in

the healthcare industry. The firm is made up of three different

departments: consumer products, medical devices and diagnostics, and

pharmaceuticals. Johnson & Johnson's drug and device groups equate up

to 80% of sales and is their main driver of cash flows. Looking at the

firm's drug division, it is comprised of the following specialties: cardiology,

immunology, neurology, oncology, pulmonary, and metabolic diseases.

Their device products are primarily directed to orthopedics, surgery tools,

and vision care. The last segment of consumer focuses on beauty, oral

care, baby care, over-the-counter drugs, and women's health. About half

of the firm's total revenue is generated within the United States.


▪ Being the leader in a competitive

healthcare industry, the firm has

looked outside the United States to

build a stronger brand recognition

worldwide. The firm currently

operates in 60 countries worldwide

and continues to expand their

outreach through both acquisition

and Greenfield investments.

▪ J&J’s size allowed them the

resources to help lead the fight

against COVID-19 as the pandemic

ravaged the world in 2020 and then

began work on its own vaccine in

partnership with the US

government.

▪ The vaccine showed lower efficacy

in trials compared to others, but the

company is hoping for an

advantage with its single-

shot dosing, as opposed to the

double-shot approach of many of its

key rivals, as well as it is easier

storage.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 12.05 0.87 9.86 9.73 8.85

Return on Equity % 23.37 1.99 25.51 25.36 23.97





Revenue Growth % 2.59 6.34 6.71 0.59 0.64

Operating Income Growth % 15.73 -9.65 10.74 -0.97 -5.04

EPS Growth % 8.21 -92.07 N/A 0.36 -2.13



2021 18.06 8.30

2022 7081 4.40




Ratio 2016 2017 2018 2019 2020

P/E 20.2 24.3 24.9 27.8 24.75 Return % ROE %

P/B 4.3 5.1 5.3 6.6 6.43 Roche Holding AG 11.83 41.38

P/S 4.5 5.2 4.3 4.8 5.20 Gilead Sciences -6.16 0.60

P/FCF 19.0 17.8 16.0 16.9 19.47 Amgen Corp -1.97 76.13

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UnitedHealth Group, Inc. (NYSE: UNH)

Market Cap:

$331.74B

Sector:

Health Care

Industry:

Health Care

Providers and

Services

Stock Type:

Large

Growth

Price (12/31/2020):

$350.68

52-Week Range:

$187.72 - $367.95

Holding Return:

497.6%

Business Summary

UnitedHealth Group is known as the largest private health insurance

provider in the United States. Overall, UnitedHealth has captured the lead

in self-directed, employer-sponsored, and government-backed insurance

plans. With the health insurance giant’s unrivaled scale in managed care,

peers are known to struggle with competing against the firm. Medical

benefits are offered to nearly 50 million members across its international

platform. Along with its insurance assets, United's continued investment

behind its Optum franchises has created a healthcare services titan that

covers everything from medical and pharmaceutical benefits, to providing

outpatient care and analytics to both affiliated and third-party customers.


▪ United's integrated strategy, in the

eyes of IMP, has been successful as

the U.S. healthcare system slowly

shifts from a fee-for-service model to

a more aligned with the value and

outcomes produced for patients.

▪ Being the leader across multiple

sectors, such as government- and

employer-sponsored insurance

programs, ambulatory care, and

health analytics, the firm's revenue

and cash flow stream is less reliant

on a single source than many other

areas of the industry which sees the

firm constantly spending large

amounts of resources to continually

improve each sector.

▪ With the firm’s long record of

success, UnitedHealthcare’s current

executive team ranks among some

the top tier of leaders in healthcare

services. The management team has

been known for gaining impressive

strategic foresight and has

developed the business into what it

is today.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 10.35 2.51 11.47 8.49 8.30

Return on Equity % 26.65 7.18 44.48 25.32 25.02


Total Asset Turnover 0.31 0.29 0.32 .37 1.38



Revenue Growth % 17.66 8.76 12.36 6.85 6.40


EPS Growth % 20.63 47.86 13.71 17.56 11.86



2021 7.82 12.60

2022 16.26 8.00

Past 5 Years 19.90 16.80

Next 5 Years 12.70 12.40


Ratio 2016 2017 2018 2019 2020

P/E 23.6 25.1 19.5 21.4 20.1 Return % ROE%

P/B 4 4.7 4.8 5.1 5.1 Cigna 1.82 17.68

P/S 0.9 1.1 1.1 1.2 1.3 CVS Health Group -20.27 5.56

P/FCF 10.5 14.6 22.9 19.5 15.1 Anthem Inc. 7.57 14.08

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INDUSTRIALS - UNDERWEIGHT

Sector Overview

Building Materials: The building products industry produces

building components, home improvement products, and

equipment.

Commercial Services & Supplies: This industry includes

companies providing commercial printing, environmental and

facilities services, office services and supplies, diversified support

service, and security and alarm services.

Construction & Engineering: The construction & engineering

industry engages mainly in non-residential construction.

Electrical Equipment: This industry includes companies that

produce electric cables, electrical components or equipment, and

manufacturers of power-generating equipment and other heavy

electrical equipment.

Diversified Industrials: This industry includes diversified industrial

companies with business activities in three or more sectors, none

of which contributes most revenues.

Machinery: The machinery industry includes manufacturers of

construction, farm and industrial machinery, and heavy trucks.

Marine: The marine industry includes companies providing goods

and passenger maritime transportation.

Historically, the industrial sector does not have

strong growth in the late stage and underperforms in

the recession stage. As consumers spend less and

save more, this sector stagnates because these

companies do not expand. The industrials sector

has a market cap of $5.94 trillion, which consists of

fourteen industries: aerospace & defense, air freight

& logistics, airlines, building products, commercial

services & supplies, construction & engineering,

electrical engagement, industrial conglomerates,

machinery, marine, professional services, road &

rail, trading companies & distributors, and

transportation infrastructure.

Aerospace & Defense: The aerospace & defense

industry includes manufacturers of civil or military

aerospace and defense equipment, parts, or

products. Historically, this is one of the stronger

performing industries in the Industrial sector.

Air Freight & Logistics: The air freight and logistics

industry includes companies providing air freight

transportation, as well as courier and logistics

services.

Airlines: The airlines industry includes companies

offering mainly passenger air transportation.

Trading Companies & Distributers: This industry

includes trading companies and other distributors of

individual equipment and products.


Sector 10.83% 7.54% 13.06% S&P 500 18.40% 14.18% 15.22%

*Annualized Returns


Honeywell International, Inc. (NYSE: HON)

Market Cap:

$152.57B

Sector:

Industrials

Industry:

Specialty

Industrial

Machinery

Stock Type:

Large Core

Price (12/31/2020):

$212.70

52-Week Range:

$101.10 - $216.70

Holding Return:

17.1%

Business Summary

Honeywell International, Inc. operates as a diversified technology and

manufacturing company worldwide. The company has operations in the

United States, Europe, Canada, Asia and Latin America. Honeywell

International, Inc. was incorporated in 1985 and has its’ headquarters in

Charlotte, North Carolina. Today, it operates through four business

segments including, aerospace, building technologies, performance

materials and technologies, and safety and productivity solutions. The

company is a global leader in refrigerants, aerosols, and foam-insulation

blowing agents that are used to replace ozone-depleting

Chlorofluorocarbon and Hydro Chlorofluorocarbons. These products also

improve the energy efficiency of homes, appliances, and commercial

refrigeration systems.


▪ Tariffs threaten Honeywell’s supply

chain and can impact its cost inputs.

▪ Aerospace segment can have a long

downturn period depending on the

demand for air travel.

▪ Honeywell’s business is split 60/40

between operating expenses and

capital expenditure cycles so they do

not worry as much about the macro

environment.

▪ Rapid changes in technology can

affect the safety and productivity

segment of Honeywell Inc. by

causing diminished returns on

capital projects.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 9.30 2.92 11.55 10.55 7.75

Return on Equity % 25.54 9.03 38.16 33.50 26.52





Revenue Growth % 1.87 3.13 3.13 -12.18 -11.09

Operating Income Growth % -2.12 7.00 -6.24 2.18 -16.86

EPS Growth % 2.65 -65.48 319.63 -6.35 -20.10



2021 10.85 13.10

2022 12.45 23.10


Next 5 Years 10.30 14.00


Ratio 2016 2017 2018 2019 2020

P/E 18.13 23.24 37.22 20.68 30.52 Return % ROE %

P/B 4.59 5.46 5.29 6.95 8.09 Carlisle Co. Inc. -2.23 12.36

P/S 2.29 2.99 2.34 3.52 4.57 Danaher Corp 45.20 10.77

P/FCF 16.82 20.31 14.24 22.29 25.16 ITT Inc. 5.12 3.45

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Lockheed Martin (NYSE: LMT)

Market Cap:

$105.54B

Sector:

Industrials

Industry:

Aerospace &

Defense

Stock Type:

Large Value

Price (12/31/2020):

$354.98

52-Week Range:

$276.80 - $439.85

Holding Return:

30.7%

Business Summary

Lockheed Martin Corporation, a security and aerospace company,

engages in the research, design, development, manufacture, integration,

and sustainment of technology systems, products, and services

worldwide. It operates through four segments: aeronautics, missiles and

fire control, rotary and mission systems, and space. Lockheed Martin is

the largest defense contractor worldwide and is the market leader in next-

generation fighter aircrafts. The company is involved in the research,

design, development, integration, and sustainment of advanced

technology products and services. The company provides services in

cybersecurity, system integration, logistics, and engineering. The

applications of the services are in defense, civil, or commercial needs.

The company has contracts with the Department of Defense, foreign

military Sales, and a small amount of sales with U.S. commercial and

other customers.


▪ Lockheed has a strong hold on the

market due to the F-35 fighter

program and missile exposure. Their

contracts have a strong barrier to

entry against competitors, ensuring

future sustainability.

▪ The defense budget caps will return in

2020, hitting Lockheed’s growth.

Even if investors see growth in the

increase in budget in 2019, this cap

in 2020 can halt the company’s rapid

growth providing a slower, lower

return for investors.

▪ The slower production process for F-

35 will restrain growth and tougher

contracts will hurt margins. This can

hurt quarterly earnings, but the

company has stressed the goal in

improving operations in making these

products, enabling higher sales and

potential contracts. As of now, this

can be seen as a short-term threat for

investors.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 10.94 4.24 11.04 13.48 13.91

Return on Equity % 230.12 483.57 1419.4 275.60 149.49





Revenue Growth % 2.42 8.04 5.32 11.25 9.34


EPS Growth % 52.62 -60.61 155.30 24.79 10.71



2021 7.43 24.40

2022 6.42 19.70

Past 5 Years 15.90 7.30

Next 5 Years 6.00 10.30


Ratio 2016 2017 2018 2019 2020

P/E 18.81 26.04 24.80 18.51 15.16 Return % ROE % P/B 31.09 43.61 78.02 28.11 20.07 Boeing Co. -33.66 -

P/S 1.52 1.89 1.39 1.90 1.56 Airbus SE -25.66 -187.74

P/FCF 13.17 16.48 30.94 13.78 12.72 Raytheon Co 43.41 13.80

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3M Company (NYSE: MMM)

Market Cap:

$112.90B

Sector:

Industrials

Industry:

Specialty

Industrial

Machinery

Stock Type:

Large Core

Price (12/31/2020):

$174.79

52-Week Range:

$114.00 - $182.50

Holding Return:

124.3%

Business Summary

3M Company was founded in 1902 and has its headquarters in St. Paul,

Minnesota. 3M Company develops, manufactures, and markets various

products worldwide. It operates through four business segments: safety

and industrial, transportation and electronics, health care, and consumer.

The consumer segment provides home improvement, home care, and

consumer health care products, as well as stationery and office supplies

to various consumers. This segment is also involved in the retail auto

care business. It offers its products through various e-commerce and

traditional wholesalers, retailers, jobbers, distributors, and dealers, as

well as directly to users. 3M has a strong emphasis on product

development and research and development among their segments.

Each segment, utilizing similar technology enabling efficient sharing of

business resources. Most of 3M’s revenues are from outside of the

United States. The company employs 96,163 people.


▪ 3M has a strong product portfolio,

adding value to the consumers. These

products are created through intense

research & development, making it

difficult for competitors to recreate.

This is evidence that the company will

continue innovating, remaining a top

competitor for the future.

▪ Historical data shows for every dollar

put into R&D, the company will make

$9, which is much higher compared

to its peers. Historically, the company

also puts more capital into research

and development; if these trends

continue, the competitors will be

forced to play catch up with 3M,

making 3M a strong investment

choice.

▪ The company may show a lack of

growth during the upcoming

recessionary phase since it is an

Industrial security. However, 3M has

products in Health Care to hedge

against this risk. This hedge allows

the stock to potentially grow even in

the market downturns.

Key Statistics 2016 2017 2018 2019 2020

Total Stock Return % 21.49 34.44 -16.74 -4.39 2.41

Return on Assets % 15.39 13.71 14.36 11.26 11.70

Return on Equity % 45.90 44.44 50.09 46.02 46.96





Revenue Growth % -0.55 5.14 3.50 -1.92 0.15

Operating Income Growth % 3.99 0.15 -7.93 -9.01 11.75

EPS Growth % 7.65 -2.82 12.11 -12.15 18.44



2021 9.27 13.10

2022 9.11 23.10


Next 5 Years 9.50 14.00


Ratio 2016 2017 2018 2019 2020

P/E 22.49 26.27 25.54 20.93 20.49 Return % ROE % P/B 8.88 11.53 10.72 9.48 8.46 Honeywell Int. -6.32 33.50

P/S 3.69 4.65 3.53 3.24 3.21 Siemens AG ADR 23.18 9.54

P/FCF 16.34 21.89 19.15 14.83 12.82 General Electric Co -2.87 16.38

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Roper Technologies, Inc. (NYSE: ROP)

Market Cap:

$44.02B

Sector:

Industrials

Industry:

Industrial

Conglomerates

Stock Type:

Large Core

Price (12/31/2020):

$431.09

52-Week Range:

$240.00 - $455.70

Holding Return:

9.6%

Business Summary

Roper Technologies, Inc. designs and develops software, and engineered

products and solutions. The company offers management, campus

solutions, laboratory information management, enterprise management,

information solutions, transportation management, financial and

compliance management, cloud-based financial analytics and

performance management, and diagnostic and laboratory information

system software, and software, services, and technologies for foodservice

operations. It also provides cloud-based data, collaboration, and

estimating automation software; electronic marketplace; visual effects

and 3D content software; wireless sensor network and solutions; cloud-

based software solutions; supply chain software; health care service and

software; RFID card readers; data analytics and information; pharmacy

software; and toll system and products, transaction and violation

processing services, and intelligent traffic systems.


▪ Roper Technologies historically has

outperformed its peer in a difficult

economy partly due to its high

tendencies on the acquisition front.

▪ Roper relies on large amounts of

deferred revenue because software

companies receive cash far in advance.

Roper uses this cash to invest in

businesses at incrementally higher

rates of return.

▪ Roper purchases businesses that have

little strategic rationale with one

another. Their business model carries a

lot of execution risk because the

company will eventually run out of

purchase targets.

Key Statistics 2016 2017 2018 2019 2020

Total Stock Return % -2.90 42.23 3.54 33.60 22.28

Return on Assets % 5.38 6.79 6.39 10.60 4.51

Return on Equity % 11.88 15.36 12.94 20.52 9.51





Revenue Growth % 5.79 21.57 12.67 3.38 2.99


EPS Growth % -6.13 46.03 -3.62 85.86 -46.61



2021 14.60 13.20

2022 5.96 20.00

Past 5 Years 14.10 3.50

Next 5 Years 10.50 13.70


Ratio 2016 2017 2018 2019 2020

P/E 27.33 37.59 24.54 32.17 29.03 Return % ROE % P/B 3.26 4.11 3.65 4.30 4.45 Pentair plc 17.40 17.66

P/S 5.03 6.09 5.51 6.94 8.40 A. O. Smith Corp. 17.13 19.62

P/FCF 19.45 23.52 20.82 25.44 32.11 W.W. Grainger, Inc. 22.38 37.74

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REAL ESTATE - UNDERWEIGHT

Sector Overview

Residential Real Estate: The residential segment of the

industry focuses on the buying and selling of properties used

as homes or for non-professional purposes. This segment

heavily relies on housing prices within the market to determine

the health of the segment. Construction of new houses

changes the supply and demand for residential real estate.

Firms that manage rentable properties perform well when

renting is attractive, and supply of rentable units is high.

Industrial Real Estate: The industrial real estate segment

focuses on properties that are used for manufacturing and

production. Some examples are the factories and plants that

are involved in vertical supply chain systems to provide

consumer products to retailers or other manufacturing centers.

Consumer spending and supply chain operating costs affect

this industry the most.

Commercial Real Estate: Commercial real estate segment

consists of the properties that are used for business purposes

such as retail and office spaces. The segment tends to perform

cyclically in relation to the economy.

Real Estate Investment Trusts: REITs invest in a variety of

properties to achieve returns that can sustain the company

financially. For REITs, the company must distribute 90% of

their taxable income in dividends to their investors. Other

income is invested in the development or acquisition of

properties to ensure higher returns for stockholders. They also

can provide mortgages on various real assets.

The real estate sector made a large comeback

after the recession of 2008 because properties

gained some of their value back after the

economic downturn. After 2008, GDP increased

and, hence, consumers had more household

income. People slowly began to buy houses

instead of renting. In 2010 and 2011, the sector

saw a 27.1% and 32.3% increase, respectively.

Between 2017 and 2020, there has been minimal

increase due to the stage of the business cycle-the

late stage. Each segment within the industry has

different metrics that are used to gauge the health

of the industry. The segments that lie in the real

estate sector are residential real estate, industrial

real estate and commercial real estate. Real

estate investment trusts are another segment

which can encompass all types of properties.

During the late stages of the business cycle, real

estate performs at an average rate compared to

the S&P 500. It is important to note that the real

estate industry does not perform well when

interest rates rise. As the cost of borrowing for

consumers and real estate carriers increases, the

demand for mortgages and acquisitions may

decline. The industry becomes very defensive in

the late stages of the business. Real estate

investment trusts focus on repositioning and

strengthening their portfolio in these stages. The

real estate industry must maintain a workable

supply to feed demand for rentable units when

unattractive factors are involved, such as rising

interest rates. Development of new properties

continues in the late stages to ensure supply is

adequate and higher returns can be achieved.


Sector -2.27% 7.16% 7.05% S&P 500 18.40% 14.18% 15.22%

*Annualized Returns


American Tower Corp. (NYSE: AMT)

Market Cap:

$99.73B

Sector:

Real Estate

Industry:

Equity REIT

Stock Type:

Large Growth

Price (12/31/2020):

$224.46

52-Week Range:

$174.30 - $272.20

Holding Return:

119.99%

Business Summary

American Tower Corporation (AMT) is a real estate investment trust

founded in 1995 in Boston, Massachusetts. AMT invests in the global real

estate markets as well as being a large independent operator of wireless

and broadcast communication sites. American Tower owns and operates

more than 180,000 cell towers throughout the U.S., Asia, Latin America,

Europe, and the Middle East. Through its subsidiaries, AMT owns,

operates, and develops wireless and broadcast communications

properties. American Tower owns and operates more than 180,000 cell

towers throughout the U.S., Asia, Latin America, Europe, and the Middle

East. The company also leases antenna space on multi-tenant

communication sites to wireless service providers, radio, television

broadcast companies, government agencies, municipalities, and other

tenants in a number of industries.


▪ Concentrates investments in countries

that are in earlier stages of wireless

infrastructure. Invests in projects that

accrue in value as the infrastructure

develops.

▪ Has recurring revenue increases, high

operating leverage, predictable

operating costs, and minimal

nondiscretionary capital expenditures.

▪ Revenue is reliable due to strong credit

quality of tenants, low tenant turnover,

and growing wireless adoptions.

▪ Operating leverage is high due to the

availability for tenants to invest in new

towers within their current leases.

Key Statistics 2016 2017 2018 2019 2020

Total Stock Return % -5.60 11.43 24.25 47.85 -0.36

Return on Assets % 2.94 3.59 3.71 4.72 3.76

Return on Equity % 12.66 17.71 21.20 28.41 36.96


Total Asset Turnover .20 .21 .22 0.19 0.18

Financial Leverage 4.57 5.32 6.19 6.14 11..54


Revenue Growth % 21.25 15.18 11.65 6.67 6.08

Operating Income Growth % 14.90 7.85 -4.67 12.57 16.34

EPS Growth % 40.43 34.85 3.75 52.71 -10.61



2021 10.31 5.20

2022 7.41 7.20

Past 5 Years NA -1.60

Next 5 Years 14.50 7.00


Ratio 2016 2017 2018 2019 2020

P/E 52.9 48.9 44.30 56.37 53.06 Return % ROE % P/B 6.7 11.9 15.0 20.94 26.73 Healthpeak Properties -8.01 6.39

P/S 8.2 9.4 10.8 14.05 12.77 Howard Hughes Corp. -37.35 -0.76

P/FCF 17.3 29.1 21.5 32.15 26.75 Brookfield Property Partners -13.57 -8.78

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INFORMATION TECHNOLOGY - OVERWEIGHT

Sector Overview

IT Services: The IT services industry includes providers of

information technology and systems integration services not

classified in the data processing and outsourced services or

internet software and services industries. It includes information

technology consulting, information management services, and

providers of commercial electronic data processing and/or

business process outsourcing services such as back-office

automation.

Technology Hardware, Storage & Peripherals: This includes

manufacturers of cell phones, personal computers, servers,

electronic computer components and peripherals. These extend to

data storage components, motherboards, audio and video cards,

monitors, keyboards, printers, and other peripherals.

Semiconductors & Equipment: This includes manufacturers of

semiconductors and related products. Semiconductors and their

equipment are used in IT as the essential portions of most

electronic circuits and are commonly made from silicon, hence the

name Silicon Valley.

Software: The software industry includes applications, home

systems, and home entertainment software companies that

engage in developing and producing software designed for

specialized applications for the business and/or consumer

market.

Information technology has emerged over the last

two decades as a high growth innovative area in the

market. Relatively young, IT contains multiple

industries highlighted below which encompass the

various facets that play a role in the global sharing

of information. IT has become a vital piece of sector

allocation even for the S&P 500 Index, which many

funds and investors have traditionally sought to

mimic and compete. Looking back at the great

recession, IT was the fastest sector to recover,

posting extraordinary annual returns for the better

part of the last decade.

Communications Equipment: This industry is

comprised of producers of the equipment and

products in communications. These items are

known as local area networks, wide area network,

routers, switchboards, and telephones.

Internet Software & Services: The software and

services industry involve companies that develop

and market internet software and and/or provide

internet services. These services include web

address registration services, database

construction, internet design, online databases, and

interactive services.


Sector 43.57% 28.45% 26.72% S&P 500 18.40% 14.18% 15.22%

*Annualized Returns


Apple, Inc. (NASDAQ: AAPL)

Market Cap:

$2.232 T

Sector:

Information

Technology

Industry:

Consumer

Electronics

Stock Type:

Large

Core

Price (12/31/2020):

$132.69

52-Week Range:

$53.20 - $138.80

Holding Return:

1999.05%

Business Summary

Apple Inc. designs consumer electronic devices which consist of

smartphones (iPhone), computers (Mac), tablets (iPad), smartwatches

(Apple Watch), and streaming technology (Apple TV). Apple has also

continued to develop their services to contribute to the diversification of

revenue source. Big part of the company’s revenue it is because of its

fast-growing services business. Some of them are iCloud services, Siri

which was acquired in 2010, the streaming services such as Apple Music

and Apple TV+, Apple Care and Apple Pay. Apple integrates devices with

software and services to provide one of the strongest brand ecosystems

in the world. The company generates roughly 40% of its revenue from the

Americas, with the remainder earned internationally between Europe,

Greater China, Japan, and Rest of Asia Pacific. Apple has been recognized

as a leading pioneer in the Information Technology sector that shapes

consumer interaction with the latest technological advancements.


▪ Apple has strong brand loyalty

focused around the “Apple

Ecosystem”, which makes entry easy

and exit difficult. This provides

sharper stability in generating cash

flows.

▪ Market saturation for Apple’s

products have been seen recently

with the rapid influx of other

products in the market.

▪ Economic and political turmoil has

become a threat to negatively affect

Apple’s supply chains, and likewise,

their overall revenue stream.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 14.93 13.87 16.07 15.69 17.33

Return on Equity % 36.09 36.87 49.36 55.92 73.69





Revenue Growth % -7.73 6.30 15.86 -2.04 5.51


EPS Growth % -9.96 10.58 29.57 -0.34 10.44



2021 36.59 40.60

2022 5.13 4.50

Past 5 Years 10.30 2.60

Next 5 Years 11.00 17.70


Ratio 2016 2017 2018 2019 2020

P/E 13.9 18.4 13.2 24.70 40.45 Return % ROE %

P/B 4.75 6.42 6.96 14.23 34.16 Microsoft Corp. 42.37 40.14

P/S 2.95 3.88 2.97 5.25 8.47 Alphabet Inc. 30.85 19.00

P/FCF 9.7 14.0 10.2 19.67 28.83 HP Inc. - 23.17

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Accenture PLC Class A (NYSE: ACN)

Market Cap:

$176.695B

Sector:

Information

Technology

Industry:

IT Services

Stock Type:

Large

Core

Price (12/31/2020):

$261.21

52-Week Range:

$143.69 - $266.25

Holding Return:

228.40%

Business Summary

Accenture PLC is one of the world’s leading professional services

companies providing services such as management consulting,

technology services, and outsourcing. Accenture operates in North

America, Europe, and Emerging Markets totaling over 120 countries.

Accenture conducts their business with over 80% of Global Fortune 500

companies. This advanced network of insight provides a competitive

advantage in Accenture’s business structure. Though the company’s

business operations and structure classify the company as an

information technology firm, they provide insights and solutions for firms

across all GICS sectors from financials to healthcare. Accenture’s main

practice is to develop industry-specific solutions to enhance and ensure

the efficiency of business practices to produce better results.


▪ Accenture works with primarily

Fortune 500 companies that depend

on Accenture’s services, providing

stable revenue streams for future

years.

▪ Accenture’s dominate market share,

the nature of its services, and the

extensive industry knowledge

needed generates high switching

costs for their competitors.

▪ Outsourcing services, a segment

where ACN is the leader, are

estimated to continue to increase in

future years and is an essential

factor to the company’s outlook on

future revenue growth.

▪ Accenture has proven to deliver on

their clientele’s needs as 97% of

their top revenue generating clients

have been with the company for 10+

years. That figure jumps to 99% for

the past 5 years.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 21.2 15.9 17.2 17.62 15.28

Return on Equity % 60.1 41.8 42.0 38.58 32.53





Revenue Growth % 5.72 5.66 13.16 3.87 2.57


EPS Growth % 35.50 -15.66 16.54 16.09 7.20



2021 13.67 5.20

2022 10.26 14.10


Next 5 Years 10.00 13.70


Ratio 2016 2017 2018 2019 2020

P/E 17.4 27.1 21.6 28.11 32.17 Return % ROE %

P/B 10.2 10.7 7.4 8.82 9.64 IBM Corp -1.23 26.98

P/S 2.2 2.7 2.2 3.11 3.78 Cognizant Tech. Solutions 33.55 12.74

P/FCF 15.6 20.6 15.2 21.42 18.72 Capgemini SE 28.27 13.18

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Microsoft Corp. (NASDAQ: MSFT)

Market Cap:

$1.791T

Sector:

Information

Technology

Industry:

Software

Stock Type:

Large

Growth

Price (12/31/2020):

$222.42

52-Week Range:

$132.50 - $232.90

Holding Return:

773.61%

Business Summary

Microsoft develops and licenses consumer and enterprise software such

as the Microsoft Office Suite and Windows software. The company

operates within three segments, which are productivity and business

processes (Microsoft Office, Cloud-based Office 365, Exchange,

Sharepoint, Skype, LinkedIn, Dynamics), intelligence cloud infrastructure

and platform as a service offering (Azure, Windows Server OS, SQL

Server) and more personal computing (Windows Client, Xbox, Bing search,

display advertising, Surface laptops/tablets/desktops). Microsoft’s

revenues are split by product and service/other with products accounting

for about 60% of their total revenue. Microsoft has been transitioning

their focus to cloud-based computing which both individuals and

institutions have increased demand for.


▪ Services and subscriptions continue

to increase year over year, which

provides re-occurring sales and

strengthens the stability of the

business structure.

▪ Microsoft's Horizontal Diversification

Strategy gives them a potential first-

mover advantage in leveraging on

new growth trends and exposes

them to less political risk, which can

lead to revenue stability.

▪ Microsoft’s Azure cloud computing

service will replace the Office

productivity software as the

company’s largest source of revenue

by 2023.

▪ Poor performing business segments

have the potential to offset revenue

growth and development for

Microsoft’s strong performing

business segments in the future.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 11.2 11.5 6.5 14.39 15.07

Return on Equity % 27.0 31.9 19.5 42.21 40.14





Revenue Growth % -8.83 5.43 22.69 14.03 13.65


EPS Growth % 41.89 29.05 -21.40 137.56 13.83



2021 27.95 1.70

2022 9.36 16.10

Past 5 Years 16.20 9.50

Next 5 Years 11.90 14.20


Ratio 2016 2017 2018 2019 2020 P/E 29.8 30.2 41.8 29.75 35.87 Return % ROE % P/B 6.8 7.4 9.1 11.32 13.60 Amazon.com Inc 76.26 27.44

P/S 5.8 7.2 6.9 9.40 11.59 Alphabet Inc 30.85 19.00

P/FCF 13.7 16.6 17.5 23.31 25.76 Apple Inc 81.85 73.69

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https://www.cnbc.com/quotes/MSFT


NVIDIA Corporation (NASDAQ: NVDA)

Market Cap:

$323.242B

Sector:

Information

Technology

Industry:

Semiconductors

& Equipment

Stock Type:

Large

Growth

Price (12/31/2020):

$522.20

52-Week Range:

$180.70 - $589.10

Holding Return:

174.46%

Business Summary

Nvidia is the leading designer of graphics processing units that enhance

the experience on computing platforms. The firm's chips are used in a

variety of end markets, including high-end PCs for gaming, data centers,

and automotive infotainment systems. In recent years, the firm has

broadened its focus from traditional PC graphics applications such as

gaming to more complex and favorable opportunities, including artificial

intelligence and autonomous driving, which leverage the high-

performance capabilities of the firm's graphics processing units. The

graphics cards and units are also widely desired and used by “miners” in

regard to cryptocurrencies like Bitcoin, Ethereum and Litecoin. NVIDIA

has been said to have technology that is years ahead of its competitors.


▪ High market share in cloud and

processing technologies will deliver

strong revenue sources for NVIDIA

for years to come.

▪ NVIDIA claims that automotive and

gaming devices are expected to

become their biggest growth drivers

in the future.

▪ The global chip shortage is expected

to continue to affect NVIDIA until

2022 which will result in supply

shortages.

▪ Economic turmoil in countries such

as China, which account for roughly

to 50% of NVIDIAs’ sales, prove to be

a leading risk factor for future

performance and revenue growth.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 8.43 19.36 28.91 33.76 18.27

Return on Equity % 13.82 32.57 46.05 49.26 25.95





Revenue Growth % 37.92 40.58 20.61 -6.81 52.73

Operating Income Growth % 120.62 65.72 18.50 -25.18 59.24

EPS Growth % 137.96 87.55 37.55 -31.38 52.65



2021 33.70 27.10

2022 12.12 17.50

Past 5 Years 37.70 26.30

Next 5 Years 12.60 8.60


Ratio 2016 2017 2018 2019 2020 P/E 54.74 48.01 17.85 60.18 85.33 Return % ROE% P/B 10.81 18.46 8.59 12.84 21.08 Advanced Micro Devices 99.98 57.48

P/S 10.85 13.94 6.74 14.52 22.08 Intel Corp 26.36 -14.55

P/FCF 45.54 43.68 19.91 34.69 62.50 Xilinx Inc 46.55 30.63

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MATERIALS - OVERWEIGHT

Sector Overview

Containers and Packaging: This industry is comprised of

companies which manufacture metal, glass, plastic, paper, and

cardboard containers. The containers and packaging industry

relies heavily on food and beverage, pharmaceutical, and

household items industries to drive sales.

Metals and Mining: The metals and mining industry includes

producers of mining related products as well as companies

specializing in the extraction of base and precious metals.

Paper and Forest Products: Companies that are included in the

paper and forest products Industry are manufactures of timber

and related wood products as well as producers of all grades of

paper. Some companies specializing in paper packaging are

excluded.

As the United States economy moves along the late

stage of the business cycle, the materials sector

thrives. Historically, the materials sector

outperforms the S&P 500 Index due to the increase

in prices of raw materials during this time. The

materials sector has a market cap of $1.81 Trillion

and includes the following industries: chemicals,

construction materials, containers and packaging,

metals and mining, and paper and forest products.

Chemicals: The chemicals industry encompasses

the producers of commodity, fertilizers, diversified,

agricultural, and specialty chemicals. Industrial

gases manufacturers are also included in the

chemicals industry.

Construction Materials: The construction materials

Industry includes companies involved with the

procurement of raw materials used in construction.

These materials include clay, cement, concrete,

bricks, and sand. The construction materials

industry is expected to experience growth into 2020

due to the expansion in both domestic and foreign

construction industry, driving demand for

construction materials.


Sector 20.34% 8.39% 12.99% S&P 500 18.40% 14.18% 15.22%

*Annualized Returns


Franco Nevada Corp. (NYSE: FNV)

Market Cap:

$23.90B

Sector:

Materials

Industry:

Gold

Stock Type:

Large

Growth

Price (12/31/2020):

$125.33

52-Week Range:

$77.20 - $166.10

Holding Return:

79.00%

Business Summary

Franco-Nevada Corp is focused on precious metals royalties and

investments. FNV owns a portfolio of royalty streams and precious metals

that they actively manage to generate revenue. The majority of its

revenue comes from gold, silver, and platinum. FNV helps illiquid mining

companies fund exploration and production projects and takes a claim

(royalty) of an agreed upon amount of metal once ore has been mined.

The success, or failure, of royalty companies is based upon the success

of the projects they fund and the market price of the various

commodities.


▪ Historically, with a maturing business

cycle, commodity prices strengthen.

This presents an opportunity for FNV

to fund more projects and generate

more return on their portfolio of

metal in the short-term. In the long-

term, FNV will be affected by the

availability of development capital.

▪ One key risk associated with royalty

companies is the decline of

production. Since 2000, the amount

of gold ore produced has been

steadily declining, leading to supply

constraints. While this may drive up

the price, if less mines are being

built, FNV and its peers could be in

serious financial distress.

▪ The ROA and ROE figures being so

similar signifies that Franco-Nevada

Corp is not taking on much debt. This

prudent capital structure leads to

increased Current and Quick Ratios,

showing that the firm can remain

liquid in a financial emergency.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 3.10 4.32 2.86 6.74 6.00

Return on Equity % 3.34 4.40 2.98 7.10 6.21





Revenue Growth % 37.56 10.62 -3.23 29.23 20.86


EPS Growth % 331.25 53.62 -29.25 144.00 -6.56



2021 17.34 17.00

2022 4.09 9.10

Past 5 Years 26.90 28.30

Next 5 Years 4.00 10.20


Ratio 2016 2017 2018 2019 2020

P/E 114.90 100.00 61.70 97.10 90.1 Return % ROE %

P/B 2.50 3.20 2.80 4.00 4.60 Alamos Gold Inc. 46.43 5.20

P/S 17.80 21.80 19.50 26.40 24.40 B2Gold Corp. 18.45 13.43

P/FCF 27.50 29.90 26.10 36.50 32.10 Barrick Gold Corp. 24.21 10.38

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Martin Marietta Materials, Inc. (NYSE: MLM)

Market Cap:

$17.69B

Sector:

Industrials

Industry:

Building

Materials

Stock Type:

Mid Core

Price (12/31/2020):

$283.97

52-Week Range:

$135.10 - $287.20

Holding Return:

34.00%

Business Summary

Martin Marietta Materials Inc. is one of the largest producers of

construction aggregates in the United States. Martin Marietta is a natural

resource-based building materials company. The company has a network

of over 300 quarries in 31 states, Canada, and the Bahamas. Martin

Marietta also provides ready mixed concrete, asphalt and paving

services. The company’s building materials are utilized in infrastructure,

nonresidential, and residential construction. The company also operates

a Magnesia Specialties business with production facilities in Michigan

and Ohio. The company was formed in 1993 as a North Carolina

corporation, and since then has completed over 90 smaller acquisitions.


▪ The company’s geographic footprint

is heavy in states that have a high

need and the financial capability for

an increase in road work. This

illustrates the potential for strong

and continued growth into the future.

▪ The company boasts a healthy

balance sheet that allows it to

consider large acquisitions. As

mentioned in the business summary,

it has over 90 successful

acquisitions, allowing the company

to grow in different markets, while

eliminating competitors.

▪ The company’s earnings depend on

volatile outside factors like economic

performance, government budgets,

and lending availability. If the

economic market takes a downturn,

this can be harmful to the growth in

the company and stock.

Key Statistics 2016 2017 2018 2019 2020

Total Stock Return % 63.40 0.56 --21.41 63.90 2.35

Return on Assets % 5.94 8.73 5.06 6.21 6.96

Return on Equity % 10.34 16.13 9.75 11.87 12.82





Revenue Growth % 7.89 3.85 7.03 11.66 -0.19


EPS Growth % 54.55 69.68 -33.96 31.09 18.48



2021 -2.08 14.70

2022 13.72 21.70

Past 5 Years 18.20 8.70

Next 5 Years 9.00 22.40


Ratio 2016 2017 2018 2019 2020

P/E 35.0 32.30 14.50 30.6 26.5 Return % ROE %

P/B 3.40 3.20 2.20 3.30 3.10 Summit Materials Inc -15.98 9.12

P/S 3.80 3.50 2.60 3.80 3.80 Eagle Materials Inc 11.90 6.51

P/FCF 21.40 20.70 15.90 19.20 17.70 Vulcan Materials Co 3.94 10.03

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UTILITIES - OVERWEIGHT

Sector Overview

Independent Power and Renewable Electricity Producers: This

industry includes companies that engage in the production and

distribution of renewable energy sources. Some examples of

renewable energy are biomass fuel, geothermal energy, solar

energy, hydropower, and wind power. This Industry also includes

companies that are Independent power producers, gas and

power marketing and trading specialists, or integrated energy

merchants.

Multi-Utilities: The multi-utilities or diversified utilities industry is

made up of companies who have business in more than one

specific utilities industry. Companies who can provide a

combination of electric, gas, or water utilities maintain

noticeable stability.

Water Utilities: The water utilities industry includes companies

who engage in the purchase and redistribution of water to

residential, commercial and industrial consumers. Companies in

this industry could also partake in water treatment. The water

utilities industry is strictly regulated by the Food and Drug

Administration to ensure the safety of drinking water. Stocks in

this Industry generally perform well in an economic downturn, or

in the summer, when demand for water is at its highest.

The Utility sector has a market cap of $1.46 Trillion

and is comprised of companies that provide utilities

like electricity, gas, or water. As investors begin to

take a more conservative outlook on the market,

Utilities is one of the most trusted and consistent

performers. While other sectors are distressed by

the volatility close to the end of an expansion,

Utilities appear to thrive.

Electric Utilities: The Electric Utilities Industry

includes companies that engage primarily in

providing electricity to individuals or companies.

This industry alone has a market cap of about $821

billion. Stocks in the electric utility Industry generally

offer high dividend yields and low volatility.

Distribution of electricity is regulated by state

commissions and transmission is overseen by the

states or the Federal Energy Regulatory

Commission. As environmental concerns have risen,

companies have been expected and regulated to

produce electricity with less of an environmental

impact.

Gas Utilities: The gas utilities industry includes

companies whose primary business is to distribute

and transmit natural gas to residential, commercial

and industrial customers. Demand and production

of natural gas has increased tremendously in recent

years due to its versatility. Natural gas is used for

electricity production, industrial uses (e.g.

petrochemical manufacturing), and heating and

cooking in homes. Natural gas is also the cleanest

burning fossil fuel, producing 20% less carbon

dioxide than oil.


Sector 0.35% 9.59% 11.33% S&P 500 18.40% 14.18% 15.22%

*Annualized Returns


Dominion Energy, Inc. (NYSE: D)

Market Cap:

$60.61B

Sector:

Utilities

Industry:

Multi-Utilities

Stock Type:

Large

Value

Price (12/31/2020):

$75.20

52-Week Range:

$57.80 - $90.90

Holding Return:

12.91%

Business Summary

Dominion Energy Inc. was founded in 1909 and is headquartered in

Richmond, Virginia. Dominion operates in 3 segments: Power Generation,

Gas Infrastructure and Southeast Energy. The company has 26,000

megawatts of generating capacity with 6,700 miles of electric

transmission lines and 58,300 miles of electric distribution lines. In

addition, Dominion has 14,800 miles of natural gas transmission with

52,300 miles of natural gas distribution pipelines. Dominion completed a

liquefied natural gas export facility in Maryland and is now beginning a 2

GW wind farm 27 miles off the Virginia Beach coast. The wind farm would

be the largest in the U.S. It serves over 5 million utility and retail

customers, as well as sells electricity to wholesale markets.


▪ Dominion Energy has significant

infrastructure in several states and is

currently expanding with the Atlantic

Coast Pipeline. The new pipeline is

expected to increase revenue.

▪ Dominion’s stock offers a dividend

yield of 5.07% along with a history of

consistent dividend growth.

▪ Dominion has established a wide

economic moat through efficient

scale and conservative strategies.

This secures future revenue growth

and discourages competitors.

▪ Regulation of the natural gas industry

is the primary concern for Dominion,

however, they have signed long term

contracts and supported constructive

regulation to ensure steady growth.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 3.26 4.05 3.17 1.48 -0.40

Return on Equity % 15.57 18.89 13.14 5.39 -1.50





Revenue Growth % -.46 7.23 6.20 23.99 -14.48


EPS Growth % 7.50 37.21 -20.76 56.68 -135.19



2021 8.76 3.30

2022 6.49 6.30

Past 5 Years -0.10 2.90



Ratio 2016 2017 2018 2019 2020

P/E 23.10 24.00 14.80 60.90 28.2 Return % ROE %

P/B 3.20 3.20 2.60 2.51 2.5 Exelon Corp -4.04 6.06

P/S 4.20 4.10 3.50 4.11 3.8 Sempra Energy -13.13 19.84

P/FCF 10.60 11.60 10.10 13.32 10.0 National Grid PLC -0.80 7.89

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Public Service Enterprise Group, Inc. (NYSE: PEG)

Market Cap:

$29.38B

Sector:

Utilities

Industry:

Multi-Utilities

Stock Type:

Mid

Value

Price (12/31/2020):

$58.30

52-Week Range:

$34.80 - $62.20

Holding Return:

76.59%

Business Summary

Public Service Enterprise Group Incorporated was incorporated in 1985

and is based in Newark, New Jersey. Through its subsidiaries, the firm

operates as an energy company primarily in the Northeastern and Mid-

Atlantic regions in the United States. It operates through two segments,

PSE&G and PSEG Power. The PSE&G segment transmits electricity;

distributes electricity and gas to residential, commercial, and industrial

customers, as well as invests in solar generation projects, and energy

efficiency and related programs; and offers appliance services and

repairs. PEG has electric transmission and distribution system of 25,000

circuit miles and 858,000 poles. The Power segment operates nuclear,

coal, gas, oil-fired, solar, and renewable generation facilities.


▪ Government regulations pose a risk

to PEG due to possible cost

increases or requiring new

equipment. Increases in these costs

could have a large impact on their

net income and an investors

valuation of PEG’s stock.

▪ Regulation could be a growth

opportunity for PEG through clean

energy projects, like residential solar

installation. PEG is already ahead of

competition in clean energy,

investing in solar energy since 2009.

Clean energy is a growing portion of

PEG’s revenue.

▪ Volatile power and gas market prices

in New Jersey and Long Island can

have a tremendous impact on PEG’s

revenue.

▪ Innovation, customer service and

infrastructure provide PEG with a

substantial competitive advantage in

the Northeast and Mid-Atlantic

Regions. The limited number of

competitors in their geographical

area makes their stock very

dependable.

Key Statistics 2016 2017 2018 2019 2020


Return on Assets % 2.29 3.80 3.27 3.64 3.90

Return on Equity % 6.77 11.67 10.19 11.49 12.26





Revenue Growth % -13.00 0.25 6.74 3.92 -4.69

Operating Income Growth % -47.17 77.45 -8.64 2.05 -8.44

EPS Growth % -46.97 77.14 -8.71 17.67 12.91



2021 -0.87 3.30

2022 1.47 6.30




Ratio 2016 2017 2018 2019 2020

P/E 17.30 50.00 12.00 20.65 15.46 Return % ROE %

P/B 1.60 2.00 1.80 1.99 1.86 National Grid PLC -0.80 7.89

P/S 2.40 2.90 2.80 2.97 3.05 Exelon Corp -4.04 6.06

P/FCF 6.50 8.00 8.70 9.57 9.27 Entergy Corp -13.54 13.13

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Brookfield Renewable Partners LP (NYSE: BEP)

Market Cap:

$11.84B

Sector:

Utilities

Industry:

Utilities-

Renewable

Stock Type:

Mid

Value

Price (12/31/2020):

$43.15

52-Week Range:

$16.38 - $43.15

Holding Return:

20.44%

Business Summary

BEP is a power generating company that operates in renewables. The

company’s operations span across four continents including North

America, South America, Europe, and Asia. The company consists of

approximately 19,300 MW of power generation. Its assets consist of

generation in hydroelectric, wind, solar, storage, and distributed

generation. BEP has been a strong performer in the utilities sector as the

environmental, social, and corporate governance (ESG) practices have

been increasing in order to support decarbonization. BEP is ahead of

other companies within the industry for the plan for carbon neutrality. It

already annually saves the carbon emissions equivalent of 6 million

vehicles on the road. In 2019, they doubled the size of their business in

Asia by investing over $2 billion. This increased investment pairs well with

China’s plan to be carbon neutral by 2060.


▪ BEP has been achieving its goal of

reducing carbon emissions and has

been doing so through agreements

and acquisitions to help strengthen

its global profile.

▪ BEP has outperformed the S&P 500

Index, which abides to the IMP

classes goal. BEP also outperforms

the renewables industry which is

the best performing industry within

the utilities sector.

▪ BEP is exposed to several risks,

both internal and external to the

company. These risks provide

uncertainty to the valuations

provided in the DCF model.

Because of these risks, the future

results could be negatively

impacted if one of these were to

occur.

Key Statistics 2016 2017 2018 2019 2020

Total Stock Return % 27.60 - 34.49 - 73.49

Return on Assets % -0.15 -0.11 0.07 -0.10 -0.43

Return on Equity % -1.07 -0.78 0.50 -0.64 -3.58

Net Profit Margin % -1.47 -1.22 0.80 -1.14 -4.83




Revenue Growth % 50.61 7.06 13.60 -0.07 27.85


EPS Growth % - -14.29 -175.00 -244.44 369.23



2021 -73.77 3.30

2022 -25.00 6.30

Past 5 Years -263.60 2.90

Next 5 Years NA 7.60


Ratio 2016 2017 2018 2019 2020

P/E - - - 149.53 - Return % ROE %

P/B 1.31 1.52 1.11 1.69 2.82 Atlantica Sustainable 50.21 0.79

P/S 2.18 2,48 1.63 2.75 4.19 Meridian Energy Ltd 55.23 4.10

P/FCF 8.75 7.46 4.68 6.46 12.83 Algonquin Power & Utilities 20.61 17.77

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Vanguard High Dividend Yield ETF (NYSE: VYM)

Sector:

Large Cap

Value

Expense:

0.06%

P/E:

20.2

P/B:

2.3

ROE:

17.7%

Price (12/31/2020):

$91.51

52-Week Range:

$61.10 - $94.80

Holding Return:

48.80%

Overview

Vanguard High Dividend Yield ETF seeks to track the

performance of a benchmark index that measures the

investment return of common stocks of companies that

are characterized by high dividend yields. The fund’s

investment approach is to track the performance of the

FTSE High Dividend Yield Index. They are passively

managed, have large-cap equity with an emphasis on

stocks that are forecasted to have above average dividend

yields, and have low expenses to minimize net tracking

error.


▪ The fund is an excellent choice for exposure to

stocks with higher than average dividend yields

without taking outsize risk.

▪ The fund’s broadly diversified portfolio and its low

fee provide a persistent edge over its large-cap

value peers.

▪ The ETF effectively diversifies the risk of solely

focusing on yield by screening holdings based on

dividend yield weighted by market cap.

▪ The ETF stable income and provides a cushion to

stay invested during turbulent markets; however,

high-yielding stocks can be dangerous because the

companies can be under distress and cut dividends.

Sector Allocation (%) Consumer Discretionary 6.0

Consumer Staples 13.6

Energy 5.9

Financials 20.8

Health Care 13.7

Industrials 10.1

Real Estate 0.0

Information Technology 9.0

Materials 3.9

Communication Services 8.1

Utilities 8.9

Top 5 Holdings (%) Performance

Johnson & Johnson 3.7

JPMorgan Chase & Co. 3.5 VYM S&P 500

Procter & Gamble Co 3.0 1-Year Return % 1.14 18.40

Verizon Communications Inc. 2.2 3-Year Return % 5.74 14.18

Comcast Corp. 2.1 5-Year Return % 7.42 15.22

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iShares Core U.S. Aggregate Bond Index ETF (NYSE: AGG)

Sector:

US Fund

Intermediate

Core Bond

Expense:

0.04%

Maturity:

8.10 years

Duration:

6.37 years

Credit

Rating:

A

Price (12/31/2020):

$112.37

52-Week Range:

$106.57 - $119.63

Holding Return:

-0.35%

Overview

The iShares Core U.S. Aggregate Bond ETF (AGG) seeks to

track the performance of the overall U.S. investment-grade

bond market. More specifically, AGG attempts to emulate

the investment results of the Bloomberg Barclay’s U.S.

Aggregate Bond Index. AGG has 8,327 holdings, all of

which are rated BBB or higher, with at least 80% of these

holdings being the exact same securities that are within

the underlying index. The fund’s weighted average

maturity is 7.97 years, making it an intermediate-term

bond fund, and has an effective duration of 6.02.

Sector Allocation (%) Treasury/Agency 37.82

Mortgage-Backed Pass-Through 26.17

Industrial 17.05

Financials 8.25

Utilities 2.23


▪ Tracks the same fixed income benchmark as the

IMP portfolio, putting the IMP portfolio in a better

position to beat our overall benchmark.

• Offers broad exposure to U.S. investment-grade

bonds.

• Low-cost ETF that can diversify the portfolio and

provide stability and income.

Credit Rating Breakdown (%) AAA Rated 69.41

AA Rated 2.86

A Rated 12.01

BBB Rated 15.37

Cash/Derivatives 0.33

Maturity Breakdown (%)

0-5 Years 60.68

5-10 Years 18.87

10+ Years 20.14

Performance AGG U.S. Agg.

1-Year Return % 0.70 0.71



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iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT)

Sector:

US Fund

Intermediate

Core Bond

Expense:

0.15%

Maturity:

26.18 years

Duration:

18.45 years

Credit

Rating:

AAA

Current Price:

$157.73

52-Week Range:

$136.74 - $171.57

Holding Return:

-5.7%

Overview

The iShares 20+ Year Treasury Bond ETF seeks to track

the investment results of an index composed of U.S.

iShares Treasury bond ETFs help you customize your

portfolio by offering funds with a variety of U.S. Treasury

bond maturity buckets. iShares U.S. Treasury bond ETFs

offer exposure to Treasury bonds that mature within

specific maturity years or ranges, allowing you to target

points on the yield curve.

Sector Allocation (%) Treasury 100.00

Mortgage Backed Securities (MBS) 0.0

Industrial 0.0

Finance 0.0

Utility 0.0

Commercial MBS 0.0


▪ Expect long-term bonds to outperform short-term

bonds in 2020. Gross Domestic Product (GDP)

increased by 2.1% in 2019. Even though interest

rates are currently low, these strong growth

numbers make it less likely for the Federal Reserve

to raise rates.

▪ TLT is a high-quality ETF, thanks to a low expense

ratio and liquidity.

▪ Creates a stable stream of income for the portfolio.

Credit Rating Breakdown (%) AAA Rated 100.0

AA Rated 0.0

A Rated 0.0

BBB Rated 0.0

Maturity Breakdown (%) 0-5 Years 0.0

5-10 Years 0.0

10+ Years 100.0

Performance

TLT U.S. Agg.

1-Year Return % -17.13 0.71



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Vanguard Total Bond Market Fund (NYSE: BND)

Sector:

US Fund

Intermediate

Core Bond

Expense:

0.035%

Maturity:

6.6 years

Duration:

8.5 years

Credit Rating:

AA

Current Price:

$88.19

52-Week Range:

$83.86 - $88.19

Holding Return:

4.9%

Overview

The Vanguard Total Bond Market Fund (BND) seeks to

track the performance of the Bloomberg Barclay’s U.S.

Aggregate Float Adjusted Index. BND holds over 10,000

bonds with an average coupon of 3.2% and average

duration of 6.6 years. BND focuses on U.S. investment-

grade bonds with maturity dates less than 10 years, with

an even bigger focus on bonds that will mature in less

than 5 years.


▪ Low volatility helps reduce risk while maintaining

relatively high potential for investment income.

▪ Tracks a similar index compared to the IMP fixed

income benchmark, offering greater potential to

beat our benchmark.

• With over half of the fund’s bonds having been

issued by the U.S. Government, the risk of default is

relatively low.

Sector Allocation (%) Asset-Backed 0.4

Commercial Mortgage-Backed 2.3

Finance 8.9

Foreign 3.1

Government Mortgage-Backed 21.0

Industrial 17.9

Treasury/Agency 43.2

Utilities 2.3

Other 0.9

Credit Rating Breakdown (%) U.S. Government 63.4

AAA Rated 5.0

AA Rated 3.2

A Rated 12.6

BBB Rated 15.8


5-10 Years 20.90

10+ Years 40.46

Performance

BND U.S. Agg.




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SPDR Portfolio Aggregate Bond ETF (NYSE: SPAB)

Sector:

US Fund

Intermediate

Core Bond

Expense:

0.04%

Maturity:

8.14 years

Duration:

6.35 years

Credit

Rating:

AA

Current Price:

$30.79

52-Week Range:

$29,38 - $30.79

Holding Return:

4.2%

Overview

The SPDR Portfolio Aggregate Bond ETF (SPAB) seeks to

provide investment results that correspond to the price

and yield of the Bloomberg Barclay’s U.S. Aggregate Bond

Index. The fund has over 6,000 holdings with an average

maturity of 8.16 years and an average coupon of 2.66%.

Sector Allocation (%) Treasury 37.02

Mortgage Backed Securities (MBS) 25.71

Industrial 16.76

Finance 8.28

Utility 2.41

Commercial MBS 2.14


▪ Out of the IMP’s three fixed income ETFs, SPAB

manages to track the Bloomberg Barclay’s U.S.

Aggregate Bond Index the most efficiently.

▪ One of the lowest cost fixed income ETFs on the

market, making it a cheap option to diversify the

portfolio.

▪ Creates a stable stream of income for the portfolio.

Credit Rating Breakdown (%)

AAA Rated 69.73

AA Rated 3.38

A Rated 11.73

BBB Rated 15.13


5-10 Years 27.77

10+ Years 18.73

Performance

SPAB U.S. Agg.




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YTD Holding

Security Ticker Shares Price Value Weight Shares Price Value Weight Return Return

Equity:

1 3M MMM 25 176.42$ 4,410.50$ 1.96% 25 174.79$ 4,369.75$ 1.65% -0.9% 124.3%

2 Accenture PLC Class A ACN 40 210.57$ 8,422.80$ 3.74% 40 261.21$ 10,448.40$ 3.94% 24.0% 228.4%

3 Amazon.com Inc AMZN 8 1,847.84$ 14,782.72$ 6.56% 8 3,256.93$ 26,055.44$ 9.83% 76.3% 438.8%

4 American Tower Corp. AMT 20 229.82$ 4,596.40$ 2.04% 20 224.46$ 4,489.20$ 1.69% -2.3% 120.0%

5 Amgen Inc. AMGN 21 241.07$ 5,062.47$ 2.25% 21 229.92$ 4,828.32$ 1.82% -4.6% 42.3%

6 Apple Inc. AAPL 42 293.65$ 12,333.30$ 5.47% 168 132.69$ 22,291.92$ 8.41% 80.7% 1999.1%

7 AT&T Inc. T 100 39.08$ 3,908.00$ 1.73% 100 28.76$ 2,876.00$ 1.09% -26.4% -15.7%

8 Bank of America BAC 148 35.22$ 5,212.56$ 2.31% 148 30.31$ 4,485.88$ 1.69% -13.9% 48.5%

9 Brookfield Renewable Partners BEP 30 43.15$ 1,294.50$ 0.49% 20.4%

10 Bristol-Myers Squibb Co. BMY 16 64.19$ 1,027.04$ 0.46% 30 62.03$ 1,860.90$ 0.70% -3.4% 11.1%

11 Capital One Financial Corp. COF 50 102.91$ 5,145.50$ 2.28% 50 98.85$ 4,942.50$ 1.86% -3.9% 4.9%

12 Cerner Corp. CERN 50 73.39$ 3,669.50$ 1.63% 50 78.48$ 3,924.00$ 1.48% 6.9% 34.8%

13 Cheniere Energy LNG 40 61.07$ 2,442.80$ 1.08% 20 60.03$ 1,200.60$ 0.45% -1.7% -6.2%

14 Coca-Cola Co. KO 70 55.35$ 3,874.50$ 1.72% 70 54.84$ 3,838.80$ 1.45% -0.9% 106.0%

15 Dominion Energy, Inc. D 30 82.82$ 2,484.60$ 1.10% 30 75.20$ 2,256.00$ 0.85% -9.2% 12.9%

16 Domino's Pizza Inc DPZ 6 383.46$ 2,300.76$ 0.87% -2.4%

17 Facebook FB 17 205.25$ 3,489.25$ 1.55% 17 273.16$ 4,643.72$ 1.75% 33.1% 83.9%

18 Franco Nevada Co. FNV 57 103.30$ 5,888.10$ 2.61% 57 125.33$ 7,143.81$ 2.70% 21.3% 79.0%

19 Honeywell International, Inc. HON 20 177.00$ 3,540.00$ 1.57% 20 212.70$ 4,254.00$ 1.60% 20.2% 17.1%

20 Horizon Technology Finance Corporation HRZN 200 13.24$ 2,648.00$ 1.00% 5.9%

21 Johnson & Johnson JNJ 15 145.87$ 2,188.05$ 0.97% 25 157.38$ 3,934.50$ 1.48% 7.9% 85.7%

22 Lockheed Martin Co. LMT 9 389.38$ 3,504.42$ 1.56% 9 354.98$ 3,194.82$ 1.21% -8.8% 30.7%

23 Martin Marietta Materials Inc. MLM 7 279.64$ 1,957.48$ 0.87% 7 283.97$ 1,987.79$ 0.75% 1.5% 34.0%

24 Microsoft Corp. MSFT 75 157.70$ 11,827.50$ 5.25% 75 222.42$ 16,681.50$ 6.29% 41.0% 773.6%

25 NVIDIA Corporation NVDA 25 235.30$ 5,882.50$ 2.61% 25 522.20$ 13,055.00$ 4.93% 121.9% 174.5%

26 PENN National Gaming PENN 50 86.37$ 4,318.50$ 1.63% 134.4%

27 Procter & Gamble Co. PG 60 124.90$ 7,494.00$ 3.33% 60 139.14$ 8,348.40$ 3.15% 11.4% 173.1%

28 Public Service Enterprise Group Inc. PEG 60 59.05$ 3,543.00$ 1.57% 60 58.30$ 3,498.00$ 1.32% -1.3% 76.6%

29 Roper Technology Inc. ROP 6 431.09$ 2,586.54$ 0.98% 9.6%

30 The TJX Companies, Inc. TJX 43 61.06$ 2,625.58$ 1.17% 43 68.29$ 2,936.47$ 1.11% 11.8% 25.2%

31 TC Enery Corporation TRP 94 53.31$ 5,011.14$ 2.22% 94 40.72$ 3,827.68$ 1.44% -23.6% -4.9%

32 The Hershey Co. HSY 20 146.98$ 2,939.60$ 1.30% 20 152.33$ 3,046.60$ 1.15% 3.6% 4.0%

33 The Walt Disney Company DIS 45 144.63$ 6,508.35$ 2.89% 60 181.18$ 10,870.80$ 4.10% 25.3% 51.1%

34 UnitedHealth Group Inc. UNH 40 293.98$ 11,759.20$ 5.22% 40 350.68$ 14,027.20$ 5.29% 19.3% 497.6%

35 Visa Inc. V 40 187.90$ 7,516.00$ 3.34% 40 218.73$ 8,749.20$ 3.30% 16.4% 231.9%

Total 174,110.51$ 77.27% 221,215.50$ 83.46%

Equity ETFs

36 Vanguard High Dividend Yield VYM 81 93.71$ 7,590.51$ 3.37% 81 91.51$ 7,412.31$ 2.80% -2.3% 48.8%

Total 18,774.13$ 8.33% 7,412.31$ 2.80%

Fixed-Income Securities & Others:

37 iShares Core U.S. Aggregate Bond Index AGG 80 112.37$ 8,989.60$ 3.99% 80 118.19$ 9,455.20$ 3.57% 5.2% 4.8%

38 Vanguard Tota l Bond Market Index Fund BND 65 83.86$ 5,450.90$ 2.42% 65 88.19$ 5,732.35$ 2.16% 5.2% 4.9%

39 SPDR Portfol io Aggregate Bond ETF SPAB 200 29.38$ 5,876.00$ 2.61% 200 30.79$ 6,158.00$ 2.32% 4.8% 4.2%

40 iShares 20+ Year Treasury Bond ETF TLT 30 157.73$ 4,731.90$ 1.79% -5.7%

41 Bris tol -Myers Squib Contingent Value Rights BMY^ 16 3.01$ 48.16$ 0.02% 16 0.69$ 11.04$ 0.00% -77.1%

Total 20,364.66$ 9.02% 26,088.49$ 9.84%

Sold

Security Ticker Shares Sale Price Purchase Price Sale Proceeds Cost Basis Gain/Loss Return Date

1 Healthpeak Properties Inc. PEAK 35 33.32$ 30.12$ 1,166.10$ 1,054.20$ 111.90$ 10.6% 2/27/2020

2 Cisco Systems CSCO 120 38.00$ 18.72$ 4,560.00$ 2,245.80$ 2,314.20$ 103.0% 3/6/2020

3 Cheniere Energy LNG 20 32.39$ 63.99$ 647.80$ 1,279.80$ (632.00)$ -49.4% 3/31/2020

4 Anheiser-Busch BUD 25 44.44$ 78.24$ 1,111.00$ 1,956.00$ (845.00)$ -43.2% 3/31/2020

5 Vanguard Tax-Exempt Bond ETF VTEB 50 54.53$ 54.95$ 2,726.25$ 2,747.25$ (21.00)$ -0.8% 8/28/2020

6 Anheiser-Busch BUD 25 55.29$ 78.24$ 1,382.34$ 1,956.00$ (573.66)$ -29.3% 10/5/2020

7 PowerShares S&P 500 High Div Port SPHD 254 33.92$ 35.84$ 8,614.41$ 9,103.36$ (488.95)$ -5.4% 11/3/2020

Actively Managed Totals 213,201.14$ 94.36% 254,716.30$ 96.10%

Insured Deposit Account (IDA) 12,700.77$ 5.62% 10,332.13$ 3.90%

Portfolio Value 225,950.07$ 100% 265,048.43$ 100.00% 19.95%

Scholarship Distributions (1/29/2020) 5,000.00$

Benchmarks

S&P 500 index change 3,230.78 3,756.07 16.26%

S&P 500 dividend yield 2.14%

S&P 500 total return 18.40%

Bloomberg Barclays US Aggregate Bond index 7.51%

Benchmark (80% the S&P 500 index + 20% the Bloomberg Barclays US Aggregate Bond index) 16.22%

vs. benchmark 3.73%

Investment Management Program Portfolio2020 Performance

Summary

December 31, 2019 December 31, 2020

john l. grove college of business financial advisory

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