Today is the last meeting of OIG of this semester. We didn’t get a chance to update the portfolio, however, here is a stock that might be of interest to you.
Honda (NYSE: HMC) is a good stock to hold during the summer (time horizon of 4-6 months), with a conservative target price of $40 (now $35). It’s a good choice to hold it and give it enough time for the automaker and the market to digest the loss of the earthquake.
If you have any questions, please email Lingyi @ email@example.com for details.
Thanks for coming to OIG’s weekly meeting on Valentine’s Day. All the single ladies rock!!:) (and non-singles alike.)
We kicked off with an introduction of futures. Future is a riskier investment option than options. For details, please consult investopedia.
Yufan did a great market re-cap. She introduced us to Boston Beer Company（SAM). After selling EROC, we have been thinking for a really long time to buy a new stock. Yufan backs this stock on several grounds.
- Successfully withstood the financial crisis
- Has no debt or obligations to service, which is a huge plus
- International market presence and great earning forecast
However, our members also voiced out some concerns about SAM:
- Price too high (running at 94 at the time of decision)
- PE much higher than industrial average or major competitors （29+）
- Earnings report will be released pretty soon by the end of March
As usual, we held a vote, and reached a consensus of buying 30 shares of it at $90. If you have any questions or concerns about this stock, please contact Yufan.
P.S. Our club donation is coming out soon. It is operated on a first come first served basis. If you or your club want to get OIG funding, you will need to be the first 5 people to submit a proposal to our publicity chair Sophia Abboud. Look out for Sophia’s email.
It is the annual hell week’s time for Bryn Mawrtyrs. Enjoy this special time of the year with your heller (or hellee)!
The following information was compiled by Yufan Wang, Portfolio Manager of Owl Investment Group. Hopefully it will give you girls/guys some idea on how the stock market will move.
- Sysco released earning today, missing analysts’ estimates. Share tumbled 6.2%;
- AOL to Acquire Huffington Post for $315 million;
- Nokia, under new CEO, prepares to freshen its executive ranks;
- Bonds Flash an Inflation Alert;
- China begins to stockpile Rare-Earth Metals;
- No Rush to Hire Even as Profits Soar;
A heads-up for Mawrtyrs: There will be an interesting Career Lab Series hosted by Forte Foundation.
Feb 24th, 2011
Tired of the old “bored” room and old-school business? Join Forté’s 2011 Career Lab to explore how business knowledge can enhance your academic background, professional ambitions, and social or service interests, and can help you segue into an exciting and opportunity-rich career. Accomplished women from Forté Foundation sponsor companies and schools will reveal the new world of business and help you envision your role in it.
Who Should Attend? All undergraduate women who dream of a fun and successful business careers, regardless of major. Liberal Arts, Engineering, all majors welcome. Cost? Free
Register today @ www.fortefoundation.org/careerlab
Today we sold our 210 shares of Eagle Rock Energy Partners LP (EROC) with a stellar 94% profit after holding the stock for a whole year.
Yufan executed the sale in front us on the computer screen in Taylor F. It was gratifying to take this step forward and cash in some fruits of our labor. 🙂 All of our members present consented to this sale.
EROC is a domestically focused energy company in the business of natural gas. It has been making negative earnings for two years except for two quarters last year. We had looked at this stock before winter but decided to postpone the sale because natural gas prices generally rise during winter, which is a good sign for companies like EROC.
Our rationale for selling it:
- Disappointing earnings: Stocks like EROC can’t go up forever without the support of strong earnings.
- We are lucky to get a 94% increase in price already, far exceeding our original selling benchmark of 65%.
- It’s time for us to diversify our portfolio and invest in other stocks.
Because of time limits, we didn’t look into other stocks today. But one sector to look into is rare-earth. China has been setting up export quotas for its rare-earth resources. As a result, US companies have increased their production, making it a good time to look into this revived industry.
Other than EROC, Ruilin introduced to us the concept of Options. According to Investopedia, the definition of an option is: A contract that gives the buyer the right, but not the obligation, to buy or sell an asset at a specific price on or before a certain date. An option, just like a stock or bond, is a security. It is also a binding contract with strictly defined terms and properties.
One more thing: Forte Foundation’s Career Lab is taking place on campus soon. Please make sure to check your mailbox and RSVP soon if you are interested. This is a free event and will expose you to a myriad of information related to business.
Janney Montgomery Scott Speaker: Cara Petonic
Cara Petonic ’07
Equity Research Associate at Janney Montgomery Scott LLC
Cara shared her experience at an investment bank with us. Thanks Cara!
Owl Investment Group went on an exciting trip to New York one Friday morning of November to check out some of the interesting investment firms on Wall Street.
We visited J.W. Bristol, a small asset management firm on the street. Two of the managing directors Bob and Kevin generously hosted us. We had a four-and-a-half-hour long meeting discussing how Bristol allocates its asset and their investment strategies. It was a great fun! We also learned about their general customer base, what it takes to invest in a particular stock and general time horizons, etc. We were genuinely impressed by their integrated qualitative as well as quantitative approach to each stock. Their ability to dig deep into each of the stocks in terms of field studies, interviewing, relentless due dilligence inspired us a lot as new beginners who are still trying to play around our 100,000 funds.
Here are two funny pictures we had at lunch. We dined at a nice little Japanese place.
Here is a fun picture:
See how cool we are are…wait, you are missing me here because I was the “invisible one” taking the hilarious picture. John isn’t in the picture because he was having a phone call with some investment bankers.
In the afternoon, we visited Morgan Stanley at 1 New York Plaza. We met with Ms. Leslie Knotts. She graduated about 10 years ago and had extensive work experience in UK, US and Hong Kong. She answered a lot of questions about how she got to MS and her experience abroad. It was exciting to see Bryn Mawr alumae like her who goes out into the world and blossom.
New York Trip one of OIG’s annual event. If you are interested, just join us and be our member.
This week at OIG, we watched the Wall Street Journal video special about the 2008 crisis when everything went sour.
Please check it out if you missed our meeting.:)
There is certainly a lot of information today.
Ruilin introduced 2 buzz words: Sharpe Ratio and LTM. Both are very useful tools to analyze stocks and portfolio performance. Then we reviewed our portfolio (AT LAST!!) now that our password works again. Yufan sold China Education Alliance (CEU) in front of all of us. We are glad that today it made a 7% growth, that’s more than 1oo dollars recouped.
Then everyone got a piece of news cut off from the Wall Street Journal. We shouted out the words that we didn’t understand. Here is a list of them:
Arbitrage: the simultaneous buy and sale of an asset to profit through the inefficiency of the market. (Isn’t that neat?)
Alpha: One of the five useful tools in Modern Portfolio Theory. It basically compares the risk-adjusted performance of a portfolio with a benchmark index (e.g. LIBOR, MSCI, S& P 500, etc)
TIPS: Treasury Inflation Protected Securities. In other words, it’s used to protect your assets against the threat of inflation.
Quantitative Easing: OMC through FOMC–Check your intro to Macro book! Just remember that bond prices and interest rates are inversely related.
Gross Margin: Revenue net of Sold Goods. For comparison, please refer to Net Margin, Operating Margin, etc.
One last thing: reminder. For those of you that are joining us for the trip to New York, please show up at 6:45 am (I know it’s early) at Pem Arch. We will depart for Manhattan at that time.
Thanks to all of you who presented at OIG’s annual Club donation this week! Because our funding is limited, we could only grant our donations to those that we think are in more need of our support. If you didn’t get the funding this time, please don’t be discouraged. There will be another opportunity in the spring.
Here is a list of the club that we chose to fund this time:
Ping Pong Club $400
Seven Sisters in China $600
Bi-c0 Finance $250
My Lab $500
If you have any questions, please contact Sophia Abboud: firstname.lastname@example.org
We finally decided to sell China Educational Alliance (CEU). This stock was bought around 6 months ago in the spring semester with the intention to diversify our portfolio in the BRIC countries. And its price has gone down ever since.
After a detailed background search, we found that there are just so much that we didn’t know about this company. First, it is not a Chinese company, which is quite contrary to its name and our previous thoughts. CEU originally grew out of a shell company established in North Caroline specializing in realty. Second, it’s revenue generators are suspicious. Investigation shows that it is actually a holding companies with at least 7 different business subbranches in industries as diverse as consulting, tutoring, online resources and vocational information. Their tutoring centers have received complaints of delayed employee payments. The educational game that they claimed to bring them the most revenue is dysfunctional and virtually unknown in China. Let alone that nothing in Chinese or English could be found about their consulting company. (For detailed information and a PowerPoint presentation, please contact email@example.com)
The proceeds of this sale will amount to around $2,000, which we will use toward club donations next week.