Investment Proposal
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  • 1. Brokerage #3 Your Perfect Choice !"#$"#"%&'())*+ Thursday, October 17, 2013 ,+-."/+%0*1"2##".")" 3"#+/*-"%4*-(5 67(8"-%67"-)/
  • 2. Our client would rather lose some money to help his interests in innovation and social responsibility than gain money from a company that does not follow his desire Diversifying our portfolio by investing in companies from different industries that have a potential to increase their price Initial Options 1.Alternative energy ETF/Stocks 2.Innovative companies we admire 3.Companies that treat well their workers 4.Companies that are socially responsible Thursday, October 17, 2013
  • 3. Our objective: Invest 3000 USD with a risk greater than 10% Willing to help companies that are socially responsible, companies that treat well their workers and companies that aim to expand the good use of alternative energy. We want to be aggressive but smart Be able to earn a decent amount of money by investing in risky stocks Place to work Our Cummins Social Responsibility Tesla Company we admire Procter and Gamble Alternative Energy ICLN- Diversified because of countries and types of alternative energy choices: Thursday, October 17, 2013 Vestas- Wind power First Solar- Solar panels
  • 4. Options Faced: Stocks Stocks are primarily Bonds Mutual Funds Not the correct option in Usually you give your ETF’s Currency Exchange Probably the most An innovative way to invest your money. At used over a period of at this case. Long term money to a brokerage secure way of investing least 3 years. They might investment option with and they have different your money over a short this point, we do not be volatile and low risk. At present, with options on how to invest period of time. At least, it have the experience to unpredictable over a interest changes short period of time, changing, this might not portfolio by investing in unless you have reasons be a good decision. In that support your several stocks and bonds you pay the debt industries. By doing this assertion on why things of a company, and you might happen. it. They diversify your the risk decreases are not part owner of the because you do not only company. depend on one stock’s performance. Thursday, October 17, 2013 has become the easiest play with different to predict so it will be an exchange rations and option to consider. gain money, so it might be not secure because we do not know much about it.
  • 5. Tesla ICLN Vestas First Solar ICLN 17% Vestas 8% Tesla 17% First Solar 8% P&G 25% Final Investment Choices Thursday, October 17, 2013 Cummins 25% Cummins P&G
  • 6. “Because it is more expensive to screen for socially acceptable investments, they tend to under-perform the broad index funds owning everything. Author and advisor Rick Ferri has good advice: he recommends buying the whole market and using the extra returns to make a financial contribution to whatever Earth-friendly cause you believe in.” Thursday, October 17, 2013
  • 7. Alternative Energy Vestas FSLR ICLN Thursday, October 17, 2013 ICLN FSLR VWDRY 25% 50% 25%
  • 8. ICLN iShares Clean Global energy ETF Thursday, October 17, 2013
  • 9. Why ICNL? Supports the environment and foster innovation by providing and getting energy in sustainable ways which do not affect the environment and its surroundings. After three years in the index, it has started increasing after falling significantly during the first two years so it might be the moment to buy This ETF is our highest risk, but at the same time it introduces a new industry into our portfolio and balances it geographically. Thursday, October 17, 2013
  • 10. ICLN Stock 3Y Chart !"#$$%&'()* Thursday, October 17, 2013
  • 11. ICLN Stock Key Data !+,-.(',/0$%* Thursday, October 17, 2013
  • 12. Vestas - VWDRY Thursday, October 17, 2013
  • 13. !"#$$%&'()* Vestas Stock 3Y Chart Thursday, October 17, 2013
  • 14. Vestas Stock Key Data • Stock history: VWDRY is one of the few stocks that holds a different pattern than all of the rest of the alternative energy sector. Yes, it plummeted during 2011, but the price of this stock has already started to increase. Their price increased by 367% in the past 52 weeks, and it is about four times larger than its minimum value in the past three years. • Beta: Once again, as being a single alternative energy stock which depends simply in wind energy, this company is really risky and has a beta of 2.07 which shows their high volatility. • P/E ratio: Their P/E ratio isn’t stated, but most of the energy stocks stand near 10, and their recent performance proofs that this shouldn’t be an outlier, so if this is how many financial advisors predict, it is another reason to invest in the stock. Thursday, October 17, 2013
  • 15. Forecast • At present, they are about to expand their production of energy through wind from wind farms to offshore wind turbines. As seen in the video, giant wind flaps, a diameter of about 160m (larger than London Eye), will increase their production significantly. Aside from being a great source, it is vital because in the middle of the sea the wind is much more constant. The only problem would be maintenance of the system, but they have developed a way of accessing them each 27 hours. In this case, workers get intrinsic and extrinsic motivation, because they really need to love engineering to work in this and they get paid high wages and they work under the most secure system. Thursday, October 17, 2013
  • 16. First Solar - FSLR Thursday, October 17, 2013
  • 17. !"#$$%&'()* FSLR Thursday, October 17, 2013 Stock 3Y Chart
  • 18. FSLR Stock Key Data • Stock history: At present, their value is less than a third than their 3 year maximum. Similarly to every alternative energy stock, it plummeted during 2011 but in the start of 2012, if settled down and it established a price of about 30 dollars. • Beta: According to several sources such as Google and Yahoo, the Beta of FSLR stands in between 1.70 and 1.80. Clearly, it is a risky and volatile choice, and that’s why we are not investing just in this single stock but we have decided to split our money to have a final investment that is balanced, with risky stocks and a secure ETF. • P/E ratio: With a PE ratio between 10 and 11, it stands really near one of the most stable and large energy entities in the world: Exxon Mobile. This is a neutral factor, it doesn’t impact significantly beneficially or negatively our choice. Thursday, October 17, 2013
  • 19. Forecast • Thursday, October 17, 2013 First Solar is the only company in the industry of solar energy that uses Cadmium Telluride for their solar panels. This material, aside from being much more environmentally friendly than silicone of the classic solar panel, it works as a better conductor and it is much more effective. Because the use of this product in their process of extracting the energy, they are one of the few alternative energy that compete in price with normal energy producers, one of the main reasons of their success. In the future, as we run out of resources, these will become vital and the price will maintain and become lower that other types of energy, so people will start to get energy from first solar and their price will certainly increase.
  • 20. Comparison Thursday, October 17, 2013 !"#$$%&'()*
  • 21. Evidence & Support • • Exchange traded funds that hold alternative energy stocks are among some this year’s top-performing non-leveraged sector ETFs. • • Japan, China and the U.S. combine for nearly 55% of ICLN’s • ‘New Chapter’ “Today marks the beginning of a new chapter in offshore wind, a market segment with significant growth potential,” Marika Fredriksson, Vestas’s chief financial officer, said at a press conference in Tokyo today. • The pace of offshore wind installations has slowed this year, with the industry struggling to make grid connection in Germany and tap government support in China. Bloomberg New Energy Finance forecasts 1.7 gigawatts of turbines at sea will be installed this year, compared to 1.9 gigawatts in 2012. The market may grow to about 8 gigawatts in 2020. • The partnership bolsters Vestas’s ability to compete with Siemens AG (SIE) of Germany, the largest manufacturer of offshore turbines by capacity installed last year, said Kasper Larsen, a credit analyst at Danske Bank A/S (DANSKE) in Copenhagen. • “From a strategic point of view, this JV is becoming more capable of competing with Siemens in the offshore wind turbine market,” Larsen said. “You can now address utilities in a different manner than Vestas was able to do before.” Imagine the potency of an ETF that can offer exposure to alternative energy stocks as well as Chinese and Japanese equities. Investors do not need to imagine that alluring proposition because the iShares Global Clean Energy ETF (ICLN) delivers on all three fronts. Up 27% year-to-date, ICLN has allocations to more than 10 countries, ICLN is more focused on biofuels, ethanol, geothermal energy, solar and wind energy names. However, in a year where solar ETFs such as the Guggenheim Solar ETF (TAN) are among the best-performing sector ETFs, ICLN has enough solar exposure to have benefited from that industry’s resurgence. Thursday, October 17, 2013
  • 22. Best Place To Work Cummins INC - CMI !1$(&',2%.).3+4'* Thursday, October 17, 2013
  • 23. They “design, manufacture, and distribute products. It also services engines and related technologies, including fuel systems, controls, air handling, filtration, emission control and electrical power generation system.” Build the best engines !6+7+8'9+.* !05%%+4,/0$%* Thursday, October 17, 2013
  • 24. 2-B8CDD666/1$E4'6,/0$%D#'+,5('D>?FGDF?D?HD05%%+4,I4'6I;JI9+','#I9'<.+#'9D Get to know them better The new ISV5.0 :+##2+%8($;'2<-'215'#2'0$4$%=2 &'<6''42>?2<$2@?28'(0'4<2+42 0$%8.(+,$42<$2).,$#+4'2'4)+4', 5.0 liter V8 diesel engine Not only professional with a further vision to improve vehicles and engines, but INNOVATIVE. Thursday, October 17, 2013 !A5%%+4,/0$%*
  • 25. Cummins INC - CMI Testimonials - Employee Reviews “My time at Cummins was one of the best experiences for me. I worked under a very supportive manager who gave me the tools and resources I needed to do my job. I was not micromanaged. Work life balance was above average. The company is one of the few that really embraces diversity and career development.” “The culture at Cummins is great. They value putting out the best products available, while also making sure all the workers have a good work/life balance. They stress living healthy and being active outside of work. Everyone I have worked with has been incredibly helpful, and makes sure I either get my questions answered, or points me in the right direction.” “Working with a dynamic work team.” “People working together for a common goal. it sounds cliche but it's true.” (cumminsworkplace-googleimages) (indeed cummins-reviews) Thursday, October 17, 2013
  • 26. Cummins INC - CMI "Our mission is to motivate employees to act like owners" "They operate across cultures, functions, language barriers and time zones to solve the technical and logistical challenges created by a worldwide customer base." Cummins value the idea of “Serving and improving the communities in which we live in”, that's why employees have the opportunity of working on community service projects for at least four hours per year. such as.. tutoring in Greater Indianapolis area (cummins.com) Thursday, October 17, 2013
  • 27. " Fairness to all, the company extends benefits coverage to the domestic partners of employees who don't have traditional spouses. Those benefits include complete healthcare coverage, spouse and dependent life insurance, pensions, retiree medical coverage, family leave in accordance with the Family and Medical Leave Act, adoption assistance and relocation assistance." "Employees may be promoted when their contributions to the company increase. A promotion carries a minimum of a 7% increase in salary." "The environment becomes more than just about your job; it's about [whether you're] making things better" (Kyle Benning) "Cummins has made, and continues to make, significant investments in a range of exciting new products and in our distribution system to ensure that we continue to deliver profitable growth and help our customers succeed." (marketwired) (computerworld) Thursday, October 17, 2013
  • 28. Cummins INC - CMI Cummins forms part of the Fortune 500 corporation !"#$$%&'()* Thursday, October 17, 2013
  • 29. !"#$$%&'()* !K.-$$2L+4.40'* Beta & P/E P/E ratio for United Technologies Corp = 19.46 Beta for United Technologies Corp = 1.07 BETA OF 1.74 IS RISKY Risky = more revenue P/E low is less risky; trust that the revenue supports the amount of stocks being bought Thursday, October 17, 2013 or more loss
  • 30. http://online.wsj.com/article/PR-CO-20130206-906610.html Forecast !"#$$%&'()* They had a revenues of $17.3 billion in 2012 Just Expects to deliver revenues of $31 billion in 2018 released a Cummins expects to grow revenues at 2 to 3 times the rate of growth in global GDP new engine Revenue will grow faster than the economy of the country In 5 months if increasing at same rate than last year the stock value would be 150 Thursday, October 17, 2013
  • 31. Company We Admire Procter and Gamble Thursday, October 17, 2013
  • 32. Purpose “We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders and the communities in which we live and work to prosper.” -P&G Thursday, October 17, 2013
  • 33. Procter and Gamble Why admire this company? Innovative They not only work for themselves, but they work for the audience they produce for. Environmentally cautious They take care of employees Thursday, October 17, 2013
  • 34. Procter and Gamble Why P&G: -Environmentally responsible -Employees love their jobs -Best customer services -#30 in Forbes list of the most innovative companies -Has purified 5 billion liters of drinking water in Third World countries (USA today) -Two dozen P&G brands are sold for billions of dollars “Just like almost every stock in the world, you would have experienced at least one or two 40% to 50% drops in the market value of your Procter & Gamble stock during your holding period. That is the price of generating wealth through stock ownership. If you can’t handle that, park your money in the bank and be content with the meager returns that are available.” -Joushua Kennon Thursday, October 17, 2013
  • 35. Procter and Gamble Thursday, October 17, 2013
  • 36. Concerns Want the best people to work for them but... Fire employees to replace them with better ones Used many chemicals in their products but... Chemicals are in the process of being demolished from the company Locations of the factories are isolated but... Employee service is incredible, and time is flexible in work hours Thursday, October 17, 2013
  • 37. Beta & P/E Since the Beta is 0 < ! < 1 it means the company’s stock market will rise and fall as the years go on, making it very volatile. Thursday, October 17, 2013
  • 38. Comparison Kimberly-Clark Corporation Beta: 0.36 P/E: 20.56 Procter & Gamble Beta: 0.37 P/E:19.34 Thursday, October 17, 2013
  • 39. !"#$$%&'()* Procter and Gamble Procter and Gamble (P&G) is a world wide known company owning products such as Gillette, Herbal Essences, Tide, Duracell batteries, CoverGirl makeup, Fabreze, Pampers, Downy paper towels etc. Thursday, October 17, 2013
  • 40. Forecast The stocks will always rise and fall. P&G sells merchandise to 4.8 billion people who are unpredictable consumers. Volatile 2 years !"#$$%&'()* Thursday, October 17, 2013
  • 41. Social Responsibility Tesla Thursday, October 17, 2013
  • 42. Tesla What is Tesla? One of the few tech innovative car companies in the world. Want the world to be greener through their electrically manufactured cars Volatile company to invest in It is predicted that the stocks will rise over the years since their new model of car (Model X SUV) is going to be released. “There's a high likelihood that the Model X could prove extremely popular” Jefferies analyst Elaine Kwei noted earlier this year Kwei wrote in a research note earlier this year. "The current production line could be doubled to 80k-100k units." Thursday, October 17, 2013
  • 43. Tesla Although that may be the case, tesla already has begun being green; while other companies are planning to begin or are starting the process of being more ecological. Tesla already have started this process, knows what they need to help continue their success. “The electric car company already exceeded its shipment goal by delivering 5,150 instead of 4,500 cars during the second quarter. The company began its first delivery to Europe this week and plans to expand its reach in Asia, particularly China, later this year.” Investing in Tesla would not only help you, if they flourish, but also help the company and the ecological system. Making Tesla innovative and socially responsible. “In a research report earlier this year while upgrading Tesla shares to "buy," Deutsche Bank analyst Dan Galves said there could be exceptionally strong demand for the Model X.” “Tesla, by the way, raised over $1 billion during the second quarter by issuing 4.5 million shares of its common stock and $660 million of convertible debt.” Thursday, October 17, 2013
  • 44. Tesla Employee Reviews: “Quality Control Inspector!(Former Employee),!Fremont, CA – July 12, 2013 Pros: fast paced, extreme physical movement, and great co-workers Cons: long hours, unexpected overtime Tesla is a very demanding job. You must always be prepared for the unexpected. You learn how to adapt to changes every day, and managing my work throughout the entire process of building an electric car. We at Tesla work together as one, ONE SHOT! Because that is all we have. Most enjoyable part the intense fast paced work environment that keeps us busy even throughout the day. As being promoted to quality inspector, I had to create an entire work instruction with the director of quality and approval of quality engineers.” “Team Member body and white!(Former Employee),!Fremont, CA – August 29, 2013 Pros: good pay, sometimes free lunches on mandatory Saturdays and Sundays Cons: mandatory 12 hour days, 7 days a week. Very Productive workplace, at times overworking employees with 10-12 hour work days, 7 days a week.” “Inventory Control Analyst!(Current Employee),!Fremont, CA – September 3, 2012 Pros: Fun place to work Cons:: long hours; 6 or 7 days a week It's a great place to work but being a "stat up", need to work very long hours (11 to 14). Also 6 to, sometimes, 7 days a week.” Thursday, October 17, 2013
  • 45. Tesla !=.-$$2M4.40'* Thursday, October 17, 2013
  • 46. Comparison Tesla Ford Beta = 0.85 Beta = 1.4 Thursday, October 17, 2013
  • 47. Forecast CNBC By: The Associated Press “THE BIG PICTURE: Tesla currently makes one vehicle, the $70,000 Model S sedan. It is developing a crossover, the Model X, which is expected to go on sale next year and will likely cost more. Ultimately, the company wants to make a more affordable electric car _ known as Generation III _ in the $35,000 range, but it hasn't said when that car will go on sale.” “Shares of electric car maker Tesla Motors rose Tuesday (October 15) after investment bank Wedbush upgraded the company's shares and raised its target price by 33 percent to $240 per share.” Thursday, October 17, 2013 Bloomberg Business week By: The Associated Press
  • 48. $3,000 Thursday, October 17, 2013
  • 49. Your perfect Investment Thursday, October 17, 2013
  • 50. Diversified Portfolio 47 stocks ICLN 5 stocks FSLR 27 stocks VESTAS 3 stocks STOCKS 5 stocks Thursday, October 17, 2013 9 stocks
  • 51. Brokerage #3 Thursday, October 17, 2013