Atkins Investment Group Mid-Semester Review

2015 Annual Report
Atkins Investment Group
Mid-Semester Review
Fall 2015
AtkinsInvestmentGroup

Click to edit Master Title style
Letter From the President ………………………………………………………………………………… 3
Fall 2015 Members ………………………………………………………………………………… 4
Recent Events: Golf Tournament ………………………………………………………………………………… 5
Economic Summary ………………………………………………………………………………… 6
Performance Since Inception ………………………………………………………………………………… 7
Portfolio Review ………………………………………………………………………………… 8
Sector Outlook
 Basic Materials ………………………………………………………………………………… 10
 Consumer Discretionary ………………………………………………………………………………… 11
 Consumer Staples ………………………………………………………………………………… 12
 Energy ………………………………………………………………………………… 13
 Financial Institutions ………………………………………………………………………………… 14
 Healthcare ………………………………………………………………………………… 15
 Industrials ………………………………………………………………………………… 16
 Technology ………………………………………………………………………………… 17
 Telecommunications ………………………………………………………………………………… 18
 Utilities ………………………………………………………………………………… 19
 Fixed Income ………………………………………………………………………………… 20
How to Get Involved ………………………………………………………………………………… 21
Table of Contents
Mid-Semester Review | 2Atkins Investment Group | Fall 2015

Dear Friends,
It is my pleasure to be serving as President of the Atkins Investment Group for the 2015 – 2016 academic year.
Historically, Atkins has been a Group comprised of the finest students that the University of New Hampshire has
to offer and this year is no different. Through my tenure as Vice President of Operations, as well as Utilities
Sector Analyst and Leader, I have developed a keen awareness and appreciation for all that the Group has to
offer to our members, alumni, and University.
On behalf of the Executive Officers, I would like to thank all current students, alumni, guest speakers, and
faculty for your continued commitment to the Group. You are the reason the reputation of Atkins is one that is
beyond reproach. The performance of our portfolio is not what draws new members, generous donations, and
admiration from students, staff, and alumni – it is you. It is not the presentations, financial models, or finance
acumen that makes the Group so successful year in and year out – it is your commitment to excellence and
dedication to our students.
March 2015 marked the 10th anniversary of the Atkins Investment Group since inception and with it came
reflection of attributable successes and equally as valuable failures. For our Group to continue being successful,
we must utilize all areas of academic study and demographic diversity in order to focus on experiences that
meaningfully contribute to differentiated points of view. We must not only attract and retain this talent, but
encourage our team to value diversity, collaborate productively, and remain intensely focused on collective and
individual development. This year, members range from sophomores to seniors including over eight majors and
representative of not only finance and accounting, but more sector-targeted majors such as Biochemistry,
Computer Engineering and Mechanical Engineering. Member success was evident through our 3.6 GPA
average, 100% internship placement rate, and 95% full time placement rate at top firms including Goldman
Sachs, Barclays, York Capital Management, and the Federal Reserve Board.
To integrate returning students and first year analysts, the semester began with an intensive training program to
introduce our objectives, values, and culture. Developed by Officers and Sector Leaders, the classroom-based
training covered both conceptual fundamentals and practical application of subjects such as accounting,
corporate valuation, statistical analysis, and financial modeling. Our team members interacted with one another
to learn about the importance of determining career interests, building networks, and time management.
In addition to classroom education, Atkins has been involved in many on and off campus events to increase
experiential learning for students. Semester to date, we have had several guest speakers observe presentations
and share valuable perspectives. Guests included Morgan Rutman of Willoughby Capital Management, Zachary
Leach of PA Consulting, Ellen Lemire of Putnam Investments, Kerry Pope of Fidelity Investments, Richard
McCready of The Davis Companies, Richard Davis of Rampart Investment Management, and Jason Clark of
The Baupost Group. Atkins was also selected to present to David Greenlaw, Chief US Fixed Income Economist
at Morgan Stanley, where the Officers shared Group objectives, portfolio strategy, and Fixed Income Sector
outlook. In an effort to maintain and augment relationships with alumni, professionals, and supporters of our
organization, the Group held the first ever Atkins Investment Group golf tournament on October 23rd at the
Portsmouth Country Club.
Reflecting on the past 10 year of success, the Group’s progress is largely attributable to years of intellectual
curiosity, collaborative achievement, and encouragement from faculty, alumni, and mentors along the way; we
are looking forward to an even more successful decade to come. While I am proud of the progress that past
leadership has demonstrated, I recognize the many challenges that await, and I am confident our Group has the
resources and ability to appropriately tackle each and every one.
John Schwartz
President
Letter From the President

Fall 2015 Members
2015 AIG Officers
John Schwartz
President
Email: jmu363@gmail.com
Justin Lappin
Portfolio Manager
Email: jwb54@unh.edu
Jason Michonski
Executive Vice President
Email: jja96@unh.edu
Austin Bauer
Chief Economist
Email: acy453@unh.edu
Alex Febonio
VP of External Relations
Email: ajj686@unh.edu
Jacob Gomez
VP of Operations
Email: jgb55@unh.edu
Sector Sector Leader Analyst Analyst
Michael O'Donnell Cullen Moore Zachary Fitzgerald
mje287@unh.edu cm2014@unh.edu ztf2000@unh.edu
Jonathan Kiskinis Billy Cavanaugh Alexys Gilcreast
jmh347@unh.edu wc2001@unh.edu aag2002@unh.edu
Richard Roy Jose Bowen Nick Savoia
rdh39@unh.edu jac2226@unh.edu nrs2000@unh.edu
Austin Bauer Finn Johnson Bradford Kelley
acy453@unh.edu fnt4@unh.edu bjb66@unh.edu
Jonathan Harrison Niccolo Gilgendorf Nicholas Bouchard
johnathanrharrison1@gmail.com nao58@unh.edu nmb2006@unh.edu
Eric Murray Connor Leppzer Courtney Debus
ecn42@unh.edu cmy946@unh.edu cdebusx3@gmail.com
Alex Febonio Matt Protzman Patrick Hammond
ajj686@unh.edu m.s.protzmann@gmail.com pjb64@unh.edu
Galen Hand Kelsey Ulaskiewicz
grf25@unh.edu kde222@unh.edu
Jacob Gomez Becca Atkinson Steve Frye
jgb55@unh.edu rlb48@unh.edu sjk79@unh.edu
Will Taveras Jacob Lahoux Jessica Selensky
wpm5@unh.edu jalehoux@gmail.com jes2002@unh.edu
Jason Michonski Garett Malagodi Connor Whelan
jja96@unh.edu gsv23@unh.edu cpf37@unh.edu
Charlie DeMarco Nick Muldrow Aaron LeLacheur
cj232@unh.edu ntd27@unh.edu aml2000@unh.edu
Nick Bagley Robert Doretti George Pantelis
nlb2019@unh.edu rlc73@unh.edu gcv25@unh.edu
Technology
Telecommunications
Utilities
Industrials
Energy
Financials
Fixed Income Loans
Healthcare
Fixed Income Corporates
Basic Materials
Consumer Discretionary
Consumer Staples
Economics Team
Spring 2015 Sector Leaders and Analysts

On October 23rd, the Atkins Investment Group celebrated its 10-year anniversary with a golf tournament held at
Portsmouth Country Club with over 70 attendees and 14 sponsors. Atkins would like to thank all alumni, faculty,
sponsors, and friends of the group who showed support and made this event a great success.
Recent Events: AIG Golf Tournament
Thank you to our event sponsors for their generosity

The S&P 500 struggled through the end of August and early
September, falling ~10%, as economic signals were mixed and
volatility increased abroad. The US economy has shown signs of
continued improvement, as jobless claims continue to trend downward
and wage growth has began to pick up, however there are still areas
of concern with stagnant growth in the manufacturing sector and
inflation remaining stubbornly low.
Low inflation is a key theme in the US economy and capital markets
today, as it is one of the two key indicators that the Fed is watching to
determine the timing and velocity of an interest rate hike. At their most
recent meeting in October, the FOMC decided to leave interest rates
unchanged with the possibility of tightening monetary policy at their
December meeting. That being said, it is still highly likely that the rate
hike may be pushed off until mid-2016. The Fed cited concerns over
low inflation and the underutilization of labor, while continuing to
monitor international developments.
The ECB is also struggling with the threat of a deflationary
environment, even after the launch of their quantitative easing
program. Eurozone inflation fell in September, slipping into negative
territory primarily due to low oil prices, yet core inflation remained
positive. With ~30% of the ECB’s QE program completed and little
optimism surrounding the future of the Eurozone economy, it is likely
that their bond buying program will be extended and measures will be
taken to incentivize financial institutions to begin lending as deposit
balances are well above required reserve ratios.
As central banks are trying to increase inflation, low commodity prices
have proven to be a significant drag. Oil prices continue to hover
around $45 a barrel, while natural gas prices fell to $2.30 MMbtu in
October. The low prices of these input goods are continuing to restrain
inflation, impacting profits of commodity intensive industries and
creating volatility in global markets.
Arguably the largest contributor to volatility in August and September
was the economic slowdown in China. Weak manufacturing data,
combined with slowing global demand for Chinese exports, a shaky
housing market, and an extensive equity market bubble, contributed to
a pullback in late August. The PBOC and the Chinese government
have remained accommodative, cutting interest rates and reserve
requirements to improve economic growth. Despite government
efforts, the health of the Chinese economy has been called into
question and has increased volatility in global markets.
The US economy remains healthy, despite concerns abroad, and we
have positioned our portfolio to capitalize on these macroeconomic
trends in order to execute on our long-term investment goals.
Austin Bauer
Chief Economist
Economic Summary
US Unemployment Rate
Eurozone Inflation
China GDP Annual Growth
-0.8%
-0.6%
-0.4%
-0.2%
0.0%
0.2%
0.4%
0.6%
4.6%
4.8%
5.0%
5.2%
5.4%
5.6%
5.8%
6.0%
6.4%
6.6%
6.8%
7.0%
7.2%
7.4%
7.6%
7.8%
8.0%
8.2%
Q3
2012
Q1
2013
Q3
2013
Q1
2014
Q3
2014
Q1
2015
Source: U.S. Bureau of Labor Statistics
Source: European Central Bank
Source: The World Bank

Performance Since Inception
Fund Performance
Since inception on March 1st, 2005, the Fund has achieved a return of 84.9% (compounded annual growth rate
of 6.2%) compared to the S&P 500 total return of 102.9% which computes returns assuming all dividends are
reinvested (compounded annual growth rate of 7.2%). The Fund uses the Sharpe Ratio and Value-at-Risk to
determine its risk/return characteristics. To date, the Fund’s Sharpe Ratio is slightly less than that of the S&P
500 total return index. On an absolute basis, the Fund took on less risk than the broader market as represented
by a modestly lower standard deviation. The Value-at-Risk was computed using a 95% confidence interval and
shows that the Fund presents less monthly downside risk than the S&P 500. Our conclusion is that our under-
performance has largely been a result of the cash balance we maintain on hand, while our benchmark index
assumes all dividends are reinvested, and a substantial hit to performance in calendar year 2013.
Overall, the Fund outperformed the S&P 500 in six out of the last nine calendar years and more substantially on
an academic year basis. Recently, we have been gaining back returns lost to the market in 2013; outperforming
during the 2013 – 2014 and 2014 – 2015 academic years by 4.6% and 2.2% respectively. Given the extended
secular bull market, stretched valuations, tight correlations, and our passively managed summer strategy, we
are pleased to be trading relatively in line with the broader market index.
Average Return Standard Deviation Sharpe Monthly
Fund Characteristics Monthly Annualized Monthly Annualized Ratio VaR CAGR
Atkins Investment Group 55.00% 7.81% 4.01% 17.23% 0.33 -6.62% 6.18%
S&P 500 0.64% 8.89% 4.23% 17.85% 0.38 -6.99% 7.14%
Calendar-year Returns (%) 2008 2009 2010 2011 2012 2013 2014
Atkins Investment Group -36.70% 31.50% 12.30% 3.90% 14.20% 22.40% 13.60%
S&P 500 -37.40% 25.60% 14.40% 1.50% 15.20% 31.50% 13.00%
0
0.2
0.4
0.6
0.8
1
1.2
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
S&P 500
Atkins Fund

Year to Date Performance:
With the recent equity market correction, our invested capital is underperforming the S&P 500 year-to-date by
100bps with a slightly greater drag for our entire portfolio due to a large cash balance on hand. However, many
of our heavily weighted sectors such as Energy, Financial Institutions, Industrials, and Healthcare are
outperforming their respective benchmarks in the mid-to-high single digit range. This is attributed to relatively
defensive and concentrated plays that have allowed us to weather volatility and capture upside upon recovery.
Portfolio Strategy:
There are risks in the market today that we are aiming to steer away from, while concentrating the portfolio in
high conviction value plays that align with our investment philosophy. The first major risk being foreign
exchange and the impact on multinational firms in terms of exchange rate risk and international demand
deceleration as goods become more expensive abroad. Additionally, we are attempting to limit our exposure to
commodity price volatility by remaining conservative in Basic Materials and Energy through exposure to
defensive downstream positions, renewable energy companies, and metals plays in companies with strong
economic moats. The last market factor that we are taking into consideration is the potential interest rate hike
and how it may impact certain sector’s going forward – both positively and negatively.
Throughout the remainder of the academic year, we are looking to remain overweight in Energy, Health Care,
and Financials, and neutral weight in Materials, Discretionary, Industrials, and Technology. We plan to remain or
move towards underweight positioning in Telecommunications and Consumer Staples as well as bond proxies
such as Utilities and REITs. From a high-level standpoint, we do not plan on adding an excessive amount of
securities to our portfolio for the purpose of diversification, but rather concentrating high-conviction positions.
With our cash balance on hand and an over-all healthy US economy, the Atkins Investment Group is looking
forward to capitalizing on the US equity markets and our disciplined investment strategy.
Portfolio Review
Year to Date Performance
Sector AIG Returns(YTD) Benchmark (YTD) Relative Return Weight
Basic Materials -9.9% -8.6% -1.30% 4.0%
Consumer Discretionary -1.5% 10.5% -12.10% 13.3%
Consumer Staples 2.6% 4.5% -1.94% 9.4%
Energy -6.4% -16.9% 10.56% 17.9%
Financials 2.0% -3.4% 5.34% 13.4%
Health Care 7.3% 3.6% 3.71% 12.5%
Industrials 3.7% -4.7% 8.36% 6.0%
Technology -0.9% 4.9% -5.81% 10.2%
Telecommunications -1.7% -2.0% 0.29% 5.6%
Utilities -6.5% -6.2% -0.32% 7.9%
Fixed Income -4.0% -0.4% -3.61% 3.1%
$-
$50
$100
$150
$200
$250
$300
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15
Thousands
Invested Capital
Atkins ROIC
S&P

-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
31-Aug 10-Sep 20-Sep 30-Sep 10-Oct 20-Oct 30-Oct
Atkins Fund
S&P 500
Portfolio Update:
At the beginning of the 2015 – 2016
academic year, the Group took part in a
portfolio restructuring project in which
we broke up our ESG sector holdings
and placed them into their respective
sectors. With additional holdings in
sectors such as Energy and Financial
Institutions, we liquidated the positions
in these sectors that we believed
presented the least favorable risk/reward
balance. This being said, the Group
currently has ~7.0% of AUM in cash and
~10.0% temporarily parked in an S&P
500 ETF to avoid betting against the
market.
The global economic slowdown,
Chinese equity market correction, and
worry over the global debt burden,
resulted in heightened equity market
volatility. The corresponding market
pullback now presents opportunities to
take advantage of more attractive
valuations in the market.
With the expansion of our Fixed Income
platform, our team is actively seeking
ways to play a rising interest rate
environment through current exposure to
floating-rate leveraged loans, short
duration investment grade bonds, and
hedged high yield ETFs.
Portfolio Performance (8/31/2015):
Since the beginning of the academic
year, our portfolio took a hit from
heightened equity market volatility, yet is
still trading relatively in line with the S&P
500. Some of our worst performing
holdings were impacted by idiosyncratic
factors that were unforeseen at the time
of initial research and analysis. Thanks
to last year’s Executive Officers, our
weightings in the hardest hit securities
were representative of the risk that they
presented and therefore did not have a
substantial drag on our portfolio
performance. Additionally, we were able
to remain defensive in commodity
intensive industries which allowed our
portfolio to weather downside pressures.
Justin Lappin
Portfolio Manager
Portfolio Review
Academic Year to Date
Top Five Performing Holdings Since 8/31/2015 (%)
Company Name Sector Market Value Gain (Loss) Weight
LEAR CORP IND $ 4,901.20 19.20% 2.40%
GENERAL ELECTRIC IND $ 2,356.80 18.69% 1.15%
AMERICAN WATER W UTL $ 3,765.45 11.53% 1.84%
PROCTER & GAMBLE CS $ 5,796.75 9.37% 2.83%
COMCAST CORP-A CD $ 7,692.50 9.25% 3.76%
Worst Five Performing Holdings Since 8/31/2015 (%)
Company Name Sector Market Value Gain (Loss) Weight
NRG ENERGY UTL $ 1,265.00 -36.50% 0.62%
SUNEDISON INC EN $ 921.70 -31.83% 0.45%
EAGLE MATERIALS BM $ 2,300.76 -21.90% 1.12%
HCA HOLDINGS INC HC $ 1,995.20 -20.57% 0.98%
QUANTA SERVICES IND $ 1,352.40 -20.30% 0.66%
Top Ten Holdings by Weight (%)
Company Name Sector Market Value
Since
Purchase Weight
SPDR S&P 500 ETF SPDR $ 22,312.80 4.13% 10.91%
APPLE INC TECH $ 14,318.75 92.61% 7.00%
BECTON DICKINSON HC $ 9,852.50 83.01% 4.82%
BLACKSTONE GROUP FIG $ 8,522.50 17.39% 4.17%
COMCAST CORP-A CD $ 7,692.50 69.40% 3.76%
CAPITAL ONE FIG $ 7,615.68 4.38% 3.72%
HALLIBURTON CO EN $ 7,496.00 -7.99% 3.66%
AMERICAN INTERNA FIG $ 7,310.40 41.09% 3.57%
GILEAD SCIENCES HC $ 6,657.60 31.29% 3.25%
GENERAL MILLS CS $ 6,404.20 5.13% 3.13%

Basic Materials | Neutral
Sector Leader | Michael O’Donnell
Sector Analyst | Cullen Moore
Sector Analyst | Zach Fitzgerald
Source: Bloomberg Source: Bloomberg
Strategy
Being a commodity and macro intensive space, Atkins is seeking to maintain a relatively conservative strategy
in the basic materials sector. We are currently attracted to the petrochemicals and metals & mining spaces in
companies that have defensive business models, healthy balance sheets, and opportunities for value creation.
Current basic materials holdings are positioned to take advantage of a strong domestic residential and non-
residential construction environment, strength in auto-vehicle sales, and railroad capital expenditures. Due to a
volatile commodity environment, the Basic Materials team is screening for new opportunities in less traditional
materials companies such as those exposed to flavor and fragrance chemical production.
Top Pick
Steel Dynamics (STLD): With downside pressure in steel pricing due to excessive dumping from Chinese
producers, STLD was trading at a significant discount to peers, taking into consideration their defensive and
valuable business model. STLD is poised to weather the tough commodity environment due to their vertically
integrated operations and in-turn sustainable high margin business, diverse product portfolio, and attractive end-
market distribution in areas poised for growth. Our team currently has a $24 price target on the name, implying
~30% upside from current levels.
Headwinds
Commodity prices are approaching their worst period of downside pressure and volatility since the commodity
crisis in 1998; steel pricing being hit as a result of excessive Chinese dumping. With progress in US steel
producer’s filing of a dumping case with the WTO, encompassing a retrospective tariff on Chinese producers
upon conclusion, we see this as a short-to-medium term headwind. Additionally, a weak oil price environment is
contributing to competitive pressures for chemicals producers. Lastly, the emerging market slowdown has been
a cause for concern for investors in the basic materials sector.
Tailwinds
Valuations are well below long term averages and the average discount (premium) to the S&P 500, largely due
to downside pressures in the sector. We believe there may be select areas in the space that provide a favorable
risk-reward tradeoff. Due to the headwinds mentioned above, we plan to remain neutral on the sector.
Mid-Semester Review | 10
Sector Outlook
Atkins Investment Group | Fall 2015
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
12/31/2014 3/31/2015 6/30/2015 9/30/2015
AIG BM XLB S&P
-50%
-30%
-10%
10%
30%
50%
70%
90%
0.0 x
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
40.0 x
45.0 x
1/4/1994 1/4/1999 1/4/2004 1/4/2009 1/4/2014
Discount/Premium to S&P BM P/E S&P P/E
Relative Performance (YTD) Historical Valuation

Consumer Discretionary | Neutral
Sector Leader | Jonathan Kiskinis
Sector Analyst | Alexys Gilcreast
Sector Analyst | Billy Cavanaugh
Strategy
The Consumer Discretionary team is taking into consideration weakness in the media space resulting from the
“cord-cutting” fad by cable programmers, as consumer demand shifts towards streaming services. Our current
holdings are looking to capitalize on pent-up demand and low resource costs with GT, low cost retail sales and
e-commerce through TJX, and strong demand for organic and natural foods with HAIN. Going forward, the
Consumer Discretionary team is remaining conservative on new buying opportunities as overall sector
valuations appear to be stretched. We believe that with the strength of the US economy and consensus on
continued growth, there are attractive opportunities within subsectors that have been beaten down, such as
casino and gaming. With relatively high valuations, we plan to remain neutral on the sector.
Top Pick
The TJX Companies (TJX): Relative to other low-cost retailers, TJX presents an undervalued opportunity. We
believe their dynamic merchandising strategy, growth in e-commerce, low cost operations and effective
inventory management, coupled with an improving US economy, will drive upside in the shares. Our team
currently has a $85 price target on the name, implying ~17% upside.
Headwinds
FX impacts on international demand and sales are hurting firms with multinational exposure. The sector has
outperformed the S&P 500 by 700 bps year to date, stretching valuations. Valuations are trading above
normalized long term averages and have experienced a divergence relative to the S&P 500 since the Great
Recession. Being a value fund, we plan to remain cautious on future investments in the space.
Tailwinds
Commodity prices have reduced costs for producers of certain consumer products, while increasing consumers
disposable income. Progress in unemployment and modest wage growth, cheap access to capital, and
improvements in consumer confidence is expected to bolster discretionary spending for the foreseeable future.
Lastly, millennial income growth and increasing household formation may prove to be a catalyst for the sector.
Sector Outlook
-10%
-5%
0%
5%
10%
12/31/2014 3/31/2015 6/30/2015 9/30/2015
AIG CD XLY S&P
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
0.0 x
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
1/4/1994 1/4/1999 1/4/2004 1/4/2009 1/4/2014
Discount/Premium to S&P CD P/E S&P P/E

Consumer Staples | Underweight
Sector Leader | Richard Roy
Sector Analyst | Jose Bowen
Sector Analyst | Nick Savoia
Strategy
We are optimistic on food & beverage producers’ ability to capture the shift in “good for you” products, while the
headwinds in this space present less risk than household and personal products. Valuations may be slightly
stretched relative to the S&P 500, yet we believe there is value in certain subsectors that may be worth
pursuing. Going forward, our strategy is to capitalize on businesses that provide a balance between value and
growth. With staples being a historically defensive sector, we believe that the limited growth catalysts and
relatively expensive valuations provide justification to remain neutral on the sector throughout the remainder of
the year so that we are able to put more emphasis on more attractive sectors in the portfolio.
Top Pick
J.M. Smuckers (SJM): SJM’s ability to shift their product portfolio towards changing consumer health demands,
conservatively tap into international markets, sustain attractive margins, and maintain a healthy balance sheet
contribute to an attractive balance of growth and value creation. Their recent acquisition of Big Heart Pet Brands
will prove to be cash flow accretive by mid-2016 and will drive sustainable future growth. Our team has a $135
price target on the name, implying ~16% upside from current levels.
Headwinds
Consumer staples firms have been looking to tap into emerging markets as a long-term growth opportunity,
however this exposure does present short-term headwinds as emerging market growth has remained sluggish.
With increasing emerging market exposure comes continued FX risks as a result of the strength in the USD.
Lastly, although food costs have stabilized, many consumer staples companies are facing pressures through
increased commodity costs. This has resulted in compressed margins, despite increases in revenue. Valuations
are in-line with normalized long-term averages and average discounts to the S&P 500.
Tailwinds
Persistent product innovation by food producers to meet consumer demand for pure and simple products such
as high-protein, low-carb, and gluten-free foods (the “good for you” products), will drive growth going forward.
Stable domestic growth and restructuring initiatives by food producers through cost controls, divestitures, and
M&A may help foster growth and profitability in the sector.
-7.5%
-5.5%
-3.5%
-1.5%
0.5%
2.5%
4.5%
12/31/2014 3/31/2015 6/30/2015 9/30/2015
AIG CS XLP S&P
Sector Outlook
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
1/4/1994 1/4/1999 1/4/2004 1/4/2009 1/4/2014
Discount/Premium to S&P CS P/E S&P P/E

Energy | Overweight
Sector Leader | Jonathan Harrison
Sector Analyst | Niccolo Hilgendorf
Sector Analyst | Nick Bouchard
Strategy
With an incredibly volatile oil and natural gas environment due to supply side issues and little transparency into
the future of OPEC production, the energy team is employing a longer-term strategy than other sectors in the
portfolio. Our holdings provide protection through exposure to mid and down-stream segments while taking
advantage of deep value based opportunities in spaces that may be more volatile in the near term. Going
forward, the energy team is looking to tap into exploration and production companies that have a high-quality
asset base in low cost production areas and healthy balance sheets. With cheap valuations in the space, yet
high levels of risk due to the macro environment, we plan to remain overweight in the sector but will utilize a
conservative approach in seeking out future investment opportunities.
Top Pick
Spectra Energy (SE): SE’s long-term fee based contracts and ample backlog provides downside protection in a
volatile environment. With sustainable margins, an ability to execute on new projects, and future asset
dropdowns into their MLP (SEP), SE presents an attractive value opportunity. The team currently has a $37
price target on the name, implying ~30% upside.
Headwinds
Oil prices are down ~60% since early-to-mid 2014 highs, largely due to sustained OPEC production contributing
to supply side issues and overcapacity despite relatively stable demand. With the recent nuclear accord with
Iran and little transparency into OPEC production increasing supply side issues, it is likely that oil prices will
remain low for the foreseeable future, impacting cash flow generation and capital expenditure growth in the US.
Additionally, slowing growth in emerging markets may hinder demand for oil and natural gas products.
Tailwinds
Valuations are low in many subsectors due to the large energy sell-off, which we believe is justified and
representative of the risks that are present. We believe that there are value based opportunities on a more long-
term basis for those firms that are able to weather short-to-medium term volatility, have strong balance sheets,
and high quality reserve bases.
Sector Outlook
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
12/31/2014 3/31/2015 6/30/2015 9/30/2015
AIG ENERGY XLE S&P
-60%
-40%
-20%
0%
20%
40%
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
1/4/1994 1/4/1999 1/4/2004 1/4/2009 1/4/2014
Discount/Premium to S&P Energy P/E S&P P/E

Financial Institutions | Neutral
Sector Leader | Eric Murray
Sector Analyst | Connor Leppzer
Sector Analyst | Courtney Debus
Strategy
As more clarity surrounds the timing of an interest rate hike, our team plans to tap into spaces expected to react
positively to Fed monetary policy changes - primarily commercial banking. While increasing market volatility has
created a difficult environment for private equity firms and decreasing premiums have caused margin pressures
for insurance companies, we plan to remain relatively neutral on both spaces. Lastly, we plan to steer away
from traditional asset managers as AUM growth and product innovation of alternatives has contributed to
slowing growth. Overall, we will remain neutral on the sector while leaning towards the more bullish side as
more clarity surrounds the timing and velocity of an interest rate hike.
Top Pick
Capital One (COF): COF is poised to benefit from a rate increase through their commercial loan portfolio (10%
of revenue) while the positive economic environment in the US will contribute to increased consumer spending
and in-turn growth in their credit card segment (~60% of revenue). The team currently has a $93 price target on
the name, implying 14% upside from current levels.
Headwinds
Global growth concerns and heightened regulatory expenses after Wall Street reform in 2010 have created
challenges for the sector. The lack of liquidity in fixed income markets has contributed to top-line deceleration
for financial institutions as trading profits have declined. Lastly, the low interest rate environment has made net
interest margin expansion difficult for many firms.
Tailwinds
Future rate hikes will help to expand net interest margins and in-turn profitability for financial institutions. The
steadily improving US economy will increase consumer spending, savings and investment volumes, and loan
generation. While valuations are above averages since the Great Recession, there has been a divergence
relative to the S&P 500 which we believe exemplifies value opportunities in the space.
Sector Outlook
-10%
-5%
0%
5%
10%
12/31/2014 3/31/2015 6/30/2015 9/30/2015
AIG FIG XLF S&P
-25%
-15%
-5%
5%
15%
25%
10.0 x
12.0 x
14.0 x
16.0 x
18.0 x
20.0 x
1/3/2011 1/3/2012 1/3/2013 1/3/2014 1/3/2015
Discount/Premium to S&P Financials P/E S&P P/E

Healthcare | Overweight
Sector Leader | Jacob Gomez
Sector Analyst | Rebecca Atkinson
Sector Analyst | Steven Frye
Strategy
Healthcare has been one of the best performing sectors over the last few years, resulting in relatively expensive
valuations compared to the average premium/discount to the S&P 500. We believe the space is relatively
healthy as firms have ample cash on their balance sheets to support continued M&A and growth initiatives. Our
team is focusing on finding growth at reasonable valuations in subsectors that we find attractive such as for-
profit hospitals, medical devices, and pharmaceuticals. We are aiming to be conservative with our
pharmaceutical and biotechnology exposure largely due to high volatility and publicity surrounding drug pricing
that has caused some fear in the market. Our team is very comfortable with our positioning in the healthcare
space, but plans to look for future investment opportunities that are relatively underfollowed by the Street, cheap
on a relative basis and/or trade below the midpoint of their 52 week range, and have a strong balance sheet to
support future M&A growth and R&D spending. In conclusion, we plan to remain overweight on the sector.
Top Pick
Becton Dickinson (BDX): BDX has consistently executed on organic and inorganic growth opportunities since
our initial purchase of the security. We believe the recent CareFusion acquisition presents long term upside
through an expanding and diverse product portfolio, increased market share, cash flow synergies, and vertical
integration. Our team has a $172 dollar price target on the name, implying 20% upside from current levels.
Headwinds
The “tug-of-war” tension between cost-cutting and value-added products for patients, versus volume based
business models, has created complexities for healthcare firms. Valuations are relatively high as the sector
currently trades at a 20.6% premium to the S&P versus the long-term average premium of 8.6%. Lastly,
publicity surrounding drug pricing has created some fear in pharmaceutical and biotechnology space.
Tailwinds
Healthcare spending is projected to increase from $7.2T to 9.3T in 2019, driven by the aging and growing
population, rising prevalence of chronic disease, and emerging market expansion. Obama healthcare reform
has helped to increase broad based insurance coverage across the US, which may help to drive growth.
Sector Outlook
-60%
-40%
-20%
0%
20%
40%
60%
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
40.0 x
1/4/1994 1/4/1999 1/4/2004 1/4/2009 1/4/2014
Discount to S&P HC P/E S&P P/E
-10%
-5%
0%
5%
10%
15%
20%
12/31/2014 3/31/2015 6/30/2015 9/30/2015
AIG HC XLV S&P

Industrials | Neutral
Sector Leader | William Taveras
Sector Analyst | Jacob Lahoux
Sector Analyst | Jessica Selensky
Strategy
Industrials have been underperforming the S&P 500 year to date, largely due to headwinds that have
materialized such as increasing FX risk, a slowdown in durable goods spending and manufacturing, and
exposure to capital expenditure cuts. Our team is looking to implement a conservative and thorough due
diligence process on future investments that offer exposure to high-growth end markets, limited international
exposure, and a healthy financial state that supports defense against near-term volatility. Our team is optimistic
on the aerospace/defense industries which have substantial back-logs and exposure to government spending
increases. Throughout the remainder of the year, we plan to maintain a neutral weighting on the space and
remain relatively conservative until current headwinds subside.
Top Pick
General Electric (GE): We believe that the divestiture of the GE Capital business unit and a focus on de-
leveraging, operational restructuring, and utilization of core industrial strengths justify GE trading at higher
multiples than current levels. Our team has a $36 price target on the name, implying ~20% upside.
Headwinds
Tepid recovery in Europe and other international regions may present business risks going forward; industrial
companies may need to rely on North America for growth in 2015. FX fluctuations and declines in energy/utility
capital spending are likely to diminish sales. While commodity input costs have declined, the subsequent cost
reduction may be passed on to consumers and in-turn impact future top-line growth. Commercial machinery and
equipment producers may face pressure as durable goods volumes and capital spending decelerates.
Tailwinds
Declining valuations and increases in business confidence may present opportunistic capital allocation
strategies for firms looking to put cash to work through consolidation. Reduced freight & shipping costs from
lower fuel prices may be a catalyst for industrial firms exposed to high transportation cost business models.
Near term headwinds may cause devaluations in the space and in-turn future buying opportunities.
Sector Outlook
-15%
-10%
-5%
0%
5%
10%
12/31/2014 3/31/2015 6/30/2015 9/30/2015
AIG IND XLI S&P
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
40.0 x
45.0 x
1/4/1994 1/4/1999 1/4/2004 1/4/2009 1/4/2014
Discount to S&P Industrials P/E S&P P/E

Technology | Neutral
Sector Leader | Jason Michonski
Sector Analyst | Garret Malagodi
Sector Analyst | Connor Whelan
Strategy
Technology valuations have been relatively in line with the S&P 500, yet slightly above long-term averages. This
is largely driven by significant product innovation and large inorganic growth initiatives by technology firms as
represented by large increases in M&A; potentially justifying higher multiples. Our team is looking to reduce
exposure to emerging markets, more specifically China, and shy away from the very saturated hardware and
semiconductor spaces. Going forward, the team is seeking opportunities in software, cybersecurity, cloud, and
data storage in companies where valuations align with our investment philosophy. With a neutral weighting on
the sector and relatively little exposure to technology, our team is currently screening for buying opportunities in
the coming weeks.
Top Pick
Apple (AAPL): With a focus on product pipeline diversification, the launch and execution of new product
offerings, and one of the healthiest balance sheets in the industry, we are confident that there is still upside
given their low valuations. Our team currently has a $140 price target on the name, implying ~19% upside.
Headwinds
FX risks, a slowing global economy, and weakening demand in emerging markets presents headwinds for the
space going forward. The shifting demand towards cloud and software relative to semiconductors and hardware
is causing a pullback in the subsectors. High growth opportunities such as cloud, cyber security, and data
storage are trading at stretched valuations, creating difficulty in finding value investments.
Tailwinds
The positive demand trends in high growth spaces such as big data, software, and cloud are creating attractive
opportunities, although valuations in these high growth areas are relatively high. Growth in the sector and ample
cash balances are bolstering the active M&A environment which may be a driver of future growth. When current
valuations are adjusted for growth, the sector appears to be relatively healthy and may present upside
opportunities throughout the remainder of the year.
Sector Outlook
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12/31/2014 3/31/2015 6/30/2015 9/30/2015
AIG TECH XLK S&P
-5%
0%
5%
10%
15%
20%
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
1/2/2009 1/2/2011 1/2/2013 1/2/2015
Discount/Premium to S&P TECH P/E S&P P/E

Telecommunications | Underweight
Sector Leader | Charlie DeMarco
Sector Analyst | Nick Muldrow
Sector Analyst | Aaron LeLacheur
Strategy
An intensifying competitive environment has impacted product pricing and compressed margins across the
sector. Since the start of 2014, the telecommunications space has traded sideways and valuations have
become depressed as investors have been hesitant to deploy new capital into these mature markets. With
negative sentiment on the Street, our team will utilize a conservative due-diligence process with the goal of
capitalizing on growth opportunities, such as wireless infrastructure. Although competitive pressures are
present, we believe there are pockets of value in companies with strong balance sheets and dynamic business
models that are able to meet changing consumer demands. With the headwinds that are present, our team
plans to remain underweight on the sector until more positive developments in the space materialize.
Top Pick
Ubiquiti Networks (UBNT): UBNT’s high margin business model will allow for future growth as their high-
quality WISP, WLAN and Wi-Fi products gain traction in largely untapped emerging markets. UBNT’s ability to
generate free cash flow coupled with their significant cash balance on hand allows for future reinvestment
opportunities and an ability to return capital to shareholders. We believe that the recent Street downgrades are
not justified and our team has a $40 price target on the name implying ~36% upside.
Headwinds
While margins are compressed in the sector and capital expenditures increase by companies seeking to
improve and expand networks, free cash flow growth may be pressured for the foreseeable future. As the debt
balances of the telecommunications are traditionally very high, leverage issues may become present as free
cash flow growth decelerates. Lastly, the valuation divergence relative to the S&P 500 is representative of the
risks present in the space right now and may represent a value trap.
Tailwinds
Demand for telecommunication infrastructure and services is increasing as communication and media devices
move to the wireless space, although some of this shift will cannibalize growth in fixed-line revenues. In select
subsectors, valuations are attractive and may deserve to trade at higher multiples.
Sector Outlook
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12/31/2014 3/31/2015 6/30/2015 9/30/2015
AIG TEL XTL S&P
-50%
-30%
-10%
10%
30%
50%
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
40.0 x
1/3/1994 1/3/1999 1/3/2004 1/3/2009 1/3/2014
Discount/Premium to S&P Telecomm P/E S&P P/E

Utilities | Neutral
Sector Leader | Nick Bagley
Sector Analyst | George Pantelis
Sector Analyst | Robert Doretti
Strategy
With the low interest rate environment as a result of Fed monetary policy, investors flooded the utilities sector in
order to capitalize on high yields in the sector. Since the end of 2014, we have seen a pullback in the sector as
there has been more skepticism surrounding the timing of a potential interest rate hike and downside pressures
on power pricing. Taking this into consideration, we plan to remain neutral on the space while positioning
ourselves into securities that will be least affected by tightening monetary policy. Additionally, with the low
commodity price environment and the resulting downside pressure on power pricing, our team is looking to
position the sector towards businesses that will be most positively impacted by rebounding electricity and power
prices. The team is most bullish on water utilities, independent power producers, and utilities infrastructure
companies.
Top Pick
NextEra Energy (NEE): NEE has proved their ability to execute on high growth opportunities yielding significant
cash flow generation through their Florida Power & Light business unit, coupled with an ability to capture upside
in rebounding power prices. Additionally, their YieldCo structure provides the ability to capture a shift in
renewables and generate cash flow tax free, especially with their recent transaction of HEI and expectations to
make future asset dropdowns. Our team has a $124 price target on the name implying ~22% upside.
Headwinds
The volatility in commodity prices has resulted in the depression of power and electricity pricing, impacting top-
line growth for the foreseeable future. As a result of the rally in the sector through mid-2014, valuations remain
above long term averages, despite a recent pullback. Future interest rate hikes may result in further pullbacks
as dividend investors move capital to comparable yielding securities that present less risk.
Tailwinds
The EPA’s MATs ruling will help create a faster paced shift into the renewables space. Additionally, with an
increasing US population yet aging and declining health in utilities infrastructure, capital expenditures and
capacity expansion may help to drive future growth in the space.
Sector Outlook
-15%
-10%
-5%
0%
5%
12/31/2014 3/31/2015 6/30/2015 9/30/2015
AIG UTIL XLU S&P
-65%
-55%
-45%
-35%
-25%
-15%
-5%
5%
15%
0.0 x
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
1/3/1994 1/3/1999 1/3/2004 1/3/2009 1/3/2014
Discount to S&P Utilities P/E S&P P/E

Sector Outlook
Fixed Income | Underweight
Corporates Sector Leader | Alex Febonio
Loans Sector Leader | Galen Hand
Sector Analyst | Kelsey Ulaskiewicz
Sector Analyst | Matt Protzmann
Sector Analyst | Patrick Hammond
Strategy
With a modestly growing US economy and the Federal Reserve being increasingly dependent on economic
data, the tightening of monetary policy has been delayed creating a significant asset bubble in the fixed income
markets. With a highly probable interest rate hike as early as December 2015 or early 2016, our team is looking
to tap into asset classes with the least price sensitivity to changes in interest rates. We therefor are
implementing a risk-off strategy that is sufficiently diversified into the spaces least impacted by rate movements.
Our current ETFs track short duration investment-grade corporate debt, hedged high-yield, and leveraged loans.
In addition, we own a mutual fund employing a Absolute Return Global Macro strategy that hedges exposures
through short positions in certain currencies and emerging market sovereign debt. Upon more clarity
surrounding the timing and velocity of interest rate hikes by the Fed, the Fixed Income team plans to reevaluate
their strategy and potentially take a more risk-on approach.
Top Pick
Hedged High-Yield (HYGH): Through this ETF, we are able to capture higher yielding fixed income securities
rated on the upper-end of the junk bond spectrum, while effectively having zero duration as a result of hedging
practices through short positions in Treasury futures.
Leveraged Loans (BKLN): With this ETF, we are looking to gain exposure to high-yield senior secured loans
that are priced based on short term floating rates, in-turn limiting the interest rate risk present in our portfolio.
Headwinds
Fed monetary policy has resulted in a fixed income bubble that is arguably the most significant in market history.
The low commodity price environment has created increased default risk in the high-yield space.
Tailwinds
Low-duration, hedged high yield, and floating rate loan products are expected to perform well in a rising rate
environment, allowing for sustainable sources of income in our portfolio.
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
3/10/2015 5/10/2015 7/10/2015 9/10/2015
AIG Fixed Income Barclays AGG BAML HY Index
0
1
2
3
4
5
6
7
8
9
10
1/2/1990 1/2/1995 1/2/2000 1/2/2005 1/2/2010 1/2/2015
10YR US Yield Fed Funds Target

How you can contribute
The Peter T. Paul College of Business and Economics has developed into one of the premier
business schools in the country. As Paul or WSBE Alumni, UNH Alumni, or members of the investing
community, you are encouraged to contribute to the Atkins Investment Group so that it may continue
to grow and provide students the knowledge and experience necessary to succeed in the highly
competitive professional arena.
By improving the quality of education through practical application, experiential learning, and
mentorship, augmented by continued involvement from supporters of our Group, Atkins will allow
students to attain valuable career opportunities.
If interested in discussing opportunities for involvement, please contact our Vice President of External
Relations as well as our Academic Advisors Ahmad Etebari and Steve Ciccone. Please find the
contact information listed below.
Ways to contribute
► Contribute as a guest speaker
► Offer a mentorship program
► Offer internships or full time jobs to Atkins students
► Donate money or resources to the Group
Your contributions can make a significant impact on the future landscape of the Atkins Investment
Group and the experience of our undergraduate students.
For interested students
Contact our Director of Recruiting, Nicholas Bagley at nlb2009@unh.edu for more information on the
Group, the work we do, and ways to become involved.
How to Get Involved
Peter T. Paul College of Business and Economics
10 Garrison Avenue
Durham, NH 03824
Tel: 603-862-1981
Ahmad Etebari: Ahmad.etebari@unh.edu
Stephen Ciccone: Stephen.Ciccone@unh.edu
Alex Febonio: Ajj686@wildcats.unh.edu

Atkins Investment Group Mid-Semester Review

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