The Blue Hen Investment Club had a successful 2014. It saw record interest from students and optimized its recruitment process. It implemented new initiatives like performance evaluations, equity research reports, and financial modeling workshops that improved members' skills. The portfolio performed well against the S&P 500 in 2014, with a return of 13.37% versus 13.69% for the index. Top performing sectors were Health Care, Information Technology, Industrials & Materials, and Financials. The club also emphasized value stocks and reduced holdings to focus on fewer companies. Notable holdings included Symantec, Computer Task Group, and Premiere Global Services.

1. 2014 ANNUAL REPORT
Blue Hen
Investment Club
1/1/2014 – 12/31/2014

2. TABLE OF CONTENTS
New Developments 3
Portfolio Performance 6
Investment Highlights 9
Future Initiatives 12
2

3. Recruitment
This year, the Blue Hen Investment Club saw a record amount of interest from the student body. In order to manage this
high level of interest, several aspects of the recruitment process were optimized.
Our recruitment strategy is to maximize both the quality and quantity of new analysts. This process starts with FINC167,
a 1-credit project based class taught by the Executive Board and Professor Jakotowicz. The class teaches students
interested in the Blue Hen Investment Club the basics of our research process, and how to apply learned content towards
a pitch completed throughout the class.
Several additions to the curriculum were made this year in order to provide a better learning experience. The class now
includes an online accounting boot camp through WallStreetPrep software to bring students less versed in accounting
concepts up to speed. We have added more interactive sessions such as a financial statement analysis case study and the
opportunity for students to present their projects to Blue Hen Investment Club leadership. The class now also includes an
introduction to modeling. With these additions, we have seen new analysts join the investment club with a much stronger
knowledge base, and the ability to more quickly add impact in their sector.
At the beginning of each semester, an interest meeting is held to tell the student body about the Blue Hen Investment
Club and open up applications. While we prefer applicants who are graduates of FINC167, any student may apply. The
application consists of a resume, cover letter, and short essay. The Executive Board and Sector Heads will review the
applications and send out interview invites.
Interviews for analyst positions are more rigorous now as well. Much of the interview is case based, where we will ask the
interviewee to think through industry, qualitative, and quantitative analysis problems. The case interview also allows us
to see how well an applicant can present his or her ideas. The interview also includes a detailed discussion of two of the
applicant’s previous experiences that demonstrate work ethic and quick learning.
Once interviews are completed, offers to join the Blue Hen Investment Club are made. We view this year’s analysts as the
best the club has ever had. We are continually impressed with their performance.
Financial Modeling
We made it a goal this year for each member to be proficient in financial modeling, including freshman. To achieve this
goal, we held several workshops each semester to teach intrinsic valuation concepts and the process for building models
from financial statements. We also have these sessions recorded so anyone can review them online.
As a result, analysts are able to use their models to better evaluate whether or not a security is overvalued, as well as set
target prices for holdings. Furthermore, these modeling skills have inspired analysts to reach further and add unique model
drivers on a situational basis as well as create sector-specific models.
New Developments
3

4. Performance Evaluations
This year was the first in which we also implemented performance evaluations for members. Near the end of each
semester, Sector Heads will submit evaluations for their analysts discussing a number of factors including motivation,
quality of research, and ability to overcome learning curves. These evaluations are then communicated directly to the
analysts by the Sector Head. This process has helped analysts see areas in which they are performing well and areas that
they can improve in the future. These evaluations also allow the Executive Board to see how analysts are performing and
identify Sector Head candidates for the following year.
Each analyst also submits an evaluation for their sector head, discussing their ability to teach investment concepts and
efficiently manage the sector. The evaluations are then compiled by the Executive Board and communicated to the Sector
Head. The evaluations help us make sure each analyst is receiving the development opportunities they need. They also
help the sector see what aspects they are doing well in, and additional ways they can inspire his or her analysts.
Equity Research
Historically, the Blue Hen Investment Club has struggled with the transitory period between academic years. Each year,
the organization loses a majority of senior leaders to graduation and with them, lose investment ideas and themes. This
resulted in the Club taking a more reactionary approach to holdings and would only evaluate them if there were an issue
as opposed to a proactive management.
To combat this, a large initiative we implemented this year was equity research reports (ERR) for analysts. These reports
are comprehensive sell side initiation reports that are created by each analyst. These reports are conducted on existing
holdings as well as target holdings to determine investment rationale and price targets. These reports contain rigorous
qualitative, quantitative and industry research on their subject companies. This analysis is translated into a valuation
model and helps complement the assumptions and value drivers for the model.
Additionally, analysts have not been fully credited for the amount of analysis conducted on investment ideas. If a pitch is
formalized, then the analysis is documented in a presentation and archived on the intranet. However, through the vetting
process, more than 80% of investment ideas (including quality analysis) are thrown out due to unfavorable valuation
metrics. In order to preserve analysis, the Executive Board has established the equity research report. Now, analysts are
encouraged to document all of their research despite an unfavorable valuation as sectors can look back at ERR’s.
Initially the reports were created by sector analysts to determine the quality of our current holdings and make changes as
necessary. This also helped us determine which holdings to liquidate, consistent with our goal of reducing the number of
holdings and increasing concentration. Upon completion, sector analysts completed research reports on an ongoing basis
within their coverage areas to identify new investment ideas.
The Fund makes extensive use of FactSet and all members have an individual access license for their personal devices.
Thus, equity research reports are stored using FactSet’s new Internal Research Note platform, and we are proud to say
that we are the first university investment fund to utilize the platform. Furthermore, analysts can post earnings previews,
earnings updates, news reflections, and weekly industry news. This information is logged over time, leading to more
transparency during analyst reviews. In addition, analysts can post price targets, allowing members to see the best and
worst performing analysts in terms of stock picks. This data transparency opens up new possibilities for member
development and coaching opportunities. This online platform stores, files and classifies a vast amount of information on
both current and potential holdings. Since the platform is available to all fund members, it increases quality of research
and allows analysts to showcase their work.
4

5. Market Differentiation
This year, the Blue Hen Investment Club made an active effort to further differentiate itself from the S&P 500 index in
order to facilitate the generation of positive alpha. This process began with a consolidation of holdings. This year, the fund
reduced the number of holdings from 45 to 37 by increasing concentration in companies with bullish outlooks. In addition,
we more aggressively pursued active weighting at the sector, subsector, and individual security level.
Furthermore, the BHIC has also become more receptive of investment ideas outside the S&P 500 index members that the
fund has traditionally focused on. The fund is now more welcome to purchasing companies of smaller market capitalization
as long as they are still consistent with our investment philosophy.
5

6. Value vs. Growth Trend
Over the past two calendar years the club has worked to move the fund back to a value position to reflect the core strategy
of identifying undervalued securities. The holdings over fall semester 2014 in particular moved the fund back in line with
the Russell 1000 Value Index. This movement was strongly influenced by the Executive Board’s push to decrease the
amount of positions the club held from 46 to 37, which enhanced the quality of analyst coverage within the club.
Monthly Returns vs. S&P 500
The student-managed fund performed particularly well over the summer months versus the S&P 500 benchmark,
capturing a 7.1% return when the market returned 4.7% from June through August. Overall, the fund outperformed the
market in 6 out of 12 months in 2014 with a total annualized return of 13.37% versus the benchmark’s return of 13.69%.
The annualized standard deviation of the fund was slightly higher than the benchmark, as the fund decreased the amount
of holdings and increased the active weights in certain sectors and individual positions deemed undervalued.
Portfolio Performance
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14
Russell 1000 Value Index Russell 1000 Growth Index
Value
Growth
-3.9%
4.0%
1.0% 1.0%
1.9%
2.7%
-0.3%
4.7%
-2.1%
1.8%
3.2%
-1.0%
-3.5%
4.6%
0.8% 0.7%
2.4%
2.1%
-1.4%
4.0%
-1.4%
2.4% 2.7%
-0.3%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
January February March April May June July August September October November December
Blue Hen Investment Club S&P 500
6

7. Risk, Return, Sharpe Ratio, and Alpha
The additional standard deviation led to a Sharpe ratio below the S&P 500 and a slightly negative alpha at -0.04 as the
fund made the move to increase active weights in certain positions. However, both of these measurements of portfolio
performance placed the Blue Hen Investment Club just below the 75th
percentile against competitor funds. The Executive
Board feels that this move toward larger active allocations to certain sectors that are well positioned in the
macroeconomic environment reflects a positive change in the club. In the long run this strategy should lead to a better
learning environment through higher quality analyst coverage. It should also lead to higher returns and favorable portfolio
metrics, such as positive alpha, as the fund begins to diverge from the benchmark in certain well-positioned sectors.
Sector Active Weights
For calendar year 2014, the fund chose Financials, Consumer Discretionary, and Health Care to hold the highest active
weights relative to the S&P 500. The active weight in Financials and Consumer Discretionary matched the fund’s
perspective that the economy was continuing in an expansionary phase after a low point. The looming effects of higher
interest rates caused the fund to underweight Industrials and Energy & Utilities.
13.37%
8.43%
13.69%
7.91%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Return Standard Deviation
Blue Hen Investment Club S&P 500
0.58%
0.37%
-0.95%
1.08%
1.73%
-2.05%
-1.93%
1.17%
-2.50% -2.00% -1.50% -1.00% -0.50% 0.00% 0.50% 1.00% 1.50% 2.00%
Cash
IT & Telecom
Industrials & Materials
Health Care
Financials
Energy & Utilities
Consumer Staples
Consumer Discretionary
-0.4
-0.3
-0.2
-0.1
0
0.1
0.2
Alpha
BHIC
Alpha= -0.05
0.8
1
1.2
1.4
1.6
1.8
2
Sharpe Ratio
BHIC
Sharpe=1.58
7

8. Sector Performance vs. S&P 500
Top performing sectors versus the market were Health Care, Information Technology, Industrials & Materials, and
Financials. Health Care and Information Technology have been top performing sectors for two years in a row. Consumer
Staples did not perform well over calendar year 2014, losing 0.32% while the market gained 15.98%. When analyzing the
Consumer Staples issue closer, the Executive Board took note that the current Consumer Staples team had done well,
matching the market over Fall Semester from September through December. However, the past team on Consumer
Staples did not perform well, diverging from the market during March through July. The Executive Board believes new
recruitment strategies and learning opportunities, which have been implemented since the beginning of the Fall Semester
should decrease the risk of a severely lagging sector in future years.
9.5%
-0.3%
8.5%
16.9%
32.3%
26.9%
25.6%
9.7%
16.0%
21.1%
15.3%
25.4%
16.7%
22.7%
-5% 0% 5% 10% 15% 20% 25% 30% 35%
Consumer Discretionary
Consumer Staples
Energy & Utilities
Financials
Health Care
Industrials & Materials
IT & Telecom
S&P 500 BHIC
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
BHIC Cons. Staples S&P 500 Cons. Staples
8

9. Symantec Corporation (SYMC)
Currently, our largest holding is Symantec Corporation (SYMC), making up 5.48% of our portfolio. Symantec is a technology
firm engaged in corporate cyber-security and storage solutions. The club acquired Symantec in May of 2014, during which
the company traded at $ 20.79. The rationale behind the purchase of this security included our bullish outlook on
corporate security spending, following a number of breaches of companies such as Target. Furthermore, the organization
is refocusing from consumer to corporate market even more, making it more desirable given the fact that there is an
increase need in response to cybersecurity threats. To capture this potential, we increased our position in Symantec in
October of 2014 by 3% when the stock declined to $ 22.00 following a 15% upside from the purchase date. However, we
believe that this was a great opportunity to increase our position given our outlook and our belief that the fundamentals
haven't changed. One year later, Symantec has delivered superior gains, currently trading at $ 24.84.
Computer Task Group (CTG)
A unique initiative this year was the diversification of the BHIC portfolio among companies with a smaller market
capitalization. One of these companies is Computer Task Group (CTG). CTG is a small cap technology firm that conducts
business in the field of system implementations and staffing solutions, primarily in the medical field. We acquired CTG at
$ 11.22 in September of 2014 based on its unique positioning of the firm within the electronic medical records industry, a
market on which we are very bullish. The company has proved to generate strong free cash flows, which have showed
undervaluation in our analysis. While recent headwinds such as the slowdown of government regulation in medical
records, as well as the death of the CEO have shown concern, we believe that the company is poised to grow long term.
20.79
24.84
20.00
21.00
22.00
23.00
24.00
25.00
26.00
27.00
May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15
3% Increase
11.22
7.55
7.00
7.50
8.00
8.50
9.00
9.50
10.00
10.50
11.00
11.50
12.00
Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15
Investment Highlights
9

10. Premiere Global Services (PGI)
Another unique holding that we acquired this year was Premiere Global Services (PGI). PGI is a small cap
telecommunications company that provides conferencing/collaboration services, mostly to corporate clients. Our
investment rationale for PGI is based on our bullish expectations of the growth in conversion rate to Cloud/SaaS services
for teleconferencing technologies and optimism in the positioning of PGI in that specific market. Premiere Global Services
has a strategic goal of being the one-stop-shop for online collaboration & communication.
SunEdison (SUNE)
In terms of our shortest holding, we held SunEdison (SUNE) for a total of one week (7 days). SunEdison is an Energy
company that produces semiconductors and solar technology. Our valuations have shown great potential for SunEdison,
based on its reputation in creating the most efficient solar panels in the industry, as well as strong growth in solar energy
project demand. SuneEdison has also increased its presence in emerging markets through projects such as yieldco. Despite
the club's positive long term outlook on SUNE, we only held the position for one week due to its explosive appreciation in
price. Although we believe that the company is fundamentally sound, it reached the higher range of our target price and
thus we felt as though it was an excellent exit point to capitalize on the gains.
9.33
10.47
9.00
9.20
9.40
9.60
9.80
10.00
10.20
10.40
10.60
10.80
11.00
27-Mar-15 3-Apr-15 10-Apr-15 17-Apr-15 24-Apr-15
16.93
22.86
16.00
17.00
18.00
19.00
20.00
21.00
22.00
23.00
24.00
14-Nov-14 15-Nov-14 16-Nov-14 17-Nov-14 18-Nov-14 19-Nov-14 20-Nov-14 21-Nov-14
10

11. Kroger Co. (KR)
A big focus for the Consumer Staples team this year was restructuring and recovering the sector, and one of the
investments responsible for the recovery this year was Kroger Co (KR). Kroger is an operator of supermarkets and
convenience stores across all the regions in the US except the Northeast. The fund liked this investment due to its strong
corporate strategy and undervaluation. The company focuses on US ex-Northeast for competitive reasons, allowing them
to maintain higher margins. The company also has several promising investments in advanced technology in areas such as
checkout and customer data. Our investment saw a steady appreciation of 28% across 4 months, after which the sector
thought it was appropriate to exit the investment.
53.92
69.05
50.00
52.50
55.00
57.50
60.00
62.50
65.00
67.50
70.00
72.50
75.00
Oct-14 Nov-14 Dec-14 Jan-15
11

12. Options Trading
To further the educational experience for members, the fund plans on implementing and options trading strategy to
complement our holdings. We will have a dedicated team of derivatives analysts to implement options for derivative
hedging to protect against downside movement of individual securities and the broad market. Currently, the strategies
will be strictly limited to covered calls and protective puts.
Industry Reports
In some sectors such as energy and healthcare, the learning curve for analysts is steep. Some sectors have decided to
implement industry research reports to alleviate this. These reports allow for future analysts to learn industry specifics
quickly. Additionally, these reports will give all voting members a sector foundation on industry specifics that will boost
the knowledge of the fund during voting.
Future Initiatives
12