This document is a stock pitch presentation for Nalco (NLC). It summarizes that:
1) Nalco is a specialty chemical company providing water treatment and air quality solutions to industries. It has a large market share across its segments but is undervalued relative to peers.
2) The new CEO is focused on growth in emerging markets and new innovative products to drive multiple expansion.
3) Nalco has strong earnings power and cash flow generation despite its large debt, and analysts underestimate its upside from recurring business, new products, and cost savings.
This document provides a stock pitch presentation for Genworth MI Canada (MIC). Key points:
- MIC is the largest private residential mortgage insurer in Canada with a 25% market share.
- The investment thesis is that consensus estimates for 2010 earnings are too conservative and losses will be lower than expected.
- A bottoms-up analysis estimates 2010 claims losses around $190 million Canadian, lower than consensus of $255 million.
- A decision tree valuation analysis values MIC at $36.75 per share, implying 21% upside from the current price of $27.
Suncor Energy Inc. is an integrated energy company with over 40 years of oil sands experience in Canada and internationally. The presentation recommends a long position in Suncor, arguing it is undervalued with a price target of $43 per share based on its strong correlation with the SPTSEN energy index, strategic acquisitions, and opportunities from growing global energy demand and management's visionary leadership. Key risks include unexpected downtime, international uncertainties, and environmental issues.
Winfield Refuse Management Inc.Raising Debt vs. Equitysubhash kalal
Winfield Refuse Management is considering financing options for a $125M acquisition of Mott-Pliese Integrated Solutions. The options considered are: 1) Debt with fixed principal repayments, 2) Debt only, 3) Equity, 4) Debt and equity. Debt only has the lowest NPV cost of financing, while equity has the highest. Debt options provide the highest expected earnings per share and return on equity under likely earnings scenarios. Monte Carlo simulations show Winfield can meet debt obligations and dividend payments under varying earnings outcomes for all financing alternatives. Winfield should finance through issuing bonds with no principal repayments.
Winfield Refuse Management is considering financing options to acquire Mott-Pliese Integrated Solutions for $125 million. The options considered are: debt with fixed principal repayments, debt, equity, and a combination of debt and equity.
Debt with fixed principal repayments of $6.25 million annually over 15 years has the lowest net present value of financing costs. It also provides the highest expected earnings per share and return on equity under likely earnings scenarios. Monte Carlo simulations show Winfield can meet debt obligations and maintain strong interest, debt, and dividend coverage ratios under varying earnings outcomes.
Therefore, the recommendation is for Winfield to finance the acquisition through the issuance of bonds with no principal repayments
The Ontario Teachers' Pension Plan annual meeting addressed the economic crisis and its impact on the pension fund. The fund experienced a 18% rate of return loss in 2008, in line with average losses for other large Canadian pension plans. Several strategies were discussed to protect the fund from ongoing recession impacts and deploy strategies with appropriate risk levels, including reducing equity exposure from 45% to 40% and shifting to more conservative fixed income investments. The meeting also discussed resolving a 2008 funding shortfall and ongoing efforts to pay pensions over the long term despite challenges from low interest rates and increased life expectancies.
The document summarizes Bank of America's operating review and financial results for 2007 and Q1 2008. It discusses factors that contributed to challenges like market dislocations and a weakening economy. While most business lines saw lower profits, consumer and wealth management saw some growth. The CFO notes strategies to refocus businesses and adjust underwriting standards. Asset quality deteriorated with higher provisions and charge-offs. However, the company maintains a strong capital position and liquidity.
The document provides an overview of an LBO transaction including sources and uses of funds, transaction assumptions, operating projections, and financial analysis. Key details include:
- Equity value of $132.9 million, with $74.5 million in new equity financing and $34.8 million in senior debt financing.
- Projected EBITDA of $17.4 million in 2008 growing to $25.9 million by 2013.
- Implied equity IRR ranges from 8.7-28.5% depending on exit multiple assumptions from 2011-2013.
- Goodwill of $47.1 million allocated between intangible assets ($9.4 million) and remaining good
The document is Sempra Energy's 1999 annual report. It summarizes the company's strong financial performance in 1999, exceeding earnings growth targets. However, total shareholder return did not increase. As a result, Sempra Energy is undertaking a strategic realignment to become a leading global energy services company focused on meeting changing customer needs. Key steps include investments in growing domestic and international businesses and a reduced dividend to increase financial flexibility for growth.
This document provides a stock pitch presentation for Genworth MI Canada (MIC). Key points:
- MIC is the largest private residential mortgage insurer in Canada with a 25% market share.
- The investment thesis is that consensus estimates for 2010 earnings are too conservative and losses will be lower than expected.
- A bottoms-up analysis estimates 2010 claims losses around $190 million Canadian, lower than consensus of $255 million.
- A decision tree valuation analysis values MIC at $36.75 per share, implying 21% upside from the current price of $27.
Suncor Energy Inc. is an integrated energy company with over 40 years of oil sands experience in Canada and internationally. The presentation recommends a long position in Suncor, arguing it is undervalued with a price target of $43 per share based on its strong correlation with the SPTSEN energy index, strategic acquisitions, and opportunities from growing global energy demand and management's visionary leadership. Key risks include unexpected downtime, international uncertainties, and environmental issues.
Winfield Refuse Management Inc.Raising Debt vs. Equitysubhash kalal
Winfield Refuse Management is considering financing options for a $125M acquisition of Mott-Pliese Integrated Solutions. The options considered are: 1) Debt with fixed principal repayments, 2) Debt only, 3) Equity, 4) Debt and equity. Debt only has the lowest NPV cost of financing, while equity has the highest. Debt options provide the highest expected earnings per share and return on equity under likely earnings scenarios. Monte Carlo simulations show Winfield can meet debt obligations and dividend payments under varying earnings outcomes for all financing alternatives. Winfield should finance through issuing bonds with no principal repayments.
Winfield Refuse Management is considering financing options to acquire Mott-Pliese Integrated Solutions for $125 million. The options considered are: debt with fixed principal repayments, debt, equity, and a combination of debt and equity.
Debt with fixed principal repayments of $6.25 million annually over 15 years has the lowest net present value of financing costs. It also provides the highest expected earnings per share and return on equity under likely earnings scenarios. Monte Carlo simulations show Winfield can meet debt obligations and maintain strong interest, debt, and dividend coverage ratios under varying earnings outcomes.
Therefore, the recommendation is for Winfield to finance the acquisition through the issuance of bonds with no principal repayments
The Ontario Teachers' Pension Plan annual meeting addressed the economic crisis and its impact on the pension fund. The fund experienced a 18% rate of return loss in 2008, in line with average losses for other large Canadian pension plans. Several strategies were discussed to protect the fund from ongoing recession impacts and deploy strategies with appropriate risk levels, including reducing equity exposure from 45% to 40% and shifting to more conservative fixed income investments. The meeting also discussed resolving a 2008 funding shortfall and ongoing efforts to pay pensions over the long term despite challenges from low interest rates and increased life expectancies.
The document summarizes Bank of America's operating review and financial results for 2007 and Q1 2008. It discusses factors that contributed to challenges like market dislocations and a weakening economy. While most business lines saw lower profits, consumer and wealth management saw some growth. The CFO notes strategies to refocus businesses and adjust underwriting standards. Asset quality deteriorated with higher provisions and charge-offs. However, the company maintains a strong capital position and liquidity.
The document provides an overview of an LBO transaction including sources and uses of funds, transaction assumptions, operating projections, and financial analysis. Key details include:
- Equity value of $132.9 million, with $74.5 million in new equity financing and $34.8 million in senior debt financing.
- Projected EBITDA of $17.4 million in 2008 growing to $25.9 million by 2013.
- Implied equity IRR ranges from 8.7-28.5% depending on exit multiple assumptions from 2011-2013.
- Goodwill of $47.1 million allocated between intangible assets ($9.4 million) and remaining good
The document is Sempra Energy's 1999 annual report. It summarizes the company's strong financial performance in 1999, exceeding earnings growth targets. However, total shareholder return did not increase. As a result, Sempra Energy is undertaking a strategic realignment to become a leading global energy services company focused on meeting changing customer needs. Key steps include investments in growing domestic and international businesses and a reduced dividend to increase financial flexibility for growth.
Realty Income is a real estate investment trust that owns commercial properties and leases them to retailers on long-term net leases. It owns over 2300 properties across 49 states with a focus on retail properties leased to tenants in industries that provide necessities. While its financials have weakened due to the economic downturn, it maintains a strong portfolio occupancy rate and has access to capital to acquire more properties when opportunities arise. However, risks include a potential disconnect between dividends and earnings growth and retail tenant defaults increasing due to the recession.
This document summarizes an investor presentation by Xcel Energy on its business operations and financial outlook. It discusses Xcel Energy's integrated utility operations, positive cash flow generation, plans to divest its stake in NRG Energy through bankruptcy proceedings, financial guidance for 2003 including earnings per share, and capital expenditure plans. The presentation also provides comparisons of Xcel Energy's operating metrics to industry peers.
Fifth Third Bancorp reported third quarter 2007 earnings of $376 million, or $0.71 per diluted share. Net interest income increased 2% sequentially and 6% year-over-year. Average loans grew 2% sequentially and 6% year-over-year. Noninterest income grew 2% sequentially and 9% year-over-year, driven by increases in electronic payment processing, service charges on deposits, and corporate banking revenue. Credit quality remained challenging with provision for loan and lease losses up 14% sequentially.
This document provides a summary from Dick Kelly, Chairman and CEO of Xcel Energy, at the Edison Electric Institute Financial Conference in November 2006. It discusses Xcel Energy's strategy of building its core utility business through meeting customer needs, environmental leadership, and regulatory and legislative accomplishments. Key points include delivering competitively priced and reliable energy, leading in renewables and emissions reductions, and significant investment opportunities through 2020 to support growth. Earnings guidance of $1.25-1.35 per share is provided for 2006 and $1.35-1.45 for 2007.
The Progressive Corporation reported its first quarterly loss since 2000 in its third quarter 2008 report. Progressive was impacted by market turmoil related to the mortgage and credit crises. Progressive had recognized losses on its investment portfolio due to declines in the stock market. However, the company's underlying insurance operations remained strong, with continued growth in policies in force and high customer retention rates.
Kaydon Corp. is rated a "Buy" with a price target of $30.85. Kaydon designs and manufactures custom-engineered bearings and other products. It has benefited from growth in the wind power industry, which now represents about 20% of sales. However, Kaydon faces cyclical risks from its industrial end markets declining. It also relies on acquisitions for growth, which carry integration risks. Government subsidies that support the wind industry could also be at risk if not extended. Overall, Kaydon is well-positioned in stable industries like defense, but broader economic weakness and policy changes present challenges.
1) The document discusses Bank of America's enterprise risk management strategies and capabilities. It highlights how the bank manages various types of risk, including credit, market, and operational risk across its consumer and commercial businesses.
2) Key strengths that help the bank manage risk include its breadth of client access, industry insights, and integrated risk management structure.
3) The bank has improved its risk profile by rebalancing its commercial credit portfolio and enhancing risk monitoring tools.
Danaher Corporation released supplemental financial information regarding its debt to total capital and net debt to total capital ratios as of July 1, 2005 and December 31, 2004. As of July 1, 2005, Danaher Corporation's debt to total capital ratio was 21.3% and its net debt to total capital ratio was 8.1%, representing decreases from December 31, 2004 ratios of 22.6% and 12.4% respectively. These ratios provide useful information to investors regarding the company's debt leverage and management uses them to evaluate leverage over time to determine additional borrowing capacity.
Government intervention hurts investors. As the government focuses on slowing credit growth, it is making it tougher for certain types of investors and borrowers to qualify for financing. Changes to insured mortgage rules have lowered amortization periods, reduced refinancing limits, and tightened debt servicing ratios. Regulators have also imposed new rules that reduce HELOC amounts and require reasonable income verification for stated income borrowers. These changes are restricting the money supply and access to credit for rental portfolios, self-employed individuals, and higher-ratio mortgages.
el paso C0A209DE-4313-4A81-8B00-54550DEAC9E8_Barclays_Fixed_Income_032509finance49
El Paso Corporation provides natural gas and related energy products. It has raised its liquidity to $3.3 billion and reduced capital spending thoughtfully in response to market challenges. The company has set 2009 financial targets including EPS of $0.85-1.05 and EBIT of $2.0-2.3 billion. It has a large pipeline backlog that is expected to generate $1.2 billion in incremental EBITDA. El Paso also has significant natural gas and oil reserves and is focusing its $0.9-1.3 billion capital budget on lower-risk exploration and production programs.
Global ACV down slightly for the year. Number of mega relationship contracts up for 2012, lifting acv when overall contract numbers were down. BPO expanded on several large deals while ITO performance was off for 2012. Asia Pacific surged in 2012 while EMEA struggled on a weak first half. Guarded optimism for 2013 with a possible slowdown in the second quarter.
This document summarizes Midwest investor meetings held by Xcel Energy in May and June 2005. It outlines Xcel's low-risk business strategy of investing in regulated utility assets to earn an authorized return on equity. Key points include Xcel operating as the 4th largest US electric and gas utility, growth opportunities through infrastructure investments, regulatory filings, and a total return objective of 7-9% per year through earnings growth and dividends.
This document outlines Xcel Energy's low-risk business strategy of investing in regulated utility assets to earn their authorized rate of return. Key points include:
- Xcel Energy aims for a total annual return of 7-9% through a 5% dividend yield and 2-4% earnings growth.
- Nearly 100% of income comes from regulated utility operations in 8 states, diversifying regulatory risk.
- Capital expenditure forecasts through 2009 will increase rate base and allow earning higher returns on equity.
- Regulatory initiatives are planned in various states from 2005-2007 to obtain rate increases.
xcel energy BAC_Presentation_112007_Finalfinance26
Ben Fowke, Vice President and CFO of Xcel Energy, discusses the company's strategy to achieve financial success through environmental leadership. Xcel aims to stabilize or reduce carbon emissions from electricity by 2020 through renewable energy, energy efficiency, upgrading plants, and evaluating carbon capture technology. This strategy positions the company for anticipated climate regulation while maintaining reasonable customer rates and regulatory support for investments. Fowke outlines capital spending projections and enhanced recovery mechanisms that can deliver earnings and dividend growth.
Fushi Copperweld produces copper-clad aluminum and copper-clad steel wire products. It has manufacturing facilities in China, the US, and the UK. The company sees opportunities for growth in China's expanding telecom industry and through strategic acquisitions. While dependent on copper prices, the company's performance is expected to improve with economic recovery. Financial analysis shows the company has no debt, high margins, and the stock may be undervalued based on an APV valuation model. The presentation recommends buying the stock.
Nike Stock Pitch: Analysis and ValuationAyan Sengupta
Nike's revenue in fiscal year 2017 was distributed as follows: 57% from footwear, 27% from apparel, 6.5% from equipment, 2% from global brand divisions, and 6.5% from Converse. Geographically, Nike's sales were distributed as: 47% from North America, 19% from Western Europe, 6% from Central & Eastern Europe, 10% from Greater China, 3% from Japan, and 15% from emerging markets. Nike has strengths in its brand reputation and global presence but relies heavily on the footwear market. It faces opportunities in emerging markets but also threats from competition and negative public perceptions.
GoPro is overvalued and presents an attractive short opportunity. It has limited its market to extreme sports cameras and faces increased competition from other companies making similar lower-cost cameras. GoPro's efforts to expand into media ventures through YouTube and other partnerships are speculative and unlikely to generate enough revenue to justify GoPro's high valuation. Using reasonable forecasts, GoPro's enterprise value far exceeds what its future revenue prospects can support, indicating the stock price is likely to fall.
This Facebook pitch deck illustrates the vast potential for investors, institutional and retail alike, to capitalize on the upside of the social media giant. We dissect the impact of Facebook's latest acquisitions, current and future growth rates, the NPV of the acquisitions and what it all means for Facebook shareholders going forward.
This document provides an overview and summary of a webinar on stock pitches for interviewing in sales and trading, hedge funds, and research positions. The webinar is hosted by James Aldige, an investment analyst, and covers preparing for interviews, the interview process, delivering an effective stock pitch, and tips for finding investment ideas. Key aspects of a successful stock pitch highlighted are clearly outlining your investment thesis, valuation analysis, catalysts, and differentiating your view from the consensus.
Stock pitch of Herc Rentals, traded on the New York Stock Exchange (NYSE). Target price created through a Discounted Cash Flow (DCF) analysis with the EBITDA multiple approach.
Sources: Company Website, Company Filings, Thomson One, RBC Capital Markets, KeyBank Capital Markets, GAMCO Investors, Yahoo! Finance, Independent, PwC, Oxford Economics,
Western Digital Corporation Stock Pitch Kaminski, ScudieriAnthony Scudieri
Western Digital is a manufacturer of data storage products including hard disk drives, solid state drives, and external storage devices. It has a 45% market share and focuses on R&D to develop innovative storage solutions. Key drivers for the company include the rapid growth of data creation and storage needs of businesses and consumers. Recent acquisitions in the SSD market position Western Digital competitively in that segment. Valuation analyses find the company trading at attractive multiples compared to peers, and financial ratios demonstrate strong profitability and returns.
Realty Income is a real estate investment trust that owns commercial properties and leases them to retailers on long-term net leases. It owns over 2300 properties across 49 states with a focus on retail properties leased to tenants in industries that provide necessities. While its financials have weakened due to the economic downturn, it maintains a strong portfolio occupancy rate and has access to capital to acquire more properties when opportunities arise. However, risks include a potential disconnect between dividends and earnings growth and retail tenant defaults increasing due to the recession.
This document summarizes an investor presentation by Xcel Energy on its business operations and financial outlook. It discusses Xcel Energy's integrated utility operations, positive cash flow generation, plans to divest its stake in NRG Energy through bankruptcy proceedings, financial guidance for 2003 including earnings per share, and capital expenditure plans. The presentation also provides comparisons of Xcel Energy's operating metrics to industry peers.
Fifth Third Bancorp reported third quarter 2007 earnings of $376 million, or $0.71 per diluted share. Net interest income increased 2% sequentially and 6% year-over-year. Average loans grew 2% sequentially and 6% year-over-year. Noninterest income grew 2% sequentially and 9% year-over-year, driven by increases in electronic payment processing, service charges on deposits, and corporate banking revenue. Credit quality remained challenging with provision for loan and lease losses up 14% sequentially.
This document provides a summary from Dick Kelly, Chairman and CEO of Xcel Energy, at the Edison Electric Institute Financial Conference in November 2006. It discusses Xcel Energy's strategy of building its core utility business through meeting customer needs, environmental leadership, and regulatory and legislative accomplishments. Key points include delivering competitively priced and reliable energy, leading in renewables and emissions reductions, and significant investment opportunities through 2020 to support growth. Earnings guidance of $1.25-1.35 per share is provided for 2006 and $1.35-1.45 for 2007.
The Progressive Corporation reported its first quarterly loss since 2000 in its third quarter 2008 report. Progressive was impacted by market turmoil related to the mortgage and credit crises. Progressive had recognized losses on its investment portfolio due to declines in the stock market. However, the company's underlying insurance operations remained strong, with continued growth in policies in force and high customer retention rates.
Kaydon Corp. is rated a "Buy" with a price target of $30.85. Kaydon designs and manufactures custom-engineered bearings and other products. It has benefited from growth in the wind power industry, which now represents about 20% of sales. However, Kaydon faces cyclical risks from its industrial end markets declining. It also relies on acquisitions for growth, which carry integration risks. Government subsidies that support the wind industry could also be at risk if not extended. Overall, Kaydon is well-positioned in stable industries like defense, but broader economic weakness and policy changes present challenges.
1) The document discusses Bank of America's enterprise risk management strategies and capabilities. It highlights how the bank manages various types of risk, including credit, market, and operational risk across its consumer and commercial businesses.
2) Key strengths that help the bank manage risk include its breadth of client access, industry insights, and integrated risk management structure.
3) The bank has improved its risk profile by rebalancing its commercial credit portfolio and enhancing risk monitoring tools.
Danaher Corporation released supplemental financial information regarding its debt to total capital and net debt to total capital ratios as of July 1, 2005 and December 31, 2004. As of July 1, 2005, Danaher Corporation's debt to total capital ratio was 21.3% and its net debt to total capital ratio was 8.1%, representing decreases from December 31, 2004 ratios of 22.6% and 12.4% respectively. These ratios provide useful information to investors regarding the company's debt leverage and management uses them to evaluate leverage over time to determine additional borrowing capacity.
Government intervention hurts investors. As the government focuses on slowing credit growth, it is making it tougher for certain types of investors and borrowers to qualify for financing. Changes to insured mortgage rules have lowered amortization periods, reduced refinancing limits, and tightened debt servicing ratios. Regulators have also imposed new rules that reduce HELOC amounts and require reasonable income verification for stated income borrowers. These changes are restricting the money supply and access to credit for rental portfolios, self-employed individuals, and higher-ratio mortgages.
el paso C0A209DE-4313-4A81-8B00-54550DEAC9E8_Barclays_Fixed_Income_032509finance49
El Paso Corporation provides natural gas and related energy products. It has raised its liquidity to $3.3 billion and reduced capital spending thoughtfully in response to market challenges. The company has set 2009 financial targets including EPS of $0.85-1.05 and EBIT of $2.0-2.3 billion. It has a large pipeline backlog that is expected to generate $1.2 billion in incremental EBITDA. El Paso also has significant natural gas and oil reserves and is focusing its $0.9-1.3 billion capital budget on lower-risk exploration and production programs.
Global ACV down slightly for the year. Number of mega relationship contracts up for 2012, lifting acv when overall contract numbers were down. BPO expanded on several large deals while ITO performance was off for 2012. Asia Pacific surged in 2012 while EMEA struggled on a weak first half. Guarded optimism for 2013 with a possible slowdown in the second quarter.
This document summarizes Midwest investor meetings held by Xcel Energy in May and June 2005. It outlines Xcel's low-risk business strategy of investing in regulated utility assets to earn an authorized return on equity. Key points include Xcel operating as the 4th largest US electric and gas utility, growth opportunities through infrastructure investments, regulatory filings, and a total return objective of 7-9% per year through earnings growth and dividends.
This document outlines Xcel Energy's low-risk business strategy of investing in regulated utility assets to earn their authorized rate of return. Key points include:
- Xcel Energy aims for a total annual return of 7-9% through a 5% dividend yield and 2-4% earnings growth.
- Nearly 100% of income comes from regulated utility operations in 8 states, diversifying regulatory risk.
- Capital expenditure forecasts through 2009 will increase rate base and allow earning higher returns on equity.
- Regulatory initiatives are planned in various states from 2005-2007 to obtain rate increases.
xcel energy BAC_Presentation_112007_Finalfinance26
Ben Fowke, Vice President and CFO of Xcel Energy, discusses the company's strategy to achieve financial success through environmental leadership. Xcel aims to stabilize or reduce carbon emissions from electricity by 2020 through renewable energy, energy efficiency, upgrading plants, and evaluating carbon capture technology. This strategy positions the company for anticipated climate regulation while maintaining reasonable customer rates and regulatory support for investments. Fowke outlines capital spending projections and enhanced recovery mechanisms that can deliver earnings and dividend growth.
Fushi Copperweld produces copper-clad aluminum and copper-clad steel wire products. It has manufacturing facilities in China, the US, and the UK. The company sees opportunities for growth in China's expanding telecom industry and through strategic acquisitions. While dependent on copper prices, the company's performance is expected to improve with economic recovery. Financial analysis shows the company has no debt, high margins, and the stock may be undervalued based on an APV valuation model. The presentation recommends buying the stock.
Nike Stock Pitch: Analysis and ValuationAyan Sengupta
Nike's revenue in fiscal year 2017 was distributed as follows: 57% from footwear, 27% from apparel, 6.5% from equipment, 2% from global brand divisions, and 6.5% from Converse. Geographically, Nike's sales were distributed as: 47% from North America, 19% from Western Europe, 6% from Central & Eastern Europe, 10% from Greater China, 3% from Japan, and 15% from emerging markets. Nike has strengths in its brand reputation and global presence but relies heavily on the footwear market. It faces opportunities in emerging markets but also threats from competition and negative public perceptions.
GoPro is overvalued and presents an attractive short opportunity. It has limited its market to extreme sports cameras and faces increased competition from other companies making similar lower-cost cameras. GoPro's efforts to expand into media ventures through YouTube and other partnerships are speculative and unlikely to generate enough revenue to justify GoPro's high valuation. Using reasonable forecasts, GoPro's enterprise value far exceeds what its future revenue prospects can support, indicating the stock price is likely to fall.
This Facebook pitch deck illustrates the vast potential for investors, institutional and retail alike, to capitalize on the upside of the social media giant. We dissect the impact of Facebook's latest acquisitions, current and future growth rates, the NPV of the acquisitions and what it all means for Facebook shareholders going forward.
This document provides an overview and summary of a webinar on stock pitches for interviewing in sales and trading, hedge funds, and research positions. The webinar is hosted by James Aldige, an investment analyst, and covers preparing for interviews, the interview process, delivering an effective stock pitch, and tips for finding investment ideas. Key aspects of a successful stock pitch highlighted are clearly outlining your investment thesis, valuation analysis, catalysts, and differentiating your view from the consensus.
Stock pitch of Herc Rentals, traded on the New York Stock Exchange (NYSE). Target price created through a Discounted Cash Flow (DCF) analysis with the EBITDA multiple approach.
Sources: Company Website, Company Filings, Thomson One, RBC Capital Markets, KeyBank Capital Markets, GAMCO Investors, Yahoo! Finance, Independent, PwC, Oxford Economics,
Western Digital Corporation Stock Pitch Kaminski, ScudieriAnthony Scudieri
Western Digital is a manufacturer of data storage products including hard disk drives, solid state drives, and external storage devices. It has a 45% market share and focuses on R&D to develop innovative storage solutions. Key drivers for the company include the rapid growth of data creation and storage needs of businesses and consumers. Recent acquisitions in the SSD market position Western Digital competitively in that segment. Valuation analyses find the company trading at attractive multiples compared to peers, and financial ratios demonstrate strong profitability and returns.
Cleveland Research Company Stock Pitch Competition Finalist PresentationNick Meyerson
Finished in the top 5 teams, presented this slideshow to a panel of equity research analysts and associates, and fielded questions about Mobileye's capital structure, its share price's sensitivity to excitement in the media, and projections including a DCF analysis, comparables analysis, and multiple sensitivity analyses.
Was one of five teams to present in front of a panel of equity research analysts and associates. Pitched Mobileye (MBLY) stock as a buy with a 12 month price target of $70.00 with a 67% upside from its current share price. As of 9/9/2016, MBLY is up 31% since our pitch.
The slide deck we used to raise half a million dollarsBuffer
This is the pitchdeck we used to raise half a million dollars from Angel investors. More here:
http://onstartups.com/tabid/3339/bid/98034/The-Pitch-Deck-We-Used-To-Raise-500-000-For-Our-Startup.aspx
Centene Corporation (CNC) is a health insurance company that provides government-sponsored healthcare programs to under-insured individuals. It is acquiring HealthNet, which will expand its Medicaid membership to 11 million across 23 states. The acquisition is expected to close in June 2016 and provide significant revenue growth and cost synergies. Centene has a diversified business model across government programs and geographies. It has achieved strong revenue and earnings growth through acquisitions and expansion into new markets. The analyst recommends buying CNC with a target price of $79.8 based on the company's steady growth prospects and undervaluation.
Cleveland Research Company 2016 Stock Pitch Competition- Tempur Selay Finalist Alexander Liscum
One of 5 finalists chosen out of 25 competitive teams to present to equity research professionals in the 2016 CRC Stock Pitch Competition at Miami University.
Gibson Energy is recommended as a Buy based on its commitment to growth through $700M in capital expenditures, ability to provide continued shareholder value through increasing dividends, and strong liquidity position to withstand depressed oil prices. Valuation analyses using comparable companies and a discounted cash flow model imply the share price is undervalued at current levels. However, risks include continued weakness in commodity prices and environmental concerns potentially limiting future growth opportunities.
Based on the analysis, WM is a well-established leader in the waste management industry with significant scale advantages over competitors. However, margins have been negatively impacted by acquisitions and rising fuel costs. Going forward, the company is focused on growth through continued M&A and investments in recycling to capitalize on industry trends toward sustainability.
Apollo Hospitals is India's largest healthcare group with over 9,000 beds across 64 hospitals. It has experienced strong growth over the last 6 years with revenues growing at a 18% CAGR and profits growing at a 32% CAGR. The company plans to continue expanding its hospital network in tier 1 and tier 2 cities and increase its pharmacy retail footprint to drive further growth. Apollo Hospitals is well positioned to benefit from India's underpenetrated healthcare market as demand for quality healthcare rises.
Tesla Motors Inc is pitching an investment in the company. Major catalysts for the investment are the upcoming Gigafactory battery production facility and Tesla Model 3 vehicle. The presentation recommends a buy rating for Tesla stock with a 10-year investment horizon and a target price of $545 per share based on discounted cash flow analysis and comparable company valuations. Risks include production and demand challenges.
The document discusses the benefits of exercise for mental health. Regular physical activity can help reduce anxiety and depression and improve mood and cognitive functioning. Exercise boosts blood flow and levels of neurotransmitters and endorphins which elevate and stabilize mood.
Patrick J. Sowers is applying for a geologist position and has recently graduated with a Bachelor's of Science in Geology from West Virginia University. He has experience in field work from his coursework and field camp experiences. He also has work experience in customer service and working with engineers. Sowers believes his education, technical skills, problem solving abilities, and passion for geology would make him a strong candidate for this position.
The document outlines that statements made in the presentation that are not historical facts are forward-looking statements representing presenters' beliefs and assumptions based on currently available information, and that actual results could differ materially from projections due to various risk factors; it also notes that the presentation may relate to matters such as expected financial performance and business prospects.
This document provides an overview of common valuation models, including comparable public companies analysis, precedent transactions analysis, and discounted cash flow (DCF) analysis. Comparable public companies analysis values a company based on valuation multiples of similar public firms. Precedent transactions analysis examines valuation multiples from recent acquisitions of similar companies. DCF analysis values a company based on the present value of its projected future cash flows. The document discusses key aspects of each model such as selecting comparable companies and transactions, calculating valuation multiples, and forecasting cash flows.
A financial model is a quantitative or accounting logic chain designed to forecast future outcomes based on data inputs. Models allow for better forecasting than guessing by incorporating assumptions, economic data, and other variables. Common types of financial models include econometric models, industry models, and earnings models. An example regression model correlates housing starts to population estimates to forecast new home construction. Good analysts spend most of their time developing and interpreting financial models.
This document recommends buying shares of KEMET Corporation, a capacitor manufacturer, at a price target of $11.27 per share. KEMET has three business segments that drive its valuation: tantalum capacitors with 10% operating margins and 42% of revenue; ceramic capacitors with 17% margins and 22% of revenue; and film and electrolytic capacitors with -7% margins and 36% of revenue. Catalysts for the stock include margin improvements, cost reductions, and the acquisition of NEC-Tokin, which would make KEMET the market leader in tantalum capacitors. The recommendation is based on a discounted cash flow analysis valuing KEMET at $11.27 per share, below its
BlocPower aims to provide no-money-down solar and energy efficiency retrofits to underserved communities by aggregating groups of property owners and obtaining financing. They will market and install the retrofits, saving customers energy costs while generating income from the resulting savings. The social enterprise expects to expand to multiple cities and retrofit thousands of properties while creating local jobs and reducing carbon emissions.
BlocPower aims to provide no-money-down solar and energy efficiency solutions to underserved communities through innovative financing and partnerships. They will aggregate groups of property owners to access capital and complete installations, saving customers money while hiring local residents. If successful, BlocPower could help reduce energy costs and carbon emissions in low-income areas while creating jobs and economic opportunity.
Monte Carl Simulation is a powerful and effective tool when used properly helps to navigate the expected Net Present Value NPV. This presentation helps to improve the pattern to ackowlege onthe Odessa Investment by Decision Dres.
el paso C0A209DE-4313-4A81-8B00-54550DEAC9E8_Barclays_Fixed_Income_032509finance49
El Paso Corporation provides natural gas and related energy products. It has raised its liquidity to $3.3 billion and reduced capital spending thoughtfully in response to market challenges. The company has set 2009 financial targets including EPS of $0.85-1.05 and EBIT of $2.0-2.3 billion. It has a large pipeline backlog that is expected to generate $1.2 billion in incremental EBITDA. El Paso also has significant natural gas reserves and is focusing its $0.9-1.3 billion capital budget on lower-risk exploration and production programs.
The global outsourcing industry is constantly evolving through new contracting award characteristics and an expanding universe of successful service providers. ISG's TPI Index helps industry participants, enterprises and organizations keep pace and capitalize from the latest data on outsourcing trends. It is the authoritative source for marketplace intelligence related to outsourcing: transaction structures and terms, industry adoption, geographic prevalence and service provider metrics.
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The global outsourcing industry is constantly evolving through new contracting award characteristics and an expanding universe of successful service providers. ISG's TPI Index helps industry participants, enterprises and organizations keep pace and capitalize from the latest data on outsourcing trends. It is the authoritative source for marketplace intelligence related to outsourcing: transaction structures and terms, industry adoption, geographic prevalence and service provider metrics.
Ecopetrol's exploration and production strategy focuses on four drivers to increase production to 1.3 million barrels per day by 2020 and add over 6 billion barrels of oil reserves. The first driver involves increasing production and recovery factors at current fields through drilling, non-thermal recovery methods like water injection, and thermal recovery. The second driver is an exploration program focused on key areas in Colombia and internationally. The third involves assessing unconventional resources, and the fourth pursues acquisitions and partnerships.
This document contains the presentation from Tim Ford, President of Terex Aerial Work Platforms, at the JPMorgan Basics & Industrials Conference on June 4, 2008. Ford discusses the strong sales growth and global expansion of Terex AWP over the past decade. He outlines the secular growth drivers of the aerial work platform industry and Terex AWP's strategy to further strengthen and globalize its business, maximize revenue and profit from its large installed base, and extend its product offerings beyond aerials. Ford also highlights opportunities to apply lean principles more broadly across the value chain through partnerships with customers and suppliers.
This document contains the presentation from Tim Ford, President of Terex Aerial Work Platforms, at the JPMorgan Basics & Industrials Conference on June 4, 2008. Ford discusses the strong sales growth and global expansion of Terex AWP over the past decade. He outlines the secular growth drivers for the aerial work platform industry and Terex AWP's strategies to further strengthen and globalize its business, maximize revenue and profit from its large installed base, and extend its product offerings beyond aerials. Ford also highlights opportunities to apply lean principles more broadly across the value chain and customer relationships.
Ideiasnet reported its 3Q09 results, with net revenue down 2.2% YoY to R$226.4 million but up 23.5% from 2Q09. EBITDA declined 50.1% YoY to R$3.7 million but reversed losses in 2Q09. Several portfolio companies returned to historic margins. The company invested R$5.96 million in the quarter and ended with R$65.5 million in net debt. Subsequent events included a tender offer to acquire Ideiasnet shares and an acquisition by Trinnphone doubling its size.
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Omnicom reported strong financial results for 2005, with record revenue of $10.5 billion, up 8% from 2004. Net income increased 9% to $791 million, and diluted earnings per share rose 12% to $4.36. Operating profit grew 10% to $1.3 billion. The company saw growth across all of its business segments, including advertising, customer relationship management, public relations, and specialty communications. Omnicom also had record new business wins in 2005 and continued to make investments to strengthen its creative capabilities and expand its global reach.
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This document provides an overview of Dais Analytic Corporation, including key information about its nanotechnology products, markets addressed, financial projections, growth plans, and management team. Dais is developing nano-material based applications for energy, HVAC, water treatment, and energy storage markets. Its flagship product, ConsERV, generated $1.1 million in revenue in 2008. Financial projections estimate total sales growing from $1.7 million in 2009 to $61.9 million by 2012. The growth plan focuses on expanding ConsERV sales and developing new products in HVAC, water treatment, and energy storage using Dais' nano-materials.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
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Delve into the world of STREETONOMICS, where a team of 7 enthusiasts embarks on a journey to understand unorganized markets. By engaging with a coffee street vendor and crafting questionnaires, this project uncovers valuable insights into consumer behavior and market dynamics in informal settings."
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After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
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Solution Manual For Financial Accounting, 8th Canadian Edition 2024, by Libby, Hodge, Verified Chapters 1 - 13, Complete Newest Version Solution Manual For Financial Accounting, 8th Canadian Edition by Libby, Hodge, Verified Chapters 1 - 13, Complete Newest Version Solution Manual For Financial Accounting 8th Canadian Edition Pdf Chapters Download Stuvia Solution Manual For Financial Accounting 8th Canadian Edition Ebook Download Stuvia Solution Manual For Financial Accounting 8th Canadian Edition Pdf Solution Manual For Financial Accounting 8th Canadian Edition Pdf Download Stuvia Financial Accounting 8th Canadian Edition Pdf Chapters Download Stuvia Financial Accounting 8th Canadian Edition Ebook Download Stuvia Financial Accounting 8th Canadian Edition Pdf Financial Accounting 8th Canadian Edition Pdf Download Stuvia
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Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
[4:55 p.m.] Bryan Oates
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NLC Stock Pitch - Full Version
1. weIMG Stock Pitch Presentation
November 14, 2009
richmond@chicagobooth.edu
2. Long Idea: Nalco
• Nalco is a service-based specialty chemical company that provides
solutions to treat water and enhance air quality for industrial &
institutional use
Operates in 3 segments: Water & Process Services, Energy, and Paper
• Capitalization: Ticker: “NLC”
Enterprise value(1): $6.8 billion Current Price: $23(2)
Equity market value: $3.2 billion 1 Yr. Target Price: $28
Adjusted net debt(1) / Enterprise value: ~53% 1 Yr. Expected Return: > 20%
• Recent valuation multiples:
Consensus implied forward P/E: 2010: 18.2x ; 2011: 13.6x (4yr average: ~19x)
Average PEG ratio for the past 4 years: ~0.6
Adjusted EV/EBITDAR of ~ 9.5x in the past 4 years
(1) Includes unfunded pension & OPEB obligations of $497 million and capitalized value of operating lease of $169 million.
(2) Based on the five-day average closing price between 11/06/2009 and 11/12/2009.
2 richmond@chicagobooth.edu
4. Long Thesis: Investment Highlights
Sticky service-based business model misunderstood by the Street
Not all products & services are exposed to economic volatility
Strong earnings power underneath a large debt load
FCF generation increased during the recession
New CEO understands past missteps; focused on reinventing Nalco
Solidifying position in “BRICs+”(1) markets after years of under-investment
Borrowed DuPont playbook: Retraining Nalco’s sales force (mostly P. Eng & PhD)
Innovative new products + Operational Stability = Multiple Expansion
3D TRASAR for boilers has outsize market potential
Nalco is in the epicenter of favorable long-term secular themes in water
treatment, energy production, and air pollution
Essential to support infrastructure required to drive economic development
(1) Refers to the “BRICs” (i.e. Brazil, India, Russia, China) and countries in Europe, Africa, and Middle East
4 richmond@chicagobooth.edu
5. Leading Market Share in All its Segments
Source: Nalco presentation
5 richmond@chicagobooth.edu
6. Water Treatment Industry is Highly Fragmented
Sizeable Opportunity for
Nalco to make selective
“tuck-in” acquisitions
Source: Nalco Presentation “MVA” is Manufacturing Value Added
Nalco has sizeable scale over its competitors – each of which is less than half its size
6 richmond@chicagobooth.edu
7. What the Consensus is Missing
• Upside surprise #1: Growth from “BRICs+” (~42% of ‘08 Revenues)
Recurring business alone has historically grown 3-4% per year
• Upside surprise #2: Robust 3D TRASAR sales (boiler & cooling tower)
High margin offering that reduces customer maintenance CapEx & O&M costs
Unit sales for boiler application in ’09 at same level as ’08, despite the recession
“Foot in the door” for other sales opportunities (e.g., Mobotec)
• Upside surprise #3: Continue to deliver cost savings
Surpassed $100 million goal in 2009 in Q3; raised full year target to $150 million
Employee bonus tied to level of cost savings achieved
• Risk of inability to refinance debt has been laid to rest
Next large repayment ($490 million) not due until Q3 2011
Nalco stock sold off during the credit crisis due to heightened refinancing risk
In addition to the upside surprises, investors need to look past 2010 and realize that
industrial and energy production will not remain idle, especially in BRICs+ markets
7 richmond@chicagobooth.edu
8. Why the Sell-Side does NOT Understand Nalco
Excerpt from Barclays’ November 3, 2009 research note (pg.3)
Colder weather does not have an affect on the efficiency of a plant’s cooling system
as water is discharged from boilers at very high temperatures. Therefore, the usage
of chemicals to treat a plant’s cooling water is not affected by seasonality
8 richmond@chicagobooth.edu
9. Strong and Consistent Earnings Power
~7% CAGR
~6% CAGR
Source: Nalco presentation 2008: Up 3.7% excluding $23m contribution from
Synfuels division in the prior year (business
closed at end of 2007)
9 richmond@chicagobooth.edu
10. Relative Valuation: Still Below Fair Value
Stock Price Mkt Cap Unadj TEV Net Debt/ TEV/Revenues TEV/EBITDA P/E
Company (in $US) ($mm) ($ mm) TTM EBITDA 2010e 2011e 2010e 2011e 2010e 2011e PEG
Danaher $ 72.00 $ 23,129 $ 24,443 0.7 x 2.0 x 1.9 x 10.9 x 9.9 x 18.5 x 16.4 x 2.35
Ecolab $ 46.00 $ 10,930 $ 11,801 0.8 x 1.9 x 1.8 x 10.0 x 9.2 x 20.4 x 17.8 x 0.68
Pall Water $ 34.00 $ 3,975 $ 4,278 0.7 x 1.7 x 1.6 x 9.7 x 8.7 x 17.5 x 14.8 x 1.09
Kurita Water Ind. $ 32.00 $ 4,117 $ 3,880 -0.5 x 1.7 x 1.6 x 7.9 x 7.1 x 20.8 x 18.3 x 2.12
Tetra Tech Inc. $ 26.00 $ 1,575 $ 1,581 0.0 x 1.0 x 0.9 x 9.6 x 9.6 x 19.1 x 16.8 x nm
Calgon Carbon $ 14.00 $ 784 $ 768 -0.3 x 1.6 x 1.5 x 8.6 x 7.4 x 17.7 x 14.8 x 0.82
Mean 0.2 x 1.7 x 1.6 x 9.4 x 8.6 x 19.0 x 16.5 x 1.41
High 0.8 x 2.0 x 1.9 x 10.9 x 9.9 x 20.8 x 18.3 x 2.35
Low -0.5 x 1.0 x 0.9 x 7.9 x 7.1 x 17.5 x 14.8 x 0.68
Nalco Holding $ 23.00 $ 3,178 $ 6,113 5.3 x 1.5 x 1.4 x 8.5 x 7.7 x 17.0 x 13.3 x 0.29
Variance to Comps 2060% -9% -8% -10% -11% -11% -19% -79%
EV to 2010 EBITDA EV to 2010 Revenues
2010e Revenues
$ 23 8.5 x 9.0 x 9.5 x 10.0 x 10.5 x $ 23 1.5 x 1.6 x 1.7 x 1.8 x 1.9 x
2010e EBITDA
-10.0% $ 645 $ 19 $ 21 $ 23 $ 25 $ 28 -10.0% $ 3,610 $ 19 $ 20 $ 23 $ 26 $ 28
Premium /
(Discount)
Premium /
(Discount)
-5.0% $ 681 $ 21 $ 23 $ 25 $ 28 $ 30 -5.0% $ 3,810 $ 21 $ 23 $ 26 $ 28 $ 31
0.0% $ 717 $ 23 $ 25 $ 28 $ 31 $ 33 0.0% $ 4,011 $ 23 $ 25 $ 28 $ 31 $ 34
5.0% $ 753 $ 25 $ 28 $ 30 $ 33 $ 36 5.0% $ 4,211 $ 25 $ 27 $ 30 $ 33 $ 37
10.0% $ 789 $ 27 $ 30 $ 33 $ 36 $ 39 10.0% $ 4,412 $ 27 $ 30 $ 33 $ 36 $ 39
Because of the significant amount of debt held by Nalco compared to its peers,
comparative valuation using TEV/EBITDA multiple is the most appropriate.
10 richmond@chicagobooth.edu
11. DCF Valuation: Looking Beyond 2010
Terminal
2010e 2011e 2012e 2013e 2014e 2015e 2016e 2017e Value
EBITDA $ 717 $ 799 $ 852 $ 903 $ 953 $ 996 $ 1,041 $ 1,067
YoY % Growth 26.2% 11.4% 6.7% 6.0% 5.5% 4.5% 4.5% 2.5%
CapEx (112) (118) (125) (128) (131) (134) (138) (141)
Change in Net Working Capital (14) (28) (29) (32) (36) (39) (42) (45)
Cash Taxes (105) (133) (160) (169) (179) (187) (195) (200)
Unlevered FCFF $ 486 $ 519 $ 539 $ 574 $ 607 $ 636 $ 665 $ 681
Terminal Value Multiple 8.0 x <<< reflects lower growth business
Terminal Value $ 8,532
WACC 9.0% <<< 100bps premium over Bloomberg calculated rate
PV (at 12/31/09) $ 465 $ 456 $ 434 $ 424 $ 412 $ 396 $ 380 $ 357 $ 4,282
Implied Share Price Calculation
FCF to Firm $ 3,324
Terminal Value 4,282
Enterprise Value $ 7,606
Net Debt (2,934)
Equity Value $ 4,672
Shares Outstanding 138.7
Implied Share Price $ 34
Implied EV/2010 EBITDA 10.6 x
On a DCF basis, Nalco’s shares appear to be ~30% undervalued as the outsize
growth in the next 5 years is not reflected in 2010 forward TEV/EBITDA multiple
11 richmond@chicagobooth.edu
12. Owners of Nalco’s Stock
Ownership Summary
Type # Shares Held % of Total Shares Outstanding Market Value (USD in mm)
5
Institutions 116,208,816 84.09 2,657.7
Hedge Fund Managers 4,784,170 3.46 109.4
Insiders 6,491,213 4.70 148.5
3
Public and Other 10,710,389 7.75 245.0
Total 138,194,588 100.00 3,160.5
Top 5 shareholders control
~20% of Nalco’s stock
Top Holders
Holder # Shares Held % of Total Shares Outstanding Market Value (USD in mm) Position Date
Berkshire Hathaway Inc. 9,000,000 6.51 205.8 Jun-30-2009
Shapiro Capital Management LLC 6,034,410 4.37 138.0 Jun-30-2009
Morgan Stanley Investment Management 5,050,165 3.65 115.5 Jun-30-2009
MSD Capital, L.P. 4,841,204 3.50 110.7 Jun-30-2009
The Vanguard Group, Inc. 4,807,602 3.48 109.9 Jun-30-2009
Source: Capital IQ
12 richmond@chicagobooth.edu
13. Key Risks to the Investment Thesis
• Further and prolonged deterioration in the economy
Nalco’s “stickiness” is limited to a plant (or rig) being operational
Diversified client base (largest customer accounts for < 3% of revenues)
• Sudden increase in raw materials cost
Equates to ~30% of expenses, with no single component >3.5% of the total
• Inability to pay or refinance ~$500 million of debt maturing in 2011
Nalco’s ability to tap the credit markets was evident during Q2 2009, when it
successfully refinanced $1.2 billion of debt
• Adverse changes to the US pension legislation could require Nalco to
make additional contributions (estimated at ~$200 million)
Pension plan is currently ~ 80% funded
Employees is legacy pension moved to defined contribution plan
The biggest risk is that the global economy will enter into a prolonged period of
negative growth – which will curtail output in sectors that will drive Nalco’s expansion
13 richmond@chicagobooth.edu
15. Water, Water Everywhere… NOT
Global Water Supply
Volume % of % of
Water Source (M km3) Total Freshwater
Oceans 1,337.928 96.528% 0.000%
Icecaps & Glaciers 24.062 1.736% 68.700%
Ground water 23.399 1.688% 0.000% Though the earth is comprised of 70%
Fresh 10.528 0.760% 30.100%
Saline 12.871 0.929% 0.000% water, ~2% is available for residential,
Ground Ice & Permafrost 0.300 0.022% 0.860%
Lakes 0.176 0.013% 0.000% industrial, and agricultural use. Of the
Fresh 0.091 0.007% 0.260%
Saline 0.085 0.006% 0.000%
~2%, less than 33% is accessible
Soil Moisture 0.165 0.012% 0.050%
Atmosphere 0.013 0.001% 0.040%
Rivers 0.002 0.000% 0.006%
Biological Water 0.001 0.000% 0.003%
TOTAL 1,386.047 100% 100% Key drivers of increasing water demand:
Source: USGS
Global Trends in Water Usage: Withdrawals
1) Population growth
2) Economic development
3) Rising affluence
Investments in BRICs+ during the recession
will position Nalco to assist industrial clients
manage an increasingly constrained resource
Source: Jefferies Intl, Unesco, Aquastat, IFPRI
15 richmond@chicagobooth.edu
16. Nalco’s Rationale for Investing in BRICs
Source: Nalco Presentation “MVA” is Manufacturing Value Added
In developing countries, water treatment costs grow faster than GDP, adding to the
already high industrial growth rates – both of which serve as opportunities for Nalco
16 richmond@chicagobooth.edu
17. Coal, Oil, Gas & Nuclear to meet Energy Needs
Incremental Primary Energy Demand by Fuel Type (2006 to 2030)
* Includes biomass and waste, and other renewables
Source: IEA World Energy Outlook 2008
“Mtoe” refers to “Mega tonne of oil equivalent”; 1 Mtoe translates to ~12,000 GWh,
which represents ~1% of the total power generating capacity in the US today
17 richmond@chicagobooth.edu
18. Cheap Sources of Power Require a lot of Water
Source: California Energy Commission
18 richmond@chicagobooth.edu