Thursday, May 25, 2017

Pius XI AP Macroeconomics Student YouTube Video - Check It Out!

AP Macromore – Rates Down!



Roger Radke is a Social Studies teacher at Pius XI High School located in Milwaukee, Wisconsin. Roger and the entire Pius administration are great partners with the AIM program at Marquette University. He is the chair of the Social Sciences department and he teaches a variety of courses, including AP Macroeconomics.

Mr. Radke allows his students do any additional ‘creative projects’ for extra credit following the AP exams, which occurred two weeks prior to the end of their school year. The three main actors in the video are the following Pius XI students: Daniel Gutierrez, Ben Hermann and Aaron Moll.

The following YouTube video was based off of an original Macklemore song, but the lyrics were rewritten based on Macroeconomics topics. Here is the finished product, called “AP Macromore – Rates Down.”   








Tuesday, May 23, 2017

Great News - Marquette's CQA Team Placed 2nd Globally!

Marquette’s Applied Investment Management (AIM) Team Placed Second in the 2017 Chicago Quantitative Alliance Worldwide Student Portfolio Contest

The Chicago Quantitative Alliance (CQA) is a professional investment organization comprised of leading quantitative investment practitioners.  The CQA membership includes investment managers, academics, plan sponsors, consultants, and other investment professionals.  The primary goal of the CQA is to facilitate the interchange of ideas between quantitative professionals. 

Cqa logoAnnually the Chicago Quantitative Alliance holds a portfolio management contest for university students, where the students must manage a portfolio with strict requirements.  This past year, the contest ran from the end of October until the start of April. 
In only their second year of competing, Marquette’s AIM team placed second!



The CQA’s primary goal is to “promote the interests of the quantitative investment community.”  The graduate and undergraduate students involved in the competition were tasked with creating portfolios and they were provided access to faculty and CQA mentors, who guided them along the way.  When creating the portfolios, the students had to follow certain rules:
  •          The portfolio had to have a beta of +/- 0.5
  •          The portfolio had to be long/short portfolios that were market neutral.
  •          The ‘universe’ of potential stocks that they could choose from, was limited to 1,000 liquid large and midcap stocks.
  •         The portfolio had to have less than 5% of its holdings in cash.
  

Marquette Team 2 members included:  James Hannack, Connor Konicke, Jack Gorski, Jordan Luczaj, and William Reckamp.  Marquette Team 1 members include: Brian Shank, Joseph Amoroso, Tim Milani, and Chengbin (Henry) Lu.

Student groups were judged not only on their returns, but also on their risk-adjusted returns (Alpha and Sharpe Ratio) and a video presentation that they had to make for the competition. The winner was the University of Arizona. 

The table below shows the rankings of the three investment criteria. Note that while Marquette’s Team 2 was ranked 2nd overall, Marquette’s Team 1 had the 3rd highest Alpha (nearly 8%).

As compared to the AIM program which is focused on individual fundamental stock analysis, the CQA is more “hedge-fund like”.  Stock selection is based on factors that are possessed by certain stocks, such are leverage, profitability, value or growth.  In addition to buying stocks that are ranked highly by these factors, a “market neutral” strategy is mandated by CQA.  This means for each stock purchased, another must be “shorted”.  This years Marquette’s teams focused on low volatility correlated with high performance stocks, and were “tweaked” by each team.  Both teams performed extremely well relative compared to a very talented universe.   




The next table shows the overall rankings of all student teams participating in the 2017 CQA Challenge.



Dr. David Krause, AIM program director said, “The past two years have been rewarding for the CQA teams. This is a unique opportunity to manage a market neutral portfolio, interact with quantitative practitioners and compete against other schools. I know all of our team members have gained much and this year’s teams should be especially proud of their results in the Challenge. Thanks to Mr. Bill Walker for serving as the team's mentor - I know this was a rewarding activity for everyone involved. We encourage all of our AIM students to be active in extracurricular activities - the CQA Challenge is an important opportunity for our students to compare this skills against other programs.”

Again, congratulations to both teams. Marquette Team 2 members included  James Hannack, Connor Konicke, Jack Gorski, Jordan Luczaj, and William Reckamp. Marquette Team 1 members included Brian Shank, Joseph Amoroso, Tim Milani, and Chengbin (Henry) Lu. 

To learn more about this contest and read what past participants have thought of the contest, please visit www.cqa.org/investment_challenge.



Sunday, May 21, 2017

Marquette student video on the AIM program

Melissa Gorman created a short YouTube video on Marquette's AIM program


This semester a Marquette student, Melissa Gorman, a Biomedical Sciences major, who also works in the Office of Undergraduate Admissions as a Tour Guide completed a video assignment. 
 AIM video by Melissa Gorman


The Marquette Office of Marketing and Communications took the footage and released the AIM video. Here it is:
https://www.youtube.com/watch?v=0slaTy3y2jc&list=PLiWO5BwmWuI9DtNn5qz31lcqw40xnIlG5&sns=em
  AIM video by Melissa Gorman



We would like to thank Melissa for putting this video together Here is a link to her LinkedIn, if you would like to contact her: https://www.linkedin.com/in/melissa-gorman-63b95ab8


Saturday, May 20, 2017

No Triple Crown Winner This Year – Classic Empire is the Pick for the Preakness!

 142nd Preakness Predictions

The 142nd running of the Preakness will be held on Saturday with a much smaller field than the Kentucky Derby. Although I correctly picked Always Dreaming (#4) to win the Derby two weeks ago, his amazingly low 4-to-5 line is way too rich for me. While I believe Always Dreaming will run near the front and finish in the money, I believe that Classic Empire (#5) will win the second leg of the Triple Crown.  Most experts feel that these two horses have the only chance to win the Preakness; however, I also like a long-shot, Conquest Mo Money (#10) at 15-1 odds.
Related image
Classic Empire

Best Pick: #5 (3:1) Classic Empire.  Classic Empire has a solid trainer in Mark Casse and a great jockey with Julien Leparoux in the irons. Classic Empire was fourth in the Derby and was coming on strong – despite being bumped numerous times throughout the race. Winner of the Arkansas Derby earlier this year and winner of last year’s Breeder’s Cup Juvenile, Classic Empire is a strong closer who will lie back and run down Always Dreaming in the home stretch.  If you believe in smart horses, Casse says this is one of the highest intelligence horses he has ever trained! I like Classic Empire to win the Preakness.

Image result for always dreaming
Always Dreaming, winner of the Kentucky Derby
In the Money: #4 (4:5) Always Dreaming.  Although Always Dreaming is not the next American Pharoah, he is a horse on a hot streak. He has won his last four races (including the Kentucky Derby) by over 23 lengths. The Derby had too many horses and jockey John Velazquez kept Always Dreaming out front on a wet track, so I believe that the 4:5 odds are too rich for me. I just don’t believe he’s going to be headed to the Belmont looking to win the Triple Crown – he's a good horse, but I think Classic Empire will catch him before the wire because Conquest Mo Money will be pushing the pace.


Image result for conquest mo money
Conquest Mo Money
Long-shot: #10 (15:1) Conquest Mo Money. This is my long-shot in the Preakness Stakes field. Conquest Mo Money is the son of one of my favorites, Uncle Mo. CMM is a hard charger out of the gate and has run strong this year - winning three races and placing in two others. He looked like the winner until he was beaten down the stretch in the Arkansas Derby by Classic Empire (I believe the same thing will happen in the Preakness). With a relatively unknown jockey, Jose Carreno, and Conquest Mo Money's owners having to pay a $150,000 supplement to race in the Preakness (since he was not nominated to the Triple Crown series earlier in the year), he is clearly a long shot. Nevertheless, he is a very fast horse, who will run near the front the entire race, and while I think he will hold on to third today - don't be surprised if this long-shot captures headlines.

Good luck!

Friday, May 19, 2017

AIM Class of 2017




AIM Class of 2017

AIM Class of 2017 Annual Report

Class of 2017 AIM Students Delivered Annual Report This Week

On Monday, May 8, 2017, the AIM students in the Class of 2017 presented the performance of the three AIM Funds over the 1-year period they managed the portfolios.

Attending the presentations were Marquette's Chief Investment Officer, Sean Gissal, and Dan Tranchita of Baird Advisors, an important supporter of the AIM program.

Link to the AIM Funds Report

AIM students in Class of 2017






Sean Gissal and Dan Tranchita attended the presentations


Tuesday, May 16, 2017

A current AIM Fund holding: LendingTree (TREE) by Catherine Strietmann: “Will Money Continue to Grow for LendingTree?”


LendingTree, Inc. (TREE, $146.88): “Branches Continue to Emerge and Grow for LendingTree”  
By: Catherine Strietmann, AIM Student at Marquette University


Disclosure: The AIM Equity Fund currently holds this position. This article was written by myself, and it expresses my own opinions. I am not receiving compensation for it and I have no business relationship with any company whose stock is mentioned in this article.

 Summary
LendingTree, Inc. (NASDAQ:TREE) operates an online loan marketplace for consumers seeking loans and other credit-based offerings, using online tools to help consumers find the best loan for their needs. Lending Tree’s online marketplace provides consumers with access to product offerings from different lenders, which include mortgage loans, home equity loans and lines of credit, credit cards, auto loans, student loans, small business loans, and other related products.

• TREE has emerged to be one of the leading marketplaces for online consumer loans, with no end in sight for the continued growth in the promising FinTech industry. Q1 2017 results beat expectations, with the company’s consumer and lender platforms both growing substantially.

• Non-mortgage loans have surpassed 50% of LendingTree’s loan revenue, providing immense diversification benefits for the company.

• Competitive efficiency among marketing channels has driven the growth behind LendingTree’s consumer platform, with 4.9M MyLendingTree subscribers, as compared to 3.3M in Q4 2016.

Key points: Being the AIM Fund’s second highest contributor to return as of 05/05/2017, TREE has proven to be a wise investment with a strong outlook based on the growing FinTech industry, and strong quarterly performance. For the fiscal year end 31 December 2016, LendingTree revenues increased 51% to $384.4M, reflecting an increase in demand for the company’s products and service due to the favorable and growing market.

Continuing with this trend, TREE presented strong Q1 2017 results, outperforming with both mortgage and non-mortgage products.  Revenue grew 40% Y/Y, being $132.5M, above the high end of the company’s guidance ($122MM-$126MM). This was driven by high purchase loan volume, as well as high credit card and home equity performance, with non-mortgage growing 75% Y/Y. The company is positioned to gain market share in the industry with continued product offerings, most recently launching an online auto insurance comparison service in March. The roll-out of products within the non-mortgage segment is expected to continue.

Although higher interest rates will stop refinance mortgage demand over the next several years, LendingTree has a wide product scale and high revenue conversion that will continue to generate organic profit growth. Non-mortgage loans now exceed more than 50% of TREE revenue for the first time since the company was founded in 2008, providing great diversification benefits and lessening risk. A large part of this is due to the acquisition of CompareCards in November 2016, and still the company continues to grow organically. Additionally, online advertising spending by large banks has provided strong growth for LendingTree, and provides an area of business where management expects to expand.

The great momentum for LendingTree has all necessary opportunities to be sustainable, with new branches growing and emerging every earnings release. The company has impressive operating leverage, as well as a brand well known in the marketplace. As interest rates are expected to rise, the online loan market will become more competitive, but LendingTree management claims that it is 30%+ more efficient across marketing channels, including paid search, TV, and display. This sets up the company for continued success in the growingly competitive environment, being able to direct traffic to their business and bring more qualified customers to lender partners.

What has the stock done lately?
Since LendingTree released its Q1 2017 earnings on April 27, 2017, the company’s stock is up 18% ($125.75-$148.55), trading the higher than ever. Equity researchers are increasing price targets to around this positive performance, with targets on average near $160. Drivers behind this growth are deeply rooted in the success of the FinTech industry, and LendingTree’s ability to gain share in a competitive market.

Past Year Performance: In the past 12 months, TREE has increased 122% in value, from $67.14 to $148.75, with a 52 Week High/Low of $150.95/$64.07. Since the initial pitch of TREE in December 2015 at a price of $95.73, the company has experienced great upward momentum in the market due to its ability to effectively grow its consumer base and optimize web marketing. With revenue growing 40% Y/Y in Q1 2017, as well as an adjusted EBITDA margin of 18% improved 130 bps Y/Y, TREE continues to beat street estimates.

Source: FactSet

My Takeaway
Since the initial pitch of TREE in December 2015 at a price of $95.73, the stock has nearly reached its price target of $151.80. However, the Q1 2017 earnings release and the growth of the FinTech market set TREE to far pass this price target. LendingTree holds competitive presence among the online loan industry, with platform such as MyLendingTree that provide a more relationship-driven model for consumers, having a very high operating margin. 

Although interest rate increases will increase competition for LendingTree, the company has a competitive advantage with its marketing strategies in the industry. TREE is positioned well for the coming rate increases, and continues to prove performance for the AIM fund.




Monday, May 15, 2017

A current AIM Fund holding: Exact Sciences (EXAS) by Tim Donovan. "Future Remains Bright for EXAS"

Exact Sciences Corp. (EXAS, $32.10): “The Test Results are Looking Positive”
By: Tim Donovan, AIM Student at Marquette University
Disclosure: The AIM Equity Fund currently holds this position. This article was written by myself, and it expresses my own opinions. I am not receiving compensation for it and I have no business relationship with any company whose stock is mentioned in this article.

This is a re-post following today's Citronresearch.com article about Exact Sciences.

• Exact Sciences Corp. (NYSE: EXAS) is a molecular diagnostics company, which focuses on a non-invasive, cost effective screening to detect early stage colorectal cancer in its target market of individuals above the age of 50.
• EXAS generates its revenue ($99.38MM in 2016) in the United States from the sale of Cologuard, its FDA approved non-invasive colon cancer screen.
• Aetna has agreed to provide Cologuard as a commercial product to its clients who are not enrolled in Medicare. 
• With 135,000 new cases of colorectal cancer in 2016 the demand for a cost effective and accurate screening product is very high.
• A successful marketing campaign for Cologuard has created a spike in SG&A expenses in 2016, but provides EXAS with an opportunity to decrease its cash burn moving forward.  
• 69.5% growth in share price since the beginning of 2017 was a result of over 240,000 Cologuard tests being delivered throughout 2016. This is a 134.5% increase in sales compared to 2015.

Key points:
Exact Sciences currently has one FDA approved product called Cologuard, which generates all of the company’s revenues. Cologuard is a non-invasive colorectal cancer screen based on stool DNA science. This in-home procedure has yielded accuracy of above 90% and has been recently accepted as a more cost effective method to detect colon cancer.

2016 was a critical year for Exact Sciences. Cologuard’s shaky start during 2015 left EXAS in a tight spot moving into 2016. While the 104,000 tests delivered in 2015 showed promise, a report written on cancer screening methods left Cologuard off of the list, and referred to it as an alternative test, resulting in a price drop of over 70%. Fortunately for EXAS the damage caused by this report was rectified, resulting in a more widespread acceptance of Cologuard as a screen for colorectal cancer.

This past year was a period of rebuilding and growth for Cologuard. 2016 SG&A of 223.2MM for 2016, a 31.4% increase from 2015, was in part a result of a large marketing push for their FDA approved screen. This promotion aided in the 240,000 tests delivered in the year. This number of tests represents about 72% of the addressable market, leaving room for new market penetration during 2017. This successful marketing campaign has also given EXAS the opportunity to ease back on marketing expenses resulting in lower cash burn moving forward.

A feature of Cologuard that will drive revenues into the future is the fact that it is a test recommended to be conducted once every 3 years. This repeat usage will not be seen for the next few years, however it will give EXAS the ability to maintain healthy levels of revenue when new market penetration growth slows down.

With strong support from Medicare and an increase in the commercialization of Cologuard by other healthcare providers we see EXAS reaching 80% of its target market so far in 2017. These new partnerships in 2017 will drive its market capture closer to its 100% goal.

What has the stock done lately?
So far this year Cologuard’s performance has driven the share price of EXAS up 69.5% to a near 52 week high. Much of this growth can be attributed to the release of 2016 Q4 and annual performance data. Cologuard’s 2016 growth reached 134.5% increasing to over 240,000 delivered tests growing from 104,000 tests in 2015. 

On top of this in March Cologuard has received commercial coverage by Aetna, a large healthcare insurance and service provider in the United States. This new partnership has expanded Cologuard’s market coverage to 80% of the addressable market from their pervious 72% coverage. With new partnerships being formed Exact Sciences has set the goal in front of themselves to reach close to the 100% coverage mark in 2018.

Past Year Performance:
EXAS has increased nearly 300% in value since this time in 2016. Much of this can be explained by a significant decrease in share price at the beginning of 2015 followed by strong growth during the 2016 year. Positive test results and an increase in the acceptance of the non-invasive test have given EXAS the opportunity to climb out of the $5.36 per share hole that it found itself in at the beginning of 2016. EXAS currently sits near the top of its 52-week high of $32.

 Source: FactSet

My Takeaway
Cologuard’s strong performance throughout 2016 has driven a large rebound in Q1 of 2017. With robust growth in the number of tests being delivered and new relationships being developed to further the product’s exposure, EXAS could cater to nearly 100% of the addressable market by the end of next year. Despite no new products in the foreseeable pipeline this growth teemed with a decrease in marketing expenses will provide EXAS with an opportunity for increased margins, lower cash burn, and continued growth throughout 2017. We still like Exact Sciences in the long-term.


Source: Yahoo!Finance