Tuesday, May 24, 2016

Congratulations to the AIM Class of 2016 on Their Graduation From Marquette University


Marquette University's AIM Class of 2016 Graduated on Sunday, May 22, 2016

Education is the best provision for old age.
-Aristotle
I have never let my schooling interfere with my education.
-Mark Twain
If you aren’t fired with enthusiasm, you will be fired with enthusiasm.
-Vince Lombardi


AIM Class of 2016


The AIM Class of 2016 was a special group --- it was the first class with two program tracks: asset management and private equity / banking. On Sunday more than 30 AIM students participated in Marquette University’s graduation ceremonies (along with several others who graduated in December). This group of students is the 11th class to graduate from the AIM program.

By all measures this has been another successful year. The students in the AIM Class of 2016 had meaningful internship experiences and they soon will be starting their careers at various financial firms across the globe.  Also, many of them are busy preparing to take the Chartered Financial Analysts (CFA) Level I exam on the first Saturday in June. Like all of the other AIM classes before them, I know they will do well – and I have truly enjoyed working with them.


The students in the Class of 2016 inherited three investment portfolios: the small cap domestic equity; international equity; and fixed income fund. These students worked hard and generated good results in the funds they managed. The students encountered unique challenges as the financial markets experienced two major peaks and valleys during the past year – and the energy stocks saw dramatic swings as the price of oil dropped nearly 70% during their tenure in managing the funds. International stocks remained especially tricky to manage during the past year given the large swings in currencies and the phenomena of negative interest rates. Nevertheless, they maintained their composure and managed the AIM Funds as true professionals.

As always, it has been a rewarding year for me working with the students in the AIM program. In addition to being intellectually curious and hardworking, the Class of 2016 was deeply committed to the responsibilities associated with administering the student-managed funds. Despite the ongoing uncertainty of the global investment climate, we are confident that the AIM Funds will continue to provide invaluable opportunities for learning as students in future classes apply their hand to managing a portion of Marquette’s endowment funds.

Marquette University Commencement 2016 
Congratulations to the students who graduated at Marquette's Commencement on Sunday, May 22, 2016. We wish not only to recognize the achievements of our graduates, but also to acknowledge parents and others for their cooperation and support.

This was a highly talented group of students who worked hard right up until the end of their senior year. While some of these students received significant honors and awards, all of them are special and have unique talents. They worked exceedingly hard during the past two years since they were admitted to the AIM program and we wish them all best of luck.

The following table contains information about the AIM students in the Class of 2016.












Sunday, May 22, 2016

It's Graduation Day at Marquette University and Scott Schroeder Will Make a $100 Match for Each Senior Gift!

Marquette University Senior Challenge - $100 Match from Scott Schroeder!

Scott H. Schroeder
Scott H. Schroeder, Bus Ad ’92,
 Grad ’96, Law ’96
Board of Trustee member, alumnus and good friend of the College of Business Administration and the AIM program, Scott Schroeder, a founding partner at Balyasny Asset Management, is matching $100 for every senior who makes their class gift.


·         Take a look back at your time at Marquette and what that has meant to you. Many of the memorable experiences that you had would not have been possible without the resources that were made available to you. Gifts made to Marquette in the past few years have directly benefited you in your time here.

·         Marquette University is funded by three major sources: tuition, annual giving and endowment. While tuition costs are significant, it is important to note that tuition dollars represent only 68% of the actual cost of education per student. Annual giving makes up the difference. It is the financial lifeblood sustaining the university’s day-to-day mission of delivering a transformational education characterized by excellence, faith, leadership and service. Finally, the endowment represents gifts of invested funds that produce annual income for a wide variety of purposes, including student financial aid. Endowment provides critical financial stability, ensuring a source of financial support year after year, but it does not cover daily expenses like tuition and annual giving does.

Main image




Saturday, May 21, 2016

COBA Dean's Graduation Reception and AIM Room Open House Today

Congratulations to the graduating seniors in the AIM program on your accomplishments to date. Today you are encouraged to join your fellow College of Business Administration peers and their and families at the Dean’s reception in the Sculpture Garden (next to the COBA) from 1pm-3pm.


You and your families are also welcome to stop by the AIM Room anytime between 2pm-3pm for an informal open house with Dr. Krause and AIM faculty. I hope to see you today and at graduation on Sunday.


Friday, May 20, 2016

Marquette's Conor Connelly Placed 4th (out of 138 entries) in the CFA Society of Pittsburgh's Personal Finance Plan Competition

The CFA Society ofPittsburgh sponsored their 2nd annual “Collegiate Personal Finance Plan Competition” and seven Marquette AIM students entered. They were: Conor Connelly, Ryan Johnston, Joel Kretz, Mark Lakowske, Patrick Sanchez, Patrick Schulz, and Ryan Woo.

Conor Connelly
Conor Connelly
Nine colleges and 138  college students participated in the 2016 competition which required them to write a personal financial plan to help them achieve their financial and career goals. The CFA Society of Pittsburgh reviewed all of the plans and awarded cash prizes for the top financial plans. The results were announced in April and Conor Connelly was recognized as the author of one of the top submissions. 



Place
Name
School
1st
K. Kulkarni
University of Pittsburgh
2nd
J. Gordon
University of Pittsburgh
3rd
B. Lacomis
University of Pittsburgh
4th
Conor Connelly
Marquette University
5th
S. Welsh
University of Pittsburgh
6th
J. Pettner
Penn State Erie, The Behrend College
7th
S. Russell
Clarion University
8th - TIE
R. Heitlinger
University of Pittsburgh
8th - TIE
E. Nehuerz
Allegheny College
10th
S. Bannerman
Carnegie Mellon University


Dr. David Krause, the director of Marquette’s AIM program, said "We are pleased for Conor - finishing in the top 10 out of 140 submissions is an honor. However, I know that by going through the practice of creating a financial plan for life after college graduation that all of our students have taken an important step towards controlling their financial future."

Dr. Krause added “We’d like to thank the Pittsburgh CFA Society and, in particular, Gene Natali, for allowing our students to compete. This was our first year in the competition and it was a very worthwhile effort. We look forward to participating in the future.”





Thursday, May 19, 2016

141st Preakness Predictions

The 141st running of the Preakness will be held on Saturday with an amazingly low 3-to-5 line for Nyquist, who is shooting for his second Triple Crown win. He starts from the number 3 position. The second favorite and Kentucky Derby runner-up, Exaggerator, comes from the 5 position. Most experts feel that these two horses have the only chance to win the Preakness.

The only other horse that also ran in the Derby is #6, Lani, with huge 30:1 odds. The erratic Japanese horse finished 9th in the Derby.  The other eight runners in Saturday's Preakness were all kept out of the Kentucky Derby - and there are a couple of interesting well-trained horses in the group. Maybe as important will be the weather - keep your eye on the sky as rain is predicted which could add a wild card to the race!

Image result for Nyquist and Exaggerator derby

Best Horses: #3 (3:5) Nyquist and #5 (3:1) Exaggerator. Nyquist won the Derby by running a great race and received the due credit that comes with it; however, Exaggerator was also strong and demonstrated that he can compete with Nyquist. Exaggerator is a deep closer and likely will pose the only challenge to Nyquist, but Kent Desormeaux will need to move him forward much earlier this time. In my mind it's toss-up between these two horses.


Long-shot: #6 (30:1) Lani. This is my long-shot in the Preakness Stakes field. Lani is truly a loose cannon and deservedly earned that reputation at Churchill Downs. He put on a show during most of the week and was politely called 'overly excited' – for example, when the horses were called to the post for the Derby, Lani was blinded and separated from the others in the paddock. He was very skittish on the track, but he’s a gifted horse who could completely fool everyone --- and he even has the potential to win the race… want a super long-shot - they try a wager on Lani!

Image result for lani derby horse

72nd AIM Student Equity Update by Clare McNamara. Delphi Automotive (DLPH, $68.47): “A Global Leader in the Dynamic Auto Supplier Chain"


Delphi Automotive (DLPH, $68.47): “The Benefits of Being a Trendsetter”
By: Clare McNamara, 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

Delphi Automotive PLC (NYSE:DLPH) is a vehicle component manufacturer and provider of electric and electronic, powertrain and safety technology for automotive and commercial vehicles. The business is split into three segments including Electrical/Electronic Architecture, Powertrain Systems, and Electronics and Safety.
• Fuel innovation is finally starting to take off and become more common, and Delphi is the company to follow for it.
• What the first recent surge in auto-sales post-recession means for Delphi this coming year.
• ‘Active-safety’ is trending upward, which will help Delphi’s top-line.
• May not be the best time to buy DLPH because of high multiples, but a great time to hold.

Key points: Delphi Automotive PLC is one of the front-runners when it comes to fuel innovation and technology for automotive and commercial vehicles; however, just like the rest of the auto industry, they took a hard hit in January when U.S. auto-sales missed estimates for the end of 2015. This brought into question the forward-looking health of the auto markets in Western Europe, North America and China.

While Delphi is a large company, they are not the largest and understand their position in the industry, which is why they focus on only a few segments within the industry. However, the ones they do focus on, they do well, like their more than 20% market share of auto market for electrical distribution and connection systems and 10% market share in the Powertrain segment area. They are small enough to make dynamic changes in the market, with there still being room to capture more market share, but large enough to supply to auto makers like Volkswagen and General Motors.

‘Active-safety’ is a new area for the auto industry, and one that Delphi has already started to become an established leader in. The technology includes things like auto-stops when the car gets too close to the one in front of it, called a collision avoidance system, and early warning signals to drivers like when they are changing lanes. Delphi’s Electric and Safety Technology segment has been the fastest growing segment for them in 2015, growing around 50%. There is only room for this segment to grow too, since they recently acquired the software systems company, Ottamatika.

Although DLPH has a bright future with plenty of opportunities for growth, it is still part of the auto industry. The auto industry was hit very hard by the recession in 2008, and is still having a rough recovery with guidance being brought down recently. Delphi is very exposed to the cyclicality of the industry and is still not at it’s cheapest with a P/E of 13.35 in 2015. However, this is estimated to decrease in the coming years as earnings increase.

What has the stock done lately?
Like other auto stocks, DLPH has since rebounded slightly from the January drop, where it was trading at a low of $55.59; it is now trading around $70. However, the company itself has been doing quite well in earnings, beating estimates by about 1.5% in both February and May.

Past Year Performance: Delphi Automotive underperformed during this 12-month holding period by 4.61%. The beginning of the period was fairly stable, with the firm steadily appreciating October through December. This streak ended in January when guidance for revenues and operating margins were decreased from previous estimates, along with the U.S. auto sales greatly missing forecasts for the previous year. Delphi rebounded from this sell off by reporting in February that they beat earnings estimates by 1.46%.



Source: Google Finance

My Takeaway
While Delphi may not have the strongest auto market to work with right now, with the possibility of North American and European markets rolling back and the growth slow down in China. Still, I think those may only be speed bumps in the larger picture for Delphi, which seems to have a real growth story on its hands. I believe that the ‘active-safety’ segment could be a major winner for them, not only now, but in the future as well with driverless cars becoming more and more of a reality. I wouldn’t say the P/E and other valuations like a DCF are cheap enough to render this a buy, however, it is a solid hold for the AIM International portfolio.


Wednesday, May 18, 2016

71st AIM Student Equity Update by Clare McNamara. Belmond (BEL) "Well-Positioned for Strong Growth with New Management"

Belmond Ltd. (BEL, $9.59): “The Best is Yet to Come”
By: Clare McNamara, 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

Belmond Ltd. (NYSE:BEL) is a luxury hotel and travel operator headquartered in Bermuda, but has hotels, trains, river cruises, and one stand-alone restaurant strategically positioned in exotic destinations around the globe.
• Belmond beats earnings estimates for FY2015 for the first time in what feels like forever for investors – and beats again for Q1.
• New management has new ideas that are just starting to maximize margins and increase earnings – what do they have to say about it?
•  What Belmond is doing on the ground to implement their new ideas.
• BEL could be heading to new 50-day highs, most recently breaking its 50-day average in a bullish manner.

Key points: Belmond remains 'in-play’ as H. Roeland Vos, the new CEO, has not even been with the company for a full year yet and is already making a major impact on earnings. Vos is an instrumental part of the remodeling of Belmond and understands the need to put ‘boots on the ground’ research in this industry. He has already visited every single hotel, train, and river cruise in the past few months in order to understand each how unique business works depending on the location. The new COO, Philippe Cassis, has taken the same stance as Vos and visited the properties in under three months since he was named COO. This shows how influential of a leader Vos is in fostering a culture within the company, which will be essential moving forward.

In the most recent earnings call, Vos indicated that the company has raised guidance for RevPAR growth in FY2016 to around 3% to 7%. This is because they are not only planning on aggressive growth strategies for the company, but estimating they will be implemented within the year as well. These strategies include driving top-line growth and bottom-line results at existing properties, increasing brand awareness, and broadening their global footprint. His aggressive strategy has already begun to work with earnings, beating estimates by 400% for Q4 2015 and 75% for Q1 2016.

Part of this is due to Vos reorganizing the company’s structure to make it flow better, by breaking down previously existing silos in revenue management and sales related functions. Vos has put a lot of trust into Cassis, having all of these functions now report to him. However, this has proven a successful bet for Vos with RevPAR already up by 9% over the past quarter due to this, helping them increase the earnings for that quarter. This is just the beginning of this resource realignment and will lead to even further expansion of EBITDA margins in the coming year.

On top of all this, BEL is set to grow top line revenue because of a few different projects they are taking on at certain locations. They are attempting to increase their capacity without increasing costs. Some locations have increased their sizes by a few rooms and suites while others have created completely new suites – for example, they have moved around employee spaces in order to capitalize on special ocean views for new suites without having to expand the property.

What has the stock done lately?
Since Vos took over as CEO in September 2015, the stock is still down by ~6%. It was trading around $10 in September 2015 and is almost back at that point. However, it has broke it’s 50-day moving average twice within the past few months in a bullish manner. If everything goes as planned for BEL, there could be some major momentum in the stock.

Past Year Performance: BEL has had a tough year with turnover in two major management roles. The stock is down ~33% from where it was a year ago. The changes in management had an especially bad effect on its performance in January right before earnings, where it reached its trough at $7.68. However, it has been on the rise since then, with less volatility.


Source: Google Finance

My Takeaway
Vos has obviously made his voice heard and it is beginning to echo through the core of the business with strategies beginning to change. These changes have been fast-tracked and are already beginning to have a positive effect on earnings, soaring past expectations the past two quarters. Although the stock is moving in a very bullish manner recently, I think there is still time to get in this stock and that the expansion of the company is just beginning – the best is yet to come.



Tuesday, May 17, 2016

Dr. Yahr is being congratulated by Dr. Akers for 38 great years at Marquette! Throws out first pitch at Brewers-Cubs game.



Dr. Robert Yahr was recognized by his colleagues at Marquette today. He'll be throwing out the first pitch at the Brewers-Cubs game!


Drs. Yahr and Akers (some of Marquette's best)



First pitch of the night!


Loved all the 0's on the board!