1.	Who is the investor?

2.	The strategy

3.	The portfolio

4.	Brief description of the companies

5.	att attribution

6.	Stock description

6.1.	American Vanguard Corp. (AVD)

6.2.	Ensco International Incorporated (ESV)

6.3.	Overseas Shipholding Group Inc. (OSG)

7.	Technical analysis

"Who is the investor?

The investor is a thirty years old man who is willing to invest into stocks for three months. I told him, that stocks are too risky for such short period (I personally would prefer money market instruments or bonds). However he saw an unique opportunity after the huge decline of the stock market between end 2007 and march 2009 and after the change of the trend since march 2009. So we made a compromise – to invest into the stocks in a conservative way. The investor also knows that he can loose some money, however he wants the possible losses to be as small as possible.

The strategy

To find good stocks for a conservative investment, several fundamental criteria were chosen:
• Market capitalization over 200M USD – to avoid risky small companies
• Low P/E ratio (less than 15), low P/BV ratio (less than 1,5): especially the low P/BV gives us a margin of safety in the way, that a company sold for (almost the same as) the value of its assets can be sold even if it does not perform well (the assets can be sold and we do not buy speculative future profits but the real today’s assets)
• The company needs to pay an dividend (such companies are more stable)
• The company had a 10 years revenue growth at least 5% - it is a stable and well performing company
• The current ratio is at least 2 – to avoid cash problems in the short period (important during the financial crisis
This defensive strategy is a bottom-up one, value-oriented. However, it is strongly probable that the most stocks which pass the screening will be from similar – defensive sectors. None of the stocks is going to be overweighted.

The portfolio

After the screening ), 10 following stocks were chosen from 3 sectors: Basic materials, transportation, Energy:

(tabulka)

The average Beta of the three sectors is 0.75: the portfolio is going to be more conservative than S&P. Also we can expect lower growth or lower decline.

Brief description of the companies

American Vanguard Corp. – a holding company in the chemical industry, operates in many countries all around the world
PH Glatfelter Company - manufacturer of specialty papers and engineered products
Reliance Steel & Aluminum - metals service center company
United States Steel Corporation - steel producer with production operations in North America and Europe
Ensco International Incorporated - engages in the drilling of offshore oil and gas wells in domestic and international markets by providing its drilling rigs and crews under contracts with major international, government-owned, and independent oil and gas companies
NuStar Energy LP - operates in three segments: storage, transportation, and asphalt and fuels marketing
Patterson-UTI Energy, Inc. - a provider of contract drilling business
Nordic American Tanker Shipping Limited - owns and runs huge oil tankers"

Čistý text dosahuje cca 3 stran. Práce obsahuje tabulky.
Práce z předmětu Investment course - University of Northern Virginia, Praha.