Information Technology18.8% Financials16.1% Health Care14.9% Consumer Discretionary14.0% Consumer Staples8.0% Industrials5.3% Energy4.6% Telecommunication Services3.8% Materials2.9% Utilities1.3% Real Estate0.5% Cash and Cash Equivalents9.7%
|Weighted Average Dividend Yield||1.8%|
|Weighted Average Forward Est. P/E||16.1x|
|Median Market Capitalization||$14.1 B|
|Weighted Average Market Capitalization||$143.1 B|
|Active Share (vs. S&P 500 Index)||86.4%|
|% OF PORTFOLIO|
|Gilead Sciences, Inc.||4.9%|
|Thermo Fisher Scientific, Inc.||4.4%|
|JPMorgan Chase & Co.||4.1%|
|Wal-Mart Stores, Inc.||3.2%|
|International Flavors & Fragrances||3.0%|
|China Mobile Ltd. - ADR||2.9%|
Gilead Sciences is a biopharmaceutical company that focuses primarily on antivirals, cardiovascular conditions, and respiratory diseases. Gilead has grown rapidly since its 1987 founding, with results driven in recent years by the company's strong HIV treatment franchise. The company's HIV drugs Viread, Truvada and Atripla are safe, efficacious and easy for patients to take (Atripla, for example, simplifies a once burdensome treatment regiment to one pill once a day). Unfortunately, HIV/Aids continue to be a growing problem in developed and developing countries all over the world. The good news is that if HIV patients are diagnosed and treated early enough, Gilead's products can help these patients live healthy and productive lives for decades.
Gilead has recently expanded into a limited number of new treatment areas, both through internal development and acquisitions. Gilead's pipeline includes potentially compelling products for the treatment of HIV/Aids, resistant hypertension, and other areas of patient need.
Thermo Fisher manufactures and distributes consumables, lab equipment, analytical instruments, software and services that are used in health care and life sciences research and diagnostics. The company’s portfolio of products includes instruments for mass spectrometry, elemental analysis, sample preparation, and air-quality monitoring. Its diverse customer base includes pharmaceutical and biotechnology companies, hospital and clinical diagnostic labs, universities, research institutions and government agencies, as well as environmental and industrial companies.
Thermo Fisher was formed in November 2006, with the merger of Thermo Electron and Fisher Scientific. The merger combined the technological breadth of Thermo’s product line with the distribution and purchasing convenience of Fisher Scientific’s Catalog distribution business. The current company is divided into two segments, Lab Products and Analytical Technologies. Within Lab Products, the Fisher Catalog and the company website provide a one-stop shop with an extensive selection of routine lab products. The Analytical Technologies segment sells advanced technologies and workflow solutions directly to lab scientists.
Investors are concerned about overall R&D spending as Pharma and Biotech companies merge and look to cut costs. While Thermo Fisher’s sales will have some sensitivity to an R&D spending slump, the majority of TMO’s sale are tied to everyday lab operations, which help insulate the company from end-demand weakness.
Apple designs, manufactures, and markets personal computers, mobile communication devices, and portable digital music and video players. It also sells a variety of related software, services, peripherals, and networking solutions.
JPMorgan is a diversified financial company with banking, investment banking, private banking, asset management, securities services and credit card operations. The entity is the result first of a merger between JP Morgan and Chase Manhattan and then the acquisition of BankOne by JPMorgan Chase.
The diversified nature of JPM gives it some characteristics that are different from a traditional bank. Investment banking and securities processing are impacted more by the level of activity in the financial markets than by economic strength or interest rate movements. Revenue growth in asset management and private banking is mostly a function of growth in assets under management. Credit card operations are similar to traditional banking and can benefit from the economies of scale that have resulted from combining JPMorgan Chase and BankOne.
JPM believes that its various business units can improve the profitability of each other. Loans to potential investment banking clients have the potential to help win investment banking deals and increase loan volume. There may be synergies between asset management, private banking and investment banking. However, realizing the synergies between these businesses is not easy or automatic.
Jamie Dimon is the Chairman and CEO of JPM. Dimon is one of the most respected and highly thought of managers in the financial services sector. Prior to Dimon becoming CEO, JPMorgan Chase had not delivered the results that investors hoped for. The performance of the company in navigating the liquidity crisis and credit problems associated with the housing downturn and recession of 2007-2008 appears to have been extremely favorable relative to other industry leaders and could position the company for market share gains and high profitability in the future.
Facebook hosts a social networking service that allows its members to share content among their various social circles, and to restrict access through specified criteria. It is currently the pre-eminent global social platform, with ample room for international penetration growth, especially in emerging markets. It also has great scope to monetize its user base globally and to enjoy greater market share of online advertising, especially on mobile devices.
Alphabet, Inc. is a newly founded holding company for the Google group of businesses. Under the new operating structure, its main Google business will include search, ads, maps, apps, YouTube and Android and the related technical infrastructure (the 'Google business'). Businesses such as Calico, Nest, and Fiber, as well as its investing arms, such as Google Ventures and Google Capital, and incubator projects, such as Google X, will be managed separately from the Google business. The new legal and operating structure will be introduced in phases over the coming months and when finalized, Google anticipates that it will result in two reportable segments for financial reporting purposes, with the Google business presented separately from other Alphabet businesses taken as a whole. Accordingly, Alphabet will report its results under this new structure commencing with its Q4 earnings release and its Annual Report on Form 10-K for the period ending December 31, 2015. The company was founded on 2nd October, 2015 and is headquartered in Mountain View, CA.
Wal-Mart Stores, Inc. operates retail stores in various formats around the world. The company operates its business through three reportable segments: Walmart U.S., Walmart International and Sam's Club. The Walmart U.S. segment includes the company's mass merchant concept in the U.S., operating under the Walmart or Wal-Mart brand, as well as walmart.com and also offers financial services and related products, including money orders, prepaid cards, wire transfers, check cashing and bill payment. The Walmart International segment includes numerous formats of retail stores, restaurants, wholesale clubs, including Sam's Clubs, and various retail websites that operate outside the U.S. This segment operates units in three major categories: retail, wholesale and other which consists of numerous formats, including discount stores, supermarkets, supercenters, hypermarkets, retail websites, warehouse clubs, restaurants and apparel stores. The Sam's Club segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and also offers brand name merchandise, which include hard goods, some soft goods and selected private-label items and brands in five merchandise categories namely grocery and consumables, fuel and other categories, technology, office and entertainment, home and apparel and health and wellness. Wal-Mart Stores was founded by Samuel Moore Walton and James Lawrence Walton on July 2, 1962 and is headquartered in Bentonville, AR.
Citigroup is a diversified financial services holding company that provides a broad range of financial services to consumer and corporate customers around the world. The Company's services include investment banking, retail brokerage, corporate banking, and cash management products and services.
Citigroup's strategy focuses on banking trade flows between emerging markets, banking the affluent customer in emerging markets, and restructuring its U.S. retail bank. Citigroup has a global franchise with the ability to capture the banking revenues associated with trade flows as well as handle the cash management business of corporations. Banking the global emerging consumer is an attractive business with good returns and also provides Citigroup with the necessary deposits to fund its Corporate bank. Lastly, the realignment of the U.S. business and redeployment of that capital into higher return businesses with the potential for faster growth could lead to a business with a better than industry returns over time.
International Flavors & Fragrances, Inc. creates flavor and fragrance used in a wide variety of consumer products. It operates through two segments: flavors and fragrances. The flavors segment compounds are sold to the food and beverage industries for use in consumer products such as prepared foods, beverages, dairy, food and sweet products. The fragrances segment is comprised of fine fragrances, beauty care products, detergents, and household goods. Major fragrance customers include the cosmetics industry, including perfume and toiletries manufacturers, and the household products industry, including manufacturers of soaps, detergents, fabric care, household cleaners and air fresheners. The company was founded in 1958 and is headquartered in New York, NY.
China Mobile is the incumbent wireless provider in China and is the world's largest wireless telecom operator with over 760 million mobile subscribers. The company holds licenses to operate nationwide 2G (GSM) and 3G (TD-SCDMA) services. China Mobile's dominant 2G network covers over 98% of the population. In its 3G network China Mobile continues to gain market share, having added over 100 million customers in 2013.
Towards the end of 2013, China Mobile was the first wireless telecom carrier in China to receive a 4G (TD-LTE) network license. The company is focused on building the infrastructure to support the 4G (TD-LTE) technology and have half a million base stations around China that will deliver continuous coverage to all cities and urban areas by the end of 2014. China Mobile may grow revenue and operating profit through driving higher data usage and 4G penetration, increasing minutes of use, managing churn, and continuing to add subscribers.
As the incumbent telecom, China Mobile benefits from significant economies of scale and a mature, cash generative, core franchise. Over the next few years capital expenditure should decrease and free cash flow generation should ramp up in a company that already pays an attractive dividend.
Basic Value34.3% Consistent Earners48.9% Emerging Franchises7.1% Cash & Cash Equivalents9.7% Large Cap (> $12 B)64.6% Mid Cap ($2.5 to $12 B)25.8% Small Cap (< $2.5 B)9.6%