TAC Trust Co.

Alex Hebert

Tiffany Romano

Connor Coyne

I. Introduction:
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Here at TAC Trust Co. we pride ourselves in being the top investment company in

Dudley, MA. We are a team of three investors Alex, Tiffany and Connor who work together to

make sure the investments are in the best interest of the company and our clients. The goal of our

company is to gain the trust of all our clients and beat the S&P 500 in returns. We initially

started out with $3,000,000 in cash to invest in the stock market with an additional $3,000,000

margin that we could use. By the end of April 14, we finished with a value of $3,186,844.01,

which clenched us first place in the Nichols College Investing project. As of April 14th, our

company had invested in 14 diversified stocks. Our company finished with a total return of

6.23%. The S&P 500 had a return of 3.69% which we were able to nearly double in a three

month span. For each company that we picked, it was vital that we look into the past

performance, Beta levels, P/E Ratios and other financials to determine whether or not a stock

was safe to invest in.

As a company, we devised an investment strategy that would keep us in safer blue chip

stock for the long run. We invested about $2.5 Million which is 84% of our company's cash into

blue chip stocks. We left behind $500,000 which is 16% of our cash to make day trades with

more risky stocks. Our investment strategy overall was successful. We held numerous blue chip

stocks to keep our capital steady and allowed us to not have to worry about the companies

tanking because they were relatively low beta stocks. The smaller day trades allowed us to make

our higher returns so we could improve the total return of our company's investments. As of

April 14, 2017 our company TAC Trust Co. was invested in 14 diversified stocks. The stocks we

were invested in were Apple Inc. (AAPL), Amazon Inc. (AMZN), Bristol-Myers Squibb Co.

(BMY), Buffalo Wild Wings Inc. (BWLD), Citigroup Inc. (C), CVS Health Corp (CVS),

GlaxoSmithKline (GSK), Hershey Co (HSY), Lockheed Martin Corporation (LMT), Southwest

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Airlines Co. (LUV), Marathon Petroleum Corp. (MPC), Norwegian Cruise Line Holdings LTD

(NCLH), Netflix Inc. (NFLX), Pfizer Inc. (PFE). For the purposes of this paper we will be

talking about the companies that gave us the highest returns.

II. Economic Conditions

Throughout the months that we were investing the stock market overall did well. Below

is a graph that depicts how the S&P 500 was doing while we were invested into the stock market.

With the most recent election happening it was predicted that the industrial, defense and banking

sectors were going to increase. When it came to focusing on what sectors to invest in we made

sure we were diversified through the different sectors and industries. Since we started invested

the S&P 500 has had a return of 3.69% which is fairly decent for a short amount of time.

Comparatively the Dow Jones performed at near similar rate. In the 3 months that we were

working on our investment portfolio, the Dow Jones saw an increase of 3.77% and followed

closely to the S&P 500. The NASDAQ had a 6.44% increase for the same 3 months.
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On political note, the stock market has been affected by the recent presidency of Donald

Trump. Right before our investing started this semester, the Dow Jones hit a historic mark,

surpassing 20,000 points. Some of his decisions have had positive impacts on the market, and

some not so much. The tough part of the new presidency is the unpredictability factor that comes

along with it. This causes infrequencies in the market, regardless of positive or negative affects.

When it comes to international news, there has been a lot of tension between the United

States, Syria, and North Korea. All of these tensions have lead to an increase in the defense

business. The tension of North Korea threatening war upon the United States has ramped up the

defense industry. Not only threats from North Korea but President Trumps promise to build back

up the military is ramping up the defense industry as well. 1One piece of news that helped the

defense industry was the two missiles that the United States had sent over to Syria in retaliation

for them using Chemical weapons on their people. The day after this happened the defense

stocks such as Boeing, Lockheed Martin, and Raytheon all increased.

III. Major Holdings:

Amazon (AMZ):

We purchased Amazon on February 6th. The price per share at the purchasing time was

$805.76, and we bought 200 shares. As the semester continued to progress, we saw that Amazon

was doing well and ended up buying shares on three other dates. On February 21st, we purchased

600 shares at a price of $847.36. We purchased 100 shares on April 5th at a price of $923.53.

Our final purchase was on April 12th for 100 shares at $899.86, bringing our total amount of

holdings to 1,000 shares. At the time the stock market closed on April 13th at 4:30pm, Amazons

stock price was $884.67. On this holding, we received a profit of $32,768. This profit contributes

1Starr, Barbara, and Jeremy Diamond. Trump launches military strike against Syria, 7 Apr. 2017.
Accessed 23 Apr. 2017.
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to 17.5% of our total gains. The amount of money we allocated of our total $3 million was

$851,907.

When we initially analyzed companies to invest in our portfolio, we used a number of

different methods to determine the most suitable stocks. These include looking at financial

records, reading news articles, and just having a basic understanding of what the company does

and how they fit into their industry. Amazon fit nicely into what we were looking for because

they are very a well-known blue chip company that provides solid (and consistent) stability for

our portfolio. Amazon falls in the service sector of the retail industry, and they mainly focus on

their online retail domain. Their website offers a plethora of products ranging anywhere from

comic books and clothing, to TVs and car tires. They were established on May 28th, 1996. For

many years they struggled to make a profit, which led many investors to believe that they would

dissolve rather quickly. This, as many now see, is the opposite of the truth and making a profit is

not their top priority. 2 In recent years these numbers have increased. The retail industry in

general has seen a significant shift toward online-only selling channels.

Since Amazon is strictly online (for now), their competitors consist of both online

retailers and brick and mortar stores ( who also have online counterparts). One of the biggest

companies we chose to look at for against Amazon is Wal-Mart. They fall into the same industry

and have a strong presence in both online and brick and mortar locations. In an attempt to

compete with Amazon, Wal-Mart has been able to anticipate the future of the retail industry and

have jumped in the same ring as Amazon. Their competitive strategy mainly consists of buying

out as many e-commerce companies as they can. Walmart's latest buys include women's

vintage-inspired online retailer Modcloth.com for an estimated purchase price in the range of $50

2 Jim Edwards, Amazon profits show how few people understand the way the company works
http://www.businessinsider.com (Jan. 30, 2015)
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and $75 million, outdoor recreational retailer Moosejaw ($50 million), IAC/InterActiveCorp's

(IAC) Shoebuy.com ($70 million), outdoor furniture retailer Hayneedle ($90 million) and of

course what started it all - Lore's Jet.com ($3.3 billion).3

One of the first things that we did when researching stocks, was to do some technical

analysis and look at their past performances. This way we can start to see patterns and determine

when the best time to purchase stocks would be. The following chart shows the company

performance for the last year:

From this chart we can see a couple of things. Over the past year, Amazon has seen a

solid steady increase in their stock price. Throughout this time we can see different peaks and

valleys. Right after we started investing we saw that their price dropped off a decent amount for

that given day or week, so we thought it was good time to invest.

Another way we selected suitable companies for our portfolio was through fundamental

analysis. This allows us to look at the financial statements that companies are required to release

3Lindsay Rittenhouse, What Walmart is Doing to Slay the Monster that is Amazon,
www.thestreet.com (April 23, 2017)
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so we can make an accurate assessment of how each company stands, and if it seems to be

growing. Amazons total revenue for the 4th quarter of 2016 was $43.74 billion. The 52-week

range for Amazon is 599.20-923.72. When we purchased Amazon stock the price per share was

at $805.76. This was substantially lower than 52-week high so we thought that they had a decent

amount of potential growth. Amazons earnings per share is listed as 4.90. This is a solid number

when comparing it to other stocks. It could be slightly better, based on the price of their share,

but it was still worth investing in based on this number. The beta for Amazon is 1.43. A beta

closer to 1 follows the market more closely. A beta that is higher than 1 swings differently than

the market and is potentially more risky. Based on their beta of 1.43, Amazon is slightly risky

but not risky enough to not be a stable investment in our portfolio. Amazons PE ratio is 183.43.

This means that investors are anticipating more growth based on the industry average. The

current ratio for Amazon is 1.00. This means that Amazon is in decent financial health, relative

to meeting its long-term and short-term obligations. The final financial information we took into

consideration was the debt-equity ratio. Amazons debt-equity ratio for the 4th quarter of 2016

was 3.32. This is a high ratio and means that Amazon has taken on a lot of debt to finance its

growth.

The third way to analyze a company for our portfolio was to keep up on current news

stories and developments within the company. One thing that Amazon has announced over our

time investing was their new Amazon Go stores. These stores are technologically advanced and

are completely without employees. Customer go into stores and swipe in with their Amazon

account. Each item they select will be automatically charged to their account upon exiting the

store. This development is currently still in its beta stage out in Seattle and has sparked a lot of

conversation on the future of Amazon. The service is called Amazon Go. It uses machine
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learning, sensors and artificial intelligence to track items customers pick up. These are then

added to the virtual cart on their app. If they pick up an item they later decide they don't want,

putting it back on the shelf removes it from their cart.4 Amazon could continue on with these

stores or see if the technology is worth selling to another company who may have better use for

it. When news like this reaches the public, stocks generally increase and are a time to invest or

hold your stock in that given company.

Vertex Pharmaceuticals (VRTX):

As a company purchased Vertex Pharmaceuticals on March 28th. We purchased 4,800

shares of Vertex stock at a price of $89.84. We invested a total of $431,232 and by the end of the

next day we received a total of $526,512. On March 29th we sold all 4,800 shared at a price of

109.69. This gave us a total gain of $95,280. On March 29th we shorted about 5000 shares of

this stock at 110.23 and covered the shares at a price of 110.08 which gave us a gain of $750.

This was by far our greatest earner for the entire investing period contributing to our total return

amount by about 51.4%. Vertex was one of our greatest investments because we timed it

perfectly news that was released the next day about a drug they were testing.

Vertex is in the Biotechnology industry within the Healthcare and Life Sciences sector.

Vertex is a company that develops and discovers experimental drugs for diseases around the

world. They are located in Boston, Massachusetts and have had multiple successes with the

experimental drugs they have come out with. Over the past few years they have been focusing on

making new drugs to cure Cystic Fibrosis. Vertex has one major competitor, and thats Celgene

Corporation. Celgene is another pharmaceutical company that is within the Biotechnology

4Elizabeth Weise, Amazon just opened a grocery store without a checkout line,
www.usatoday,com (Dec. 5, 2016)
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industry. They focus mainly on cellular therapies and are currently trading around 122.26. 5This

month they received notice from the FDA that another company had released a generic version

of the drug they had that treated Multiple Myeloma. This is bad news for the company because

this means, instead of people buying the name brand drug, they will be buying the generic

version which ultimately cuts down on the amount of revenue that Celgene will get because of

the generic drug.

When we invested into this stock we were looking at multiple different factors. The

largest factor we were looking at is what were they coming out with. There had been talk that

Vertex was seeking FDA approval for a new Cystic Fibrosis drug. The drug was supposed to to

enhance the lung function of people who suffer from Cystic Fibrosis.This was news that we

knew would drive the price of Vertexs stock up. We decided to invest into the company on

March 28 in the morning. 6 On March 28th in the afternoon, Vertex Pharmaceuticals released

positive data on the new clinical trial they were doing for Cystic Fibrosis patients. The company

was in a phase 3 clinical trials for an experimental Cystic Fibrosis drug. On March 28th, 2017

the company had released news that people who had taken the drug had a 4% improvement in

lung function than people who had taken other drugs. This is what caused stockholders to see a

future in Vertex Pharmaceuticals and caused them to invest.

When looking at this stock we were very hesitant at first. In the past Vertex has had a

turbulent ride. The 52 week range for Vertex Pharmaceuticals is 71.46-117.19. This is what

made us the most nervous about the company. In one year, Vertex has swung 45.73 points. Now

granted it is a very good thing that they were able to increase that much. However, the part that

5 Celgene. Celgene Notified of ANDA Filing for POMALYST, 3 Apr. 2017. Accessed 23 Apr.
2017.
6Cystic Fibrosis Foundation. Positive Results from Two Phase 3 Clinical Studies of Tezacaftor
(VX-661) and Ivacaftor , 28 Mar. 2017. Accessed 28 Mar. 2017.
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troubled us was knowing we were investing for about two months. We went back and looked at

two month intervals on the graphs to see how the company was doing. We decided to take the

risk and it paid off for us. The EPS for Vertex Pharmaceuticals is -0.46 which troubled us a little

bit as well. We were mainly looking for companies that were in the positive EPS range. Vertex

had a solid beta of 0.75 which means they are a little less risky of an investment. Vertexs

quarterly earnings for the past quarter was $458.71 million and had total debt of $840.76 million.

Vertex has a Debt to Equity ratio of 0.68. The current ratio for Vertex is 36.56. Currently Vertex

does not have a P/E ratio because they have lost some money in the past. We looked at all of

these different financials when looking into the company and ultimately decided to invest into it.

Southwest Airlines (LUV):

Southwest airlines has been one of our more consistent holdings. We made one clean

purchase and have been holding it since then. We decided to buy into Southwest Airlines

because we wanted to spread our money around diverse sectors. We figured logistics would

benefit our portfolio; major blue chip stock at a fair price. Our team purchased Southwest

Airlines on February 6th, 2017 at 10:30am. We bought 3000 shares at a price of $53.29 which

totals an investment of $159,870. We have made a fair gain of $7,020 in total, and a 4.39%

return on the stock.

Southwest is a major Airline company founded in 1967 and is the top low cost carrier in

the US. This company employs thousands of people and carries the most passengers. Currently,

Southwest has reported strong earnings since the beginning of 2017. According to Thomson

Reuters, Of the 19% of S&P 500 companies that have reported so far, nearly 76% have
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exceeded analysts' earnings estimates, above the 64% historical average.7 Starting this month,

Southwest has started a new system where paper tickets would not be used, and will start

handing out electronic versions. This new system costs millions of dollars, but in the end they

will be saving money by not using paper products.

A huge competitor of Southwest has recently fallen out of the race. United Airlines is a

major flying company and theyve recently been the talk of all news stations for a large

discrepancy with a passenger they had. This will diminish the attraction of many United flyers

and will result in a huge profit loss. Southwests main competitor is American Airlines Group.

American Airlines is a vast airline company who merged with US Airways a few years ago. The

merging of the two companies made a major impact on their name and management as they

progress.

Our team desired to hold an airline company in our portfolio because it adds definition.

Airlines are always being used no matter what circumstances and tickets are always being sold.

Therefore, holding a major airline is a plus. Southwest has a 52 week low of $35.42 and a high of

$59.68. We were attracted to these numbers because we purchased it just around six dollars

under the 52 week high which proves the stock has been consistently rising and sticking within

those two numbers of the high and low. Whereas American airlines is a riskier investment as

well as it having a very low 52 week low compared to its high, The EPS of SouthWest is $3.53.

This is a good sign because the EPS is positive and shows the company is doing well. Our team

tends to aim towards companies with a beta below 1.0 to bypass the risk. Southwests beta is a

1.09 which proves it to be slightly riskier than the other holdings in our portfolio. In other words,

7 Earnings Come in Thick And Fast. (2017, 4 22). Retrieved 4 23, 2017, from The Street:
https://www.thestreet.com/story/14097349/1/week-ahead-earnings-come-in-thick-and-fast-in-a-middling-
first-quarter-reporting-season.html
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because the beta is greater than 1, it indicates that the securitys price is more volatile than the

market. The stocks P/E ratio is 15.76. This shows that the companys future is bright.

Southwests current ratio is below 1.0. The companys current assets of $4,498,000, and current

liabilities of $6,844,000 make a ratio of .65. The liabilities are higher than the assets, this means

that the company possibly has problems meeting short term obligations. Although, it is better

than having a higher ratio, and is not a serious problem. Total liabilities equal $14,845,000 while

total equity is $8,441,000. Furthermore, the debt equity ratio is 1.76. Therefore, this company

has strong debt finance growth.

The graph below indicates Southwest airlines symbolizing a bar chart for the past month.

Since mid March, the daily high has been steadily increasing, which in turn means the daily low

is increasing as well. There are no major increases or decreases in this company which proves it's

less risky reputation. Earnings are up in the top graph and shows that this company pays

dividends monthly. Since the purchase of this stock, Southwest has increased our portfolio by

4.39%.
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Apple Inc. (AAPL): 65,165

Apple was another major blue-chip company that we invested. Our initial purchase of

Apple shares was on February 6th, with 500 shares at $130.33. They are one of our longest held

companies and have netted us a profit of $5,970. Our overall allocation of capital for Apple was

$65,165, being one our lowest investments.

Apple is a major tech company that falls into the consumer durables industry. They are

apart of the consumer goods sector, and are most well-known for their high end tech products

such as the iphone, macbook, ipad etc. They were founded by a man named Steve Jobs and have

become one of the biggest tech giants in the world.

One of Apples biggest competitors today is Samsung. They compete with Apple head to

head by adopting their speed-to-market strategy. Their mobiles phones are their biggest product,

and keep update with new technologies to gain an edge on Apples iconic Iphone. The Galaxy S8

is debuting soon, and it contains some interesting features that could combat the Iphone 8, which
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is expected later this year. What features in the new Samsung phone are responsible for the rise

in costs? First, the S8 is the first smartphone capable of gigabit-LTE speeds. "Gigabit LTE is

very much the marquee specification for 2017 flagship smartphones," said Wayne Lam, principal

analyst of smartphone electronics at IHS Markit. Lam noted that it will be interesting to see what

Apple will do with LTE speeds on its new 10th-anniversary iPhone because the company usually

lags behind its competitors in that area. Other features include the new infinity screen which

stretches the OLED display to the edges of the phone.8 It will be interesting to see how long

Apples dominance will remain with such aggressive competition. For now, Apple looks to

remain in a safe place, to provide stable growth to their stockholders.

Before investing in Apple we had to analyze their financials. Their revenue for the 4th

quarter of 2016 was $78.35 Billion, over a $30 billion increase from their previous quarter. Their

52-week range 89.47-145.46. Our initial investment was at $130.13, which gives us potential

growth. The beta for Apple is 1.21 which shows some slight risk compared to other companies,

but not too risky to fit into our portfolio. The PE ratio is 17.03. The current ratio is 1.23. This is

a solid current ratio because it means that they pay their short-term and long-term inm a good

time period. The last ratio, the debt-to-equity ratio, is 1.50. This again is a good ratio because it

shows that Apple takes on some debt to finance growth but not too much.

One piece of news that emerged during the holding of Apple was the announcement of

Apple (Red). This product was a partnership with the (Red) organization, which is aimed at

8Natalie Walters, Heres How Much the Samsung Galaxy S8 Costs to Make,
www.thestreet.com (Apr. 23, 2017)
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combating AIDS. The announcement of this new product was appealing to investors and had a

nice impact on the price of their stock. 9

Dryships (DRYS):

Dryships was not a company that we held for long. They were one of our short day trades

that we made. Throughout the entire investing period we day traded Dryships 4 times. Every

time we did we were successful and were able to make money off of them. The first day trade we

did was on February 7, 2017. We purchased 100,000 shares at $5.46 for a total of $546,000. In

10 minutes the stock price rose to $5.56 and at that point we sold off the 100,000 shares for a

profit of $10,000. The second day trade we made was on February 8th, 2017. We purchased

100,000 shares at $4.04 for a total of $404,000 being invested. Within the next hour the price had

risen to $4.15, so we sold all 100,000 shares. This day trade made us a profit of $11,000. The

third day trade we did was on February 22, 2017. We purchased 85,000 shares at $2.63 for a total

of $223,550 being invested into the company. Within a half hour we sold all 85,000 shares for a

price of $2.72. We were able to profit $7,650. The fourth and final day trade me made on

Dryships happened on February 23, 2017. We purchased 100,000 shares at a price of $2.16 for a

total of $216,000 being invest into them. Within the next hour we sold all 100,000 shares at a

price of $2.34. With this day trade we were able to make $18,000 in profit off of the day trade. In

total from day trading DryShips we were able to make a total of $46,650 total.

DryShips is a Greek shipping company that has been on the decline since 2008. They are

in the Water Transport/Shipping industry within the Transportation and Logistics. They are

located in Athens Greece and have previously been successful in the shipping business until

recently. Lately the company has been doing poorly due to internal issues such as boat repairs.

9David Phelan, Iphone 7 (Product) Red Review: A Surprisingly Exciting New Color that Looks
and Does Good, www.independent .co.uk (Apr. 5, 2017)
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One larger competitor that DryShips has to worry about is Ardmore shipping corporation. They

ship freight containers around the world for international companies. They are currently trading

at $6.95 per trade. Since DryShips has been on the decline, Ardmore has been able to move in

and steal some of the business that DryShips had. 10Recently on April 7, 2017, Ardmore stock

price increased by 7.05% which is a big jump for a small cap stock such as Ardmore.

When investing in this stock we knew it was not for the long term. Based on the past

performance of the stock we knew it would be a stock that we could day trade. DryShips is a

very volatile stock and when we were investing in them the stock had a beta of 3.14. They were

not a long term stock based off the beta alone. We decided to day trade this stock and it worked

out well for us. 11Some of the most recent news for the company is that they recently added four

new vessels to the fleet they already have. It is projected that the four new vessels could add $4.3

million in revenue to DryShips which they desperately need. This could potentially bring

DryShips out of the struggle they are currently in. Instead of refusing business they could take on

more so they dont have to turn down money.

Investing in DryShips was quite possible one of the most risky investments we had due to

the issues they were running into at the time. DryShips has a 52-week range of 1.53 - 8,908.81.

This was a tell tale sign for us to make this a day trade stock. For a company to have a difference

of 8,907.28 is extremely bad and is reflective of how the company is doing. The EPS for

DryShips is -8,755.57 which is poor. This means the company is making poor decisions with the

money they do have, they should be putting the money into things with with have a greater

return. When it comes to the beta value of DryShips it shows they are a highly volatile with a

10Equities Staff. Ardmore Shipping Corporation (ASC) Soars 7.05% on April 07, 7 Apr. 2017.
Accessed 23 Apr. 2017.
11 Ebiefung, Will. DryShips Inc. (DRYS): Four Acquisitions, Strong Baltic Dry Index, and Sector
Momentum, 30 Mar. 2017. Accessed 23 Apr. 2017.
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beta of 2.36. This was one of the key factors that told us to day trade this stock. With a beta that

high, the price of the stock is going to vary quite a bit and made it possible for us to make quite a

bit of money in a short amount of time. The revenue of DryShips in the last quarter was $9.65

million which is a sharp decrease from a few quarters ago when they had revenue of $23.77

million. They had a total debt of $16.81 million. When a company has more debt than they have

revenue that can be a major issue, especially if the company is making poor decisions. One of the

key financials is the Debt to Equity ratio is .33 which is one of the financials that says the

company is not risky. The current ratio for DryShips is 3.59 which means they pay off the short

term and long term obligations in a timely manner. DryShips was our only day traded stock that

was able to make us quite a bit of money.

Alphabet Inc (GOOG):

Another one of our major holdings was Google. We initially purchased 100 shares of

Google on February 6th when the share price was $797.71. We purchased another 200 shares on

February 8th at a share price of $809.90. We sold our 300 shares on March 1st when we saw the

price shoot up to $835.00. We saw that Googles stock went down a couple points to $831.68, so

we purchased another 600 share on April 3rd. Due to a company issue, which will be discussed

later, we ended up selling our shares in Google on April 7th, when we saw the price dropping

down to $824.25. For the first set of shares that we purchased we saw a profit of $8,750. The

next 600 shares that we purchased we ended up seeing a loss of $4,458. Our total profit that we

saw from Google was $4,292, contributing to 2.3% of our total gains. In the first set of shares the

allocation of capital was $241,751. For our second set of shares we held, the allocation of capital

was $499,008.
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When looking for companies to invest in for our portfolio, Google was something that

came to mind almost instantly. Our portfolio consists mainly of blue chip stocks, with a few

risky stocks scattered throughout. We relied on companies like Google, Apple, and Amazon to

provide us with solid stability during the time of our investing. Google fit nicely into this

categorization. Google is massive company that is best known for its revolutionary search

engine. Google is a multinational, publicly-traded organization built around the company's

hugely popular search engine. Google's other enterprises include Internet analytics, cloud

computing, advertising technologies, and Web app, browser and operating system development.

They were founded in 1998 by two Stanford University students. 12 Google is part of the Internet

industry and falls under the technology sector. Technology is a sector that we paid a lot of

attention to based current market trends, shifting their focus to this field. Google in particular

(like a lot of other innovative companies), is always looking towards the future. To be successful

it is necessary to look for the next big thing to keep stockholders happy, and this was one of the

reasons we initially invested in Google.

As Google continues to diversify its brand, it continues to rack up potential competitors

in new arenas. A major long-time competitor that Google has faced (directly with their web

services) is Yahoo. Yahoo competes directly with Google as a search engine platform that has

also diversified its company in terms of adding features for their users (Yahoo mail, finance,

sports etc.). Yahoo has always remained in Googles shadows, lacking a true brand image or

purpose. Googles brand mission is well-known and well-established: to organize the worlds

information and make it universally accessible and useful.Yahoos brand mission isnt so clear

actually it isnt to be found. An official mission statement doesnt exist on its site, and the

12 TechTarget, Google (the company), searchcio.techtarget.com

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statements I did uncover elsewhere were varied and often conflicting.13 As far as direct

competition goes, Google seems to be on top. Different companies will threaten Google, because

they are diving into new markets, but they have established a big enough brand to remain far

above water for the time being.

Like the companies that we invested in, we performed a full analysis on Google before

investing in them. The very first thing we did was looked at their past performance, particularly

in the past year. To this we analysed charts showing their prices for the prior year. Over the past

year that have substantial growth, rising over 200 dollars in stock price. When our investing

began this semester, Google had just seen a sharp drop in share price. This was one the many

criteria points we used to determine which stocks to buy.

The next analysis we needed to make was the fundamental analysis. This is the gathering

and evaluating of financial information. There set ratios and numbers that we felt were more

important than others in determining the value of each stock we invested in. The first thing we

looked at was overall revenue for the most recent quarter, to make sure that the stock was

performing well, financially. For the 4th quarter of 2016 Googles total revenue was $26.06

billion, having a 13.9% increase over their 3rd quarter revenue. Next we looked at the 52-week

range to see where they were trading. This range was 672.66-874.42. We purchased the stock

when the share price was just below 800 dollars, meaning they had a decent amount of potential

growth. Googles total earnings per share is 28.77, which is a very good number compare to their

total share price. The next number we looked at was the beta. This will determine a companys

risk. Googles beta is a 0.97. This is an attractive beta because it means that the company trades

very similarly to the market, making it a less risky investment. This is perfect because our

13Knowledge @ Wharton, A Tale of Two Brands: Yahoos Mistakes vs. Googles Mastery,
knowledge.wharton.upenn.edu (Feb. 23, 2016)
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primary investing strategy is to have more stable blue chip stocks. Google's PE Ratio is 29.86.

This determines how much investors are willing to pay based on earnings per share. It changes

based on industry and can determine if a company is expected to grow or not. The next ratio we

looked at was the current ratio. Googles current ratio is 6.29. This means that they are able to

pay its short-term and long-term rather quickly, making its financial health in good shape. This

could be looked at as being too high in some cases as well. The last ratio to be looked at is the

debt-equity ratio. Googles debt-to-equity ratio is .205. This means that Google does not leverage

a lot of debt for their financial growth and they are a particularly low risk investment.

The last thing that we looked at in terms of analysis before investing in Google were

articles and current related news that helped us make a decision. One of the first things we found

when were researching companies was an article that gave tips on some of the best stocks to

invest in for 2017. The market value of Alphabet is $544 billion, so its hard to fathom it getting

much bigger. But the owner of Google, YouTube and other tech businesses hasnt peaked.

Recent product launches include the Pixel smartphone and Google Home (a virtual personal

assistant). Add those products to Alphabets other businessesincluding thriving sales of online

ads, apps and cloud-based servicesand you get a firm that analysts believe will generate 19%

profit growth in 2017. At 20 times estimated earnings, the stock doesnt look expensive.14

These articles were very valuable to us in the beginning of our semester, because they gave good

insight on where to begin. Another piece of news that was released in favor of Google, was that

they had received almost double advertising revenue then their next highest competitor,

Facebook. News like this is beneficial to Googles stock price, leading to a short-term spike.

Observers of social media and other online services companies have considered revenue

14 Kiplinger, 8 Stocks to Buy Now for 2017, www.kiplinger.com

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generated from advertising a key to the company's long-term success. 15 After purchasing

shares for the second time we actually used news to sell our shares in Google before we lost too

much money. Information surfaced regarding allegations towards Googles compensation. It was

directed toward their women employees, and stated that they actually paid women less money

than men. The lawsuit came about after the US Labor Department conducted an investigation on

their compensation data. At first Google was reluctant to give up the data, which was against the

law. 16 When we heard this news, we were quick to act on selling our shares. Google has not seen

dramatic losses from this instance (especially compared to recent incidents from companies like

United Airlines), but we had to show some investing intelligence in this situation.

Bristol-Myers Squibb Co. (BMY):

Bristol-Myers Squibb Co. is one of our holdings that we did not know too much about

before we invested into them. We purchased 1000 shares at $51.04 on February 6th, 2017 at

10:39 am. The total investment is $51,040, which is 2% of our portfolio invested. Consistently

through our holding of Bristol-Myers, which we have held the entire course of the time, It has

never went under $50.00, and has made us a profit of $2,450.

Bristol Myers Squibb Co. captured our attention not because of its financials but because

it has a unique name. Our portfolio mainly consists of large, popular businesses that are familiar

to everyone. Bristol Myers is a large pharmaceutical company headquartered in New York City,

and falls under the healthcare and life sciences sector. They mainly manufacture prescriptions for

major diseases, including HIV/AIDS. Bristol Myers and Squibb were merged to form Bristol-

Myers Squibb in 1989.Ten years later, President Clinton awarded the company with A medal

15 James Rubin, Google Bests Facebook for Ad Revenue; Microsoft Widens use of Teams
Service - Tech Roundup, www.thestreet.com (March 14, 2017)
16 Sam Levin, Google Accused of extreme gender pay discrimination by US Labor Department,
www.theguardian.com
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entitled National Medal of Technology, meaning they were recognized nationally for their

technological achievement. Her words speak, for extending and enhancing human life through

innovative pharmaceutical research and development and for redefining the science of clinical

study through groundbreaking and hugely complex clinical trials that are recognized models in

the industry."17 We usually want to invest in trustworthy companies that havent been involved

in con scandals. One thing that was very interesting to us as we researched the company a little

more was that they engaged in accounting scandals. In the early 2000s, they would account for

inventory that was offered to buyers so their inventory sales would increase; this is called

channel stuffing.

Bristol Myers largest competitor is Pfizer Inc, which is also one of the worlds largest

pharmaceutical firms that creates countless medicines. We also were holding Pfizer in our

portfolio and its doing really well with a profit of $5,960. A competitive advantage they have

over Pfizer is the fact that Bristol specializes in cancer research. They have been spending the

majority of their budget to find the cures for cancer and are simply crushing their competition in

aspects of the cancer issue. They also pay dividends to their stock owners as they continue to

develop helpful drugs.

Pharmaceuticals are key when investing. We believe that there is always a market for

pharmaceuticals especially with new diagnostics every day as well as the national desire to cure

deadly diseases. Financially, Bristol Myers has our interest. It has a steady 52 week range of

$46.01 and $77.12. Since it has been in our portfolio, the stock price has stayed steady in the mid

to high 50s and has showed slow but steady growth, whereas Pfizer has a 52 week range that is

very short, and not a high price. Bristol Myers has a positive EPS standing at $2.65. it has

17National Medal of Technology and Innovation https://www.nationalmedals.org/laureates/bristol-

myers-squibb-company 07, 7 Apr. 2017. Accessed 23 Apr. 2017.
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desired to hold an airline company in our portfolio because it adds definition. Airlines are always

being used no matter what circumstances and tickets are always being sold. The companys beta

is just under 1.0 at .97 which proves it is slightly less risky; which attracts us significantly.

Bristol Myers did not make us a ton of money but the company is very trustworthy and , is not a

risky stock, which is truly what we look for in companies. Because it is low beta, we got what

was predictably measured; a lower return. This seemed to help us because the little profits and

steps we take to creating our portfolio allowed us to have a portfolio value that surpassed our

beginning budget. The average P/E ratio for the pharmaceutical sector is 24.1. The P/E ratio for

Bristol Myers stands right around 24.1 at 20.18, which is right around the perfect P/E ratio for a

Smaller cap stock. The balance sheet of this company is outstanding. Bristol Myers holds current

assets of $13,704,000 and current liabilities of $8,841,000. This gives us a current ratio of 1.55.

The current ratio could always be better, but the assets of the company clearly exceed the

liabilities which is positive in the eyes of investors. Bristol Myers has total liabilities of

$17,350,000 and an owners equity total of $16,177,000 which gives us a debt equity ratio of

1.08. This decodes as a fairly good debt equity ratio because as they continue to grow, there will

be less debt to keep moving forward. The total liabilities of the company do not completely

outstrip the equity total, which is also a good sign. If the ratio were to be over two, it would

mean that Bristol Myers is using a lot of its capital to fix debt.

IV. Portfolio:

SWOT Analysis

Strengths: When evaluating our performance as a team there were several things that

contributed to the success of investing company. One main component of our success was our

overall investment strategy. We initially played it safe and invested in several blue-chip stocks.
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This allowed us to obtain stable growth, and help us remain one of the top teams in the class. As

time went on, we strategically selected some riskier stocks to make day trades and short sales,

which helped us make the final push into first place.

Another strength that our team had was trust and solid communication. Wknew each of

our own strength and used them in sync to be successful investing team. When there was as stock

that we thought would be good to invest in, there was a quick communication among our team

and the trust to allow each member to make their own decisions. This strength also translated

into overall work ethic; especially when it came time to meet deadlines, and achieve specific

goals.

Our next strength was our ability to anticipate certain trends in the market, based mainly

off of current news. We were able to keep up on current news topics throughout the project and

make adjustments accordingly. An example of this would be following news regarding new

developments in a company, or any investing advice received from the various sites we followed

this semester. The release of Amazon Go was a contributing factor to purchasing more shares in

their stock. Google receiving a lawsuit was a good example of us realizing a potential drop in

stock price, and selling our stocks to minimize loss.

Weakness: One of the weaknesses that our team had was an initial lack of stock market

knowledge. Our team consisted of one finance major, one finance minor, and one member that

took the course as an elective. We all had some experience with a finance course, but the

knowledge varied and put us at an initial disadvantage to some of the other teams who had a

more extensive knowledge of investing strategies.

Another one of our weaknesses could have been looking too far into external or internal

news stories or factors that emerged throughout the semester. As something positive was
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released about a company we thought it may have a different impact on a given company than it

actually did. For example when we first started, we thought that because it was around

Valentine's Day , that flower companies may have an increase in stock price, when really it

wasnt as dramatic as we thought, netting an overall wasted investment.

Another related weakness was not reading far enough into certain news stories. There

were things that happened to companies, or potential opportunities, that we missed out on

because we werent always paying attention to the news.

Opportunities: Our biggest opportunity throughout the entirety of the project was definitely our

day trades as well as our short sales. These were the most risky transactions we made, but they

netted us the most profit, and eventually pushed us into first place. Going forward, this would be

a major opportunity as an investing company.

Another opportunity is that as investors, we are able to invest in any company we want,

which allows us to learn more about strategies and how we work as a team to result in the most

profit possible. So, we have the power to do whatever we want and possibly step out of our

comfort zone. We did this by investing into riskier stocks and looking into companies that are

less popular and well known.

Threats: Considering we started off as an investment company who views strategic investing as

simply pooling all of our budget into less risky stocks, we slowly started to veer away from that

thought process. After almost 2 months of safe investing, we brought in higher beta stocks and

held them until the end, if they were doing well. Due to the fact that we werent used to investing

into high risk stocks, we had to get used to working with them and learn how to make these

stocks benefit our value. For example, DryShips was bought and sold four times because it

showed quick downfall at first but was quickly making us money as we continued to make it a
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day trade. If we hadnt watched the stock as much as we did then we had the potential to lose a

lot of money.

Another threat during the course of this game includes every team in our class.

Specifically Remy Fletchers team, the instructor, and Georgeanne the teaching assistant. These

teams, including TAC Trust Co., have all been in the top 3 or 4 during the investments project. It

was a close race since the start of the game. Luckily, TAC Trust co. came out in first place in the

last few days of the race. Remys team held the first spot for a good chunk of the game, and held

onto really advantageous companies who gave them the profit they needed. Another threat was

the instructor. She has the most investment experience and is very knowledgeable in finance.

However, we learned that investing is not just about strategy but it is about luck as well. The

market can be very sporadic and sometimes we cant predict it no matter how many fact we have

gathered. Georgeanne was also a threat to our investing endeavors because she is also

knowledgeable in investing and has played the game before, so she knows how to work out

glitches and use techniques that the game offers.

Ethical Recommendation:

For those who wish to hire an investing service company, we would strongly recommend

the TAC Trust Co. for a few different reasons. Compared to the other teams in the investing

project, TAC Trust Co. outperformed all of the other companies based upon overall gains. This

alone shows our investing knowledge coming together. As a team we think we started at a

disadvantage based on the previous knowledge all of us had coming into this project. One of our

members has little to no investing intelligence, but was able to learn throughout the process.

With the help of the course, and the team as a whole, our knowledge was enhanced and we were

able combine all of our assets to make a successful group. Another reason that you should hire
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our service is due to the quality of our overall investment strategy. We made sure that our

investments were safe but effective. We wanted to build up trust with our clients while building

up our name in general.

As you can see in the graph above, the S&P 500 is the blue line and the other lines

correspond to all the major holdings that were mentioned above. As the graph depicts most of

our stocks that we held beat the S&P 500. Not only did we beat the S&P 500 return overall, but

we were able to double the return of the S&P 500. Overall we are a great company to invest

with, we make sure our clients money is in safe hands and make sure they are able to achieve all

the financial goals they came to us with.

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