6 glenville st | greenwich, ct 06831 | [email protected] | | phone: 203.532.7003 | fax:...

6 Glenville St | Greenwich, CT 06831 | [email protected] | www.ncamadvisors.com | phone: 203.532.7003 | fax: 203.532.7014

The CAN SLIM® Methodology

John M. WildernExecutive Vice President

[email protected]

Hugh L. BoyleVice President203.532.7003

[email protected]

NorthCoast Asset Management:Our Heritage

Manage over $1 Billion in client assets. Exclusive agreement with Investor’s Business Daily to offer domestic and international

CAN SLIM® methodologies to institutional and retail communities. Current offerings include seven separate account portfolios and one public mutual

fund. Three separate account portfolios that allow full tactical shift between 100% equity

allocation and 100% cash allocation.

NorthCoast is based in Greenwich, Connecticut and was founded in 1988 by Paul Dean, Rick Semels, Harry Suber, and Brent Elam. Our expertise lies in our unique ability to research and construct systematic and tactical investment strategies.


The CAN SLIM® Methodology

System of stock analysis introduced by William O’Neil, founder of Investor’s Business Daily newspaper, and author of the best-selling book: “How to Make Money in Stocks.” O’Neil carefully analyzed the 500 top-performing stocks dating back to 1953 and identified 7 characteristics they all shared:

C = Current earnings per share: should be up 20% or more.

A = Annual earnings increasing: should be up 25% or more each year for 3 years.

N = New: new product, new service, and/or new management; also the stock price should be at a new high.

S = Supply and demand of shares: look for optimal combination to take advantage of price advances.

L = Leadership: buy stocks that are industry leaders, not laggards.I = Institutional sponsorship: large institutions and mutual funds should own it and be

increasing stake.

M = Market direction: 3 of 4 stocks follow the market direction, so invest during bull market trends.

Sample Stocks Include: Wynn Resorts (WYNN), Apple (AAPL), Skyworks Solutions (SWKS)


CAN SLIM® by NorthCoast

Dual Approach: Macro (NorthCoast trend-following) and Micro (CAN SLIM® stock selection)

Macro Approach

NorthCoast Trend-Following: proprietary modeling system analyzes Russell 3000 moving averages, market volume, confirmation/distribution patterns, and relative strength to determine prudent allocation to stocks vs. cash.

Portfolio Construction: 0 to 30 stocks with 3%-4% allocation to each position.

Increase or decrease equity allocation as much as 1-2 stocks per trading session.

No buys implemented if CAN SLIM® stocks are not available.

Micro Approach

Analysis of CAN SLIM® factors such as Investor’s Business Daily Composite Ranking and SMR Ranking, Earnings Growth, ROE, Volume, Institutional Ownership, and Relative Strength.

Daily screening and analysis on over 6,000 stocks.

Sell Discipline: maximum 8%-16% loss target per position, depending on expected volatility of individual stock.

Profit Taking: for every 25% gain, sell 25% of position.

New Account Special Handling: new accounts funded with cash can take up to 3 months to achieve desired allocation target; each individual account treated separately.


2008: A Case Study in the Benefit of Cash Scaling


Cash Scaling and CAN SLIM®

Performance: 2001-2010

*See Appendix

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Total

Thru 12/31/10

CAN SLIM®

Investment Program11.5% 1.8% 54.2% 30.7% 12.8% 9.2% 11.6% -13.2% 9.0% 17.4% 248.0%*

S&P 500 -11.9% -22.1% 28.7% 10.9% 4.8% 15.5% 4.9% -37.5% 23.5% 15.1% 10.8%


Capture Ratio Analysis

A Capture Ratio measures the performance of the CAN SLIM® Investment Program vs. the S&P 500 in both positive and negative market periods. The following results observe monthly data for the life of the CAN SLIM® Investment Program and highlight the most important facet of our tactical asset management approach. On average, the strategy has returned 110% of the market’s positive return in favorable months while sacrificing less than half of the S&P loss in unfavorable months.


CAN SLIM®: 3 Portfolio Options

• Objective: Capital Appreciation• Maximum 100% exposure to

stocks• Designed for investors looking to

maximize return usingCAN SLIM® Methodology.

• Objective: Growth & Income• Maximum 75% exposure to

stocks• Designed for growth-oriented

investors who prefer lower volatility than an all-equity portfolio.

• 25% laddered bond component utilizes fixed-income ETFs.

• Objective: Modest Growth & Income

• Maximum 50% exposure to stocks

• Designed for risk-averse or retired investors who seek a low-volatility equity and income portfolio.

• 50% laddered bond component utilizes fixed-income ETFs.

CAN SLIM® Investment Program Lifestyle Portfolio: Growth & Income Lifestyle Portfolio: Balanced


CAN SLIM® Lifestyle Portfolios:Growth & Income and Balanced

2002Jun30-Dec31

2003 2004 2005 2006 2007 2008 2009 2010Total

Thru 12/31/10

CAN SLIM®

Investment Program-0.9% 54.2% 30.7% 12.8% 9.2% 11.6% -13.2% 9.0% 17.4% 202.2%*

CAN SLIM®

Growth & Income1.2% 39.5% 23.1% 10.3% 5.3% 10.1% -6.9% 7.1% 12.5% 149.2%*

CAN SLIM®

Balanced3.2% 25.7% 15.9% 7.6% 4.1% 9.3% 0.0% 5.0% 9.1% 110.9%*

*See Appendix


CAN SLIM® International by NorthCoast

Dual Approach: Macro (NorthCoast trend-following) and Micro (CAN SLIM® stock selection) Macro Approach

NorthCoast Trend-Following: proprietary modeling system analyzes MSCI EAFE moving averages, market volume, confirmation/distribution patterns, and relative strength to determine prudent allocation to stocks vs. cash.

Portfolio Construction: 0 to 30 stocks with 3%-5% allocation to each position using ADRs.

Increase or decrease equity allocation as much as 1-2 stocks per trading session.

No buys implemented if CAN SLIM® stocks are not available.

Micro Approach

Analysis of CAN SLIM® factors such as Investor’s Business Daily Composite Ranking and SMR Ranking, Earnings Growth, ROE, Volume, Institutional Ownership, and Relative Strength.

Daily screening and analysis on over 700 stocks with operations across the globe.

Sell Discipline: maximum 8%-16% loss target per position, depending on expected volatility of individual stock.

Profit Taking: for every 25% gain, sell 25% of position.

New Account Special Handling: new accounts funded with cash can take up to 3 months to achieve desired allocation target; each individual account treated separately.

11

Traded and researched by the same management team behind the NorthCoast CAN SLIM® Investment Program

Available to the public January 2011


CAN SLIM® International Model Performance: 2001-2010

*See Appendix

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Total

Thru 12/31/10

CAN SLIM®

International-10.3% -4.4% 30.0% 21.4% 23.6% 5.3% 34.9% -14.2% 30.8% 8.4% 189.4%*

MSCI EAFE -33.1% -21.8% 38.1% 17.2% 11.3% 23.2% 12.9% -46.5% 23.2% 5.3% -9.0%

S&P 500 -11.9% -22.1% 28.7% 10.9% 4.8% 15.5% 4.9% -37.5% 23.5% 15.1% 10.8%


Appendix


Benefits of a SeparatelyManaged Account

• Tax Control – client owns stock at his/her basis & can tax manage at year-end.

• Efficient Buy Strategy – gradually ease into market to take advantage of optimal buy points.No “turnkey model” approach.

• Performance – unlike mutual funds, no need to hold cash for redemptions.Ability to hold 100% cash if market dictates.

• Transparency – client will see portfolio and transactions.

• Customization – ability to eliminate “sin stocks” or duplicate holdings.

• $100,000 minimum.


NorthCoast Asset Management Officers

Paul E. Dean, ChairmanMr. Dean graduated from Georgia Institute of Technology in 1966 with a B.S. degree in Industrial Engineering and earned an MBA from Harvard University in 1968. While at Harvard he co-founded Berkley Dean and Company, which today is a subsidiary of NYSE listed W.R.Berkley (ticker: BER). In 1972, Mr. Dean left Berkley and has since been involved in researching, developing and implementing trading strategies based on a trend following philosophy including partnering in 1976 with the late Richard D. Donchian, who was a major pioneer of the diversified, trend following method of investing. Mr. Dean co-founded NorthCoast Asset Management in 1988.

Daniel J. Kraninger, PresidentPreviously Mr. Kraninger was Senior Vice President of GE Private Asset Management (GEPAM) a $2.5 billion money management subsidiary of GE Capital. His responsibility at GEPAM was directing their Private Client Group - a team that advised and managed money for over 1,500 high-net worth clients. Prior to GE, he served as Senior Vice President of O’Shaughnessy Capital Management (OCM), a $1 billion Greenwich investment adviser and mutual fund manager that he helped establish in 1996 with founder, Jim O’Shaughnessy. Before OCM, Mr. Kraninger worked at Merrill Lynch as a member of the 1994 JET Program and he is a graduate of Villanova University in Philadelphia.

J. Richard Semels, Portfolio ManagerMr. Semels graduated from the University of Connecticut in 1964 with a B.A. degree in English. Mr. Semels began his securities career in 1974 when he joined Salomon Smith Barney. As Senior Vice President-Investments he soon was involved in researching, developing and implementing trading and risk management systems. In 1980, he founded Atlantic Associates -- a CTA that specialized in quantitative futures strategies that later evolved into the creation of NorthCoast Asset Management in 1988.


NorthCoast Asset Management Officers

Brentin C. Elam, Portfolio ManagerMr. Elam graduated from the University of Cincinnati in 1969 with a B.S. degree in Science. Mr. Elam has traded futures professionally since 1970, using and writing computer programs for trading portfolios. He was a founding director of the National Association of Futures Trading Advisors and has served on the National Futures Association’s CTA/CPO Advisory Committee and the NFA’s Business Conduct Committee, Eastern Region.

John M. Wildern, Executive Vice PresidentMr. Wildern began his career in the securities industry in 1999 with UBS PaineWebber, where he primarily worked with 401(k) plans for the small business segment. In 2001, Mr. Wildern joined Fidelity Investments as a Financial Advisor, responsible for coordinating retirement and estate plans for individual investors. His last role at Fidelity was that of Vice President within the high net worth Private Access group, where he managed a $700 million portfolio of both individual and institutional client assets. Mr. Wildern holds a B.S. in Economics from Hillsdale College, a M.A. in Financial Economics from the University of Detroit Mercy, and an MBA from the J.L. Kellogg School of Management at Northwestern University.

Harry H. Suber, Ph.D., Portfolio ManagerFrom 1960 to 1969, Dr. Suber attended Clemson University in South Carolina earning a B.S. (cum laude) in Physics, a MS in Mathematics and a Ph.D. in Mathematics. He was an Associate Professor with the Department of Mathematics at Salisbury University in Maryland from 1969 to 1990. Dr. Suber is a co-founder of NorthCoast AM and has been the Director of Research since May, 1988. He has primary responsibility for computer-assisted research and programming for NorthCoast’s portfolio management models and systems.


Disclosure Information

The CAN SLIM® Investment Program is a long-term growth portfolio that invests in CAN SLIM® stocks as markets are rising and scales to cash as markets weaken. Its objective is capital appreciation. The chart above shows the total return, including reinvestment of all dividends, and net of commissions and maximum investment advisory fees of 2.50%. The performance for the CAN SLIM® Investment Program is that of a hypothetical portfolio managed in accordance with the dictates of the Program before June 30, 2005 and model performance from July 1, 2005. The model performance shown is that of a model account managed according to the dictates of the Program. Other accounts are excluded to prevent additions, withdrawals and client mandated customizations from biasing performance presentation. Since December 31, 2009, performance reported has been prepared in compliance with the Global Investment Performance Standards (GIPS) and represents the net composite time-weighted return. For comparison the return of the S&P 500 is shown for the same time period. The S&P 500 Index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. It is generally considered a proxy for the total market. Past performance does not guarantee future returns and an investment in growth stocks does involve risk of loss.

The CAN SLIM® International Investment Program is a long-term growth portfolio that invests in international stocks (ADRs) as markets are rising and scales to cash as markets weaken. Its objective is capital appreciation. The chart above shows the total return, including reinvestment of all dividends, and net of commissions and maximum investment advisory fees of 2.50%. The performance for the CAN SLIM® International Investment Program is that of a hypothetical portfolio managed in accordance with the dictates of the Program. For comparison the return of the S&P 500 and the MSCI EAFE index is shown for the same time period. The S&P 500 Index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. It is generally considered a proxy for the total market. The MSCI EAFE index is designed to measure the equity market performance of developed markets outside of the U.S. & Canada and is generally considered a proxy for the international market. Past performance does not guarantee future returns and an investment in growth stocks does involve risk of loss.

CAN SLIM, Investor’s Business Daily, and IBD are registered trademarks owned by Investor’s Business Daily, Inc. and used here by NorthCoast Asset Management with permission. CAN SLIM® Private Clients is not sponsored by Investor’s Business Daily, Inc. or William J. O’Neil and neither is recommending, advising or otherwise endorsing an investment in the offering.


6 glenville st | greenwich, ct 06831 | [email protected] | | phone: 203.532.7003 | fax:...

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