Radford University
After attending RISE II in 2002, SMIPO was formed with an initial $100,000 endowment. In 2004 SMIPO received an additional $150,000. Again, in 2006 we received another $100,000 endowment.
SMIPO is a fully student-managed organization. None of our 29 members receive credit for participation in the organization.
Since SMIPO’s creation in 2002, the organization has been selected to present as finalists at RISE five out of six years.
Board of DirectorsBoard of Directors
Info TechInfo Tech
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Sr. Investment
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Human Resources
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EconomistEconomist AccountantAccountant ArchivistArchivist MarketingMarketing
To allow Radford University students the opportunity to gain practical experience in the management and decision-making activities of a corporate structured organization by participating in hands-on management of the funds of Radford University Foundation's endowment to a Student Managed Investment Portfolio Organization.
• Top Down Portfolio Management• Economic Analysis• 2008 strategy• Sector Allocation• Stock Selection Process • Exit Strategy• Benchmarking Our Performance • SMIPO’s Performance in 2008• Basic Portfolio Stats• SMIPO’s Direction in 2008-2009
• Develop economic forecasts.• Asset allocations between equities and
cash.• Apply economic forecasts to the sector
allocation decision.• Choose beta exposure, style exposure• Stock selection consistent with our
economic views.• Constant monitoring of sectors and
holdings.• Realization of Gains/Losses.
• Identify Investment Opportunities • Quarterly Sector Outlook
•Broad macro-economic indicators• Industry Trends•Sector Specific Indicators•Sector Growth•Analyst Coverage
• Convey data contained in these reports to investment analysts in a relevant and actionable manner.
• Favorite Economic Indicators• CPI & Core CPI• Crude Oil• Case-Shiller Housing Price Index• Initial Job Claims and Unemployment
rate• Exchange Rates
• Current account balance• Fiscal Policy• Monetary Policy
• Presidential Election• Policies and regulations• Fiscal Policy: Spending / Taxation
Large Cap, low risk companiesHigh Dividend yieldDecrease portfolio beta
The economy will remain in a recession for the remainder of 2009.
GDP growth will continue to be sluggish.
Factors driving economic outlook Bailout concerns Stimulus package Financial sector Housing Market
Requirements: Sector allocations are set relative to our
benchmark (S&P 500) Each sector’s analysts are responsible for a
sector allocation strategy. Deviations from benchmark weights are
explained in a written sector allocation report. Sector allocations must be re-evaluated each
quarter. ETF’s may be used as temporary holdings and
provide quick execution of sector reallocation.
Financials: Underweight Uncertainty in Sub-prime lending
▪ Goldman Sachs Group Inc.▪ Charles Schwab Corp.
Energy: Underweight Good growth, but high volatility
▪ Transocean Utilities: Market weight
Defensive, above average dividend yields▪ Exelon
Health Care: Overweight Defensive and strong growth
▪ Johnson & Johnson▪ Gilead Sciences
Technology: Underweight Weakened consumer demand
▪ IBM Telecom: Underweight
Below average growth and hypercompetitive environment▪ Comtech Telecommunications
Basic Materials: Slight overweight Low volatility and good performance excluding home
materials▪ Sigma Aldrich
Industrials: Underweight Weak global economic conditions
▪ Ametek Consumer Discretionary: Underweight
Economic Concerns on Consumer Spending▪ McDonald’s
Consumer Staples: Overweight Defensive balance and strong dividends
▪ Colgate Palmolive▪ Phillip Morris
Investment Process Screening & Research Spreadsheets and Workbook Presentation with Q&A
Voting Process Majority is needed for BUY or SELL
After BUY Constant monitoring to Identify
fundamental changes
Sources of Information: Thomson One Student Research Edition ValueLine Zacks.com Yahoo! Finance StandardandPoors.com
10-K10-QPositives/NegativesRisks/ExposuresCompetitor Comparison Analyst Estimates/Price TargetsValuations
Dividend Current = $2.00 Value Line Estimated Growth Rate =
8.87% CAPM = 10.53% DDM: ($2.00*(1+.0887))/(.1053-.0887) = $131.00 Highly undervalued (Optimistic?) Bargain Purchase Strong earnings and dividends.
• Investment Analysts Constantly Monitor Sectors for unexpected variations in stock value
• Weekly Updates on Stock Positions• Changes to sector allocations
• Reassess holdings
• Automatic Reevaluation Trigger• If a security drops or gains in market
value by 10% within a rolling five trading day period or 20% within a rolling twenty trading day period
• Does Not Mean SELL• Examples:
• MEMC• Aflac
• S&P 500 is benchmark for SMIPO• Investment Analyst performance is
compared to sector returns from S&P• Analysts expected to meet or exceed
returns for given sector
SMIPO S&P 500
2008 Return: (34.99) (39.84)
Dividend Yield: 2.16% 3.66%
PE (TTM): 10.54 10.75
Beta :(Historical)
0.913 1.0
EPS Growth:(5 Year)
11.98% 10.32%
ROE: 30.44% 22.05%
SMIPO S&P 500
Alpha: 5.20%Annualized
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Treynor: (0.153) (0.177)
Sharpe: (0.033) (0.037)
Beta (2008): 1.04 1.00
Standard Deviation: 0.226 0.210
• Organization• Continuous Improvement of
Investment Techniques• Develop valuation methods for
each sector• Portfolio
• Sector Allocations• Beta Timing • Style Timing
