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THE HENRY FUND

2014 Annual Report November 30, 2014

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TABLE OF CONTENTS

Letter From the Investment Team 3

Fund Overview 4

Acknowledgments 5

Fund Performance 6

Summary of Transactions 9

Economic Overview 10

Basic Materials 12

Consumer Discretionary 14

Consumer Staples 18

Energy 21

Financials 24

Healthcare 30

Industrials 34

Technology 37

Telecommunications 43

Utilities 45

Statement of Security Holdings 47

Income Statement 48

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From the Investment Team

Dear Stakeholders, As we near the end of 2014, we reflect on the amazing opportunity we had to guide the fund through the whirlwind year that 2014 was. 2014 saw the market contract and rally eventually returning 11.44% this year. We’ve seen an increasing focus on oil prices in the latter part of the year as the world deals with an oversupply of oil and no indication from OPEC that a reduction in production is coming. With that said, we inherited a portfolio that was managed very well by our classmates, to the point that we could hit the ground running in the pursuit for alpha in a profitable market. We are eternally grateful for the mentorship of two of the greatest teaching assets that the University of Iowa could ask for in Dr. Todd Houge, Curt and Carol Lane Faculty Fellow, and Cathy Zaharis, Business Director for the Tippie MBA Finance Academy. Dr. Todd Houge taught us the technical skills required for precise and accurate financial modeling, while providing invaluable insight in how expectations and assumptions should be realized in a financial model. Dr. Houge not only provided the foundation for successful financial modeling, he helped the team develop our modeling and analysis skills through our interaction both in and out of the classroom, consistently proving to make himself available for our questions, no matter the day or time. For this superior level of mentorship and guidance, we are forever indebted to Dr. Houge and his leadership. Cathy Zaharis provided great insight in our many team discussions throughout the year. She comes from a background in the investment industry, working for many years as a portfolio manager for Principal Financial Group. We believe that with her vast experience she has been able to provide the team with invaluable insights when it comes to managing an entire portfolio of stocks. She has challenged us throughout the year to think bigger and outside of the box when it comes to individual holding decisions, and provided us with knowledge on how to manage these holdings as a whole from a top down level instead of an individual holding level. We are extremely grateful for the level of knowledge and mentorship that she brings to not only the Henry Fund, but also to the entire Tippie MBA finance academy. We are also extremely grateful for the entire Henry Fund Advisory Board for the time they dedicate to the students every year as a mentoring committee. They provide the students with invaluable feedback and advice, through the advisory board presentations in the spring and fall, as well as the time they commit to advising and mentoring the students both through in person presentations and conference calls throughout the semesters. Their guidance and advice in regards to research methods and stock selection has been crucial to our development as equity analysts. Lastly, we would like to thank Henry Royer and Henry B. Tippie for their contributions which created the fund and their vision which has allowed students to learn and develop necessary skills to perform in the investment industry for over 20 years. The finance academy at Tippie would not be the same without the Henry Fund and the small class size learning experience provided to the students by the Henry Fund positively differentiate Tippie from other business schools. The 2014 Henry Fund team would again like to thank all of the above mentioned as well as various others for the opportunity to be part of such a priceless educational experience. Sincerely, The Henry Fund Class of 2014

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Fund Overview The Henry Fund, named for its two founding benefactors, was established in the spring of 1994 to provide University of Iowa MBA students with a forum to blend academic rigor with real-world portfolio management experience. Henry Royer, Henry Tippie, and the University of Iowa Foundation contributed the initial $50,000 investment that established the Henry Fund.

The Henry Fund is an equity portfolio listed as an outside investment by The University of Iowa Foundation. The Fund is required to meet the same basic performance guidelines as equity accounts in the long-term investment pool of The University of Iowa Foundation. In keeping with these requirements, managers of the Henry Fund seek to achieve the highest level of return while assuming risks similar to those of the S&P 500 index. The Henry Fund team, therefore, recommends a targeted portfolio of stocks from a broad set of industries, investing in well-managed, profitable businesses without unnecessarily exposing the fund to economic or industry risks.

The Fund is divided into three separate accounts: active, passive, and cash. The active account, comprising approximately 98.0 % of the Fund’s assets, currently consists of equity positions in 32 companies. This account represents the primary measurement of the manager’s stock selection ability. The Henry Fund scholarship payments necessitate that The Fund keep cash in a money market account in order to meet its annual commitment. This account also receives dividends and is used to pay brokerage fees and other expenses incurred during the year. The passive account is primarily money from positions sold between advisory board meetings that are held in a sector ETF until a new active position can be taken. There is currently 2% of the fund’s assets in a healthcare sector ETF.

The managers of The Henry Fund are students in the Applied Securities Management course (6F: 221 and 6F: 222) at The University of Iowa’s Henry B. Tippie School of Management. The two-semester course is limited to twelve students. Students are selected by blind review based on a research report application at the end of the fall semester of the first year of the MBA program. The 11 analysts are assigned to one of 10 economic sectors: basic materials; consumer cyclical; consumer services; consumer non-cyclical; energy and utilities; financial services; healthcare; industrials and transportation; technology; and telecommunications. Because of the growing importance of financial services, technology and healthcare two or three analysts are assigned to each of these areas to promote expanded coverage and wider diversification of our holdings.

Each manager develops a fully integrated investment review, based on a top-down approach that incorporates an extensive economic, industry, and company-specific analysis. Once the analyst evaluates the value drivers of each industry, he or she researches specific companies for potential investment. Each security is modeled using a variety of valuation techniques including: discounted cash flow analysis (DCF), economic value added (EVA), fundamental multiple analysis, and relative multiple valuation. Fund managers are expected to act as both sector analysts and portfolio managers, providing basic industry research, proposing investment ideas and evaluating the ideas of the other managers. Investment recommendations are presented to the Investment Advisory Committee for review and then voted on by The Henry Fund managers. In addition, the managers perform the administrative tasks of portfolio management, including marketing the fund to outside donors and producing an annual report.

THE HENRY SCHOLAR A portion of the Henry Fund dividend income supports annual scholarships to MBA students, the recipient of which is called The Henry Scholar. It is approximately $1,000 per $100,000 of the value of the portfolio. The scholarship is renewable for a second year based on the student’s academic performance. Thus, $2,000 in scholarship money is transferred annually to the university cash account designated for Henry Scholars. The goals of The Henry Scholar Program are to encourage and prepare students for careers in investments as well as to attract outstanding Henry Fund candidates.

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Acknowledgments

FOUNDERS Henry Royer Henry B. Tippie Henry Royer attended Colorado College, where he received a BA in 1953. Following college graduation, he became a grain merchandiser with Pillsbury Mills. He joined the Peavey Company in 1957, became Treasurer and a board member of Lehigh Sewer Pipe and Tile in 1961, where he remained until 1965. From 1965 to 1983 Mr. Royer held various positions with First National Bank (Norwest), Duluth, Minnesota. In 1983, he joined Merchants National Bank of Cedar Rapids (Firstar), where he served as chairman and president until August 1994. He subsequently served as president and CEO of River City Bank in Sacramento, California. He is now executive vice president of Berthel Fisher & Company Planning, Inc., located in Cedar Rapids, Iowa. Throughout his life, Henry Royer has been active in both business and civic organizations. While in Iowa he served on the Board of Visitors of the College of Business Administration. Currently, he is on the boards of IES Industries, CRST International, Inc., Berthel Growth & Investment Trust, River City Bank, Families First, Inc., United Way, the Sacramento Symphony, the Sacramento Tree Foundation and the Sacramento Commerce and Trade Organization. Henry B. Tippie grew up in Belle Plaine, Iowa, and, after serving in the Army Air Force, earned a BSC in accounting from The University of Iowa in 1949. He began his forty-nine year professional involvement with Rollins in 1953, starting by balancing the small firm’s checkbook. Today, four Rollins companies trade on the NYSE and one on the Amex. In addition, Tippie is still involved with Rollins enterprises, serving on the board of directors for all five publicly traded companies and as chairman of the board for two companies. He also runs several of his own ventures from his offices in Austin, Texas. Tippie has been a tremendous asset to The University of Iowa, endowing a chair in business administration and several professorships in the business school. He also has endowed two two-year accounting scholarships and, for graduates of Belle Plaine Community Schools, two four-year scholarships. To help fund the completion of the Pappajohn Business Administration Building, he donated funds to build a 175-seat auditorium, a student lounge and Pat’s Diner, named for his wife, Patricia. For his numerous contributions, Tippie received The University of Iowa’s Distinguished Service Alumni Award and Outstanding Accounting Alumni Award. In 1996 he was a recipient of the nationally prestigious Horatio Alger Award. In February 1999, Tippie made a major commitment to the College of Business to support its students and faculty. In recognition of his past, present, and future support that will exceed $30 million, the college was named the Henry B. Tippie College of Business. Mr. Tippie was awarded the Hancher-Finkbine Alumni Medallion in 2002.

ACADEMIC ADVISORS

Todd Houge, Ph.D., CFA

BROKERAGE SERVICES

E*Trade

INVESTMENT ADVISORY COMMITTEE

Jim Bethea, CFA Scott Hassenstab, CFA University of Iowa Foundation AEGON USA Investment Management, Inc.

Marshall Bridges, CFA Todd Nelson, CFA, CPA HNI Corp. Goldman Sachs

Mihail Dobrinov, CFA Daniela Spassova, CFA Principal Global Investors Principal Global Investors Michael Harmelink, CFA

State of Wisconsin Investment Board

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Fund Performance

The Henry Fund gained 20.47% from November 30, 2013 to November 30, 2014 compared to a dividend adjusted gain of 16.86% in the S&P 50 Index during the same period. At the time when this report is conducted, there are 27 stock names in the portfolio. Besides stocks, the fund also invests in three ETFs: Energy SPDR, Healthcare ETF and S&P500 SPDR. During the 12-month period, 23 stocks achieved positive returns and four of them lost in price. 13 stocks went up by more than 15% and two went down by more than 15%. Apple (APPL) and Sandisk (SNDK) are the two biggest winners with price appreciation over 50%. The stock that suffered the biggest loss is Technip (TKPPY) which dropped 32.78%. Of the three ETFs, Energy SPDR declined a lot during the fourth quarter of 2014 because of the dramatic decrease of oil price. Following this section is a brief narrative summary of individual sector performance. More detailed discussion of each sector can also be found after the narrative summary.

54.21% 53.50%

44.03% 43.28%39.10%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Apple Sandisk Teva Pharma UGI Corp. CVSCaremark

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2014 Best Performers

1.39%

-2.98% -7.84%

-18.97%

-32.78%-35.00%

-30.00%

-25.00%

-20.00%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

QualcommInc.

Google -Class C

Chevron UniversalCorp

Technip

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2014 Worst Performers

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Basic Materials: The materials sector is currently 2.38% of the portfolio weight as compared to a 3.22% weight in the S&P 500, representing a relative underweight of 26%. The fund had a single holding for the entire year: CF Industries, which was added in 2013. CF has returned 14.1% over the year as compared to 13% for the XLB Materials SPDR ETF. CF has had a modestly volatile year, spiking in October to be up 21% before falling 16% within 10 days. We continue to hold the position due to strong performance from the company as well as increased biofuel requirements going forward. Consumer Discretionary: Consumer discretionary was a very interesting sector of the fund. As it currently stands, it represents approximately 6.74% of the fund’s weight as compared to the 11.9% it represents in the S&P 500, a 43.4% underweight. This is largely due to a sale of Lions Gate Entertainment which was 4.2% of the portfolio. The other holdings in the fund as of November 28, 2014 are DirecTV at 2.2% and Costco at 4.5%. Over the course of the year, Consumer Discretionary returned approximately 24.2% for the fund as compared to 13.82% for the XLY Consumer Discretionary SPDR. DirecTV had an interesting year with its merger talks with AT&T, which caused the stock to jump 12% in a matter of days at the beginning of May. DTV has traded off slightly from this high as the merger talks drag on but is still up 22% on the year. Costco has been a solid performer for the fund, returning 18.3% over the course of the year. Lions Gate has been a story of market timing for the fund. We decided to buy in during what was near the 52 week low in May and have stuck with the stuck during its rise to a 52 week high in mid-November, returning 30.5% on a stock that has only returned 10% over the year. Going forward the fund will be completely turning over the Discretionary portfolio by selling out of all the names and adding Dick’s Sporting Goods, Winnebago Industries, and Carriage Services, in addition to moving BorgWarner from Industrials to Consumer Discretionary. Consumer Staples: The consumer staples sector accounts for 9.21% of the Henry Fund as compared to 9.75% of the S&P 500, a 5.5% underweight. The fund’s holdings consist of CVS Caremark at 2.8% of the portfolio, Casey’s General Stores at 4.5% of the portfolio, and Universal Corporation at 2% of the portfolio. The sector has returned approximately 26.2% over the course of the year as compared to the XLP Consumer Staples ETF, which has returned 17.64%. The biggest performer (50.1%) of the fund was Keurig Green Mountain, which was sold soon after the announcement that Coca-Cola was taking a stake in the company. Those funds were eventually invested in to Casey’s General Stores, which returned approximately 23% since the purchase in May. Universal Corporation has been a drag on the fund’s alpha falling 22% since early September to being down 18.36% on the year. Going forward, the fund will continue to hold CVS Caremark, Casey’s General Stores, and Universal Corporation with the fund still being slightly underweight the S&P 500 weighting to Consumer Staples.

Energy: The current weight of the energy sector in the S&P 500 is 8.44% compared to our funds weight of 10.37%, an overweight of 22.9%. The fund’s current holdings consist of Chevron (2.75%), Plains All-American (2.45%), Technip (1.57%), and the Energy ETF (3.6%) which had replaced Kodiak Oil and Gas, which was sold from the fund in September. The Energy sector has returned -1.3% over the course of the year compared to the XLE Energy SPDR ETF, which has returned -12.02% over the course of 2014. The fund’s overweight to energy hurt its overall performance during the second half of the year with the sharp drop in oil prices; however it held up much better than the overall sector. The silver lining of the fund being when we traded out of Kodiak Oil & Gas after it was announced it would be acquired by Whiting Petroleum, capturing 30.5% upside before Kodiak proceeded to fall 54%. In December, we recommended selling out of Technip and moving the proceeds from that and the ETF in to Cameron International Corporation and Helmerich & Payne, which are service providers and equipment manufacturers.

Financials: Financials currently represent 16.55% of the S&P 500 and approximately 17.41% of the Henry Fund’s weight, and overweight of 5.2%. The Financials sector returned approximately 12% for the fund over the course of the year as compared to 13.8% for the XLF Financials SPDR ETF. The Henry Fund’s holdings currently consist of JP Morgan Chase (5.5%), Allstate Financial (2.6%), Citigroup (5.05%), Capital One (2%), and Hartford Financial Services (2.25%). The strongest performer of the sector has been Allstate with a 26.7% return, while the big banks have lagged the sector with JP Morgan yielding 9.7% and Citi returning 5.6%. All of the financials have had a strong performance coming out of the very volatile middle of October, each of them returning at least 10% or more. Going forward the fund will be moving in to a REIT

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in the form of Tanger Outlet Services and C&F Financial Corp, a small regional bank. Thus, we will be holding three banks (JPMorgan, Citi, C&F), a property and casual insurance company (Hartford), and a REIT (Tanger).

Healthcare: The Henry Fund is currently overweight Healthcare with a weight of 15.87% compared to the S&P 500 weight of 14.52%, an overweight of 9.3%. The Healthcare sector had a strong performance for the fund this year returning 35.8% compared to the XLV Healthcare SPDR ETF, which returned 27.6%. The fund was primarily led by Celgene, which returned over 50% during its time in the fund this year. The fund had strategically added to its position on a dip during the May rebalancing. Volatility was very prevalent in Healthcare, Celgene was down 19% YTD in mid-April before surging 47% to when the fund sold the position in mid-November. Teva and Cerner also experienced volatility but both have looked strong coming out of the mid-October near-correction. The fund holdings at this time are Teva Pharmaceuticals (4.13%), Cerner Corporation (5.5%), and the XLV ETF (6.24%). Going forward the fund will be looking to replace the ETF with Perrigo Company PLC and possibly another biotech holding.

Industrials: The S&P weighting of Industrials is 10.42%, meaning the Henry Fund, with its 8.45% weight is currently underweight 18.9%. Industrials has been struck with a lot of volatility over the course of the year and to date has returned approximately 2% as compared to the XLI Industrials SPDR ETF which returned 7%. Near the end of 2014, our Industrials holdings – BorgWarner (2.5%), Waste Connections (3.6%), and Quanta Services (2.3%) – suffered from the OPEC comments and volatility around oil prices. The team will continue to hold these three companies as well as take a position in Delta Airlines, which despite a surge in 2014, still has some upside to the valuation and is a good hedge against falling oil prices. BorgWarner will be moved to Consumer Discretionary when the portfolio is rebalanced.

Technology: The technology sector represents 20.75% of the fund’s weight as compared to the 19.8% it comprises of the S&P 500, an overweight of 4.8%. The Technology sector of the Henry Fund yielded approximately 20.5%, as compared to the XLK Technology SPDR ETF, which returned 18.9% over the course of the year. The Henry Fund’s holdings in technology are Apple (7.5%), Corning (3.3%), Google Class A (1.6%) and Class C (1.6%), Qualcomm (3%), and Sandisk (3.8%). Apple (47.8%) and Sandisk (46.6%) were the strongest two performers for the Fund in tech, while Google shares struggled to gain any traction after the stock split in April. Going forward the team plans to remove Qualcomm and add some software exposure in form of Ansys and further consumer exposure in the form of Activision Blizzard.

Telecom: The Henry is currently underweight Telecom by 52% (1.1% vs. 2.3% for the S&P 500). The fund originally started the year with two regional wireline and wireless carriers in the form of Shenandoah Telecommunications and Cincinnati Bell. The team elected to remove Shenandoah Telecom from the fund in May after it had returned 3.4%, and plans to remove Cincinnati Bell from the fund this December after it has lost 8.4%. Telecom overall was volatile for the fund as the two holdings they had were small caps that were susceptible to big swings in performance from week to week. Overall Telecom was returned approximately -0.85% for the Henry Fund while the XLT Telecom SPDR ETF returned approximately 4.9% over a very volatile year. Going forward the Henry Fund will be choosing to go with a best-in-class approach and have Verizon as the sole holding of the fund. Utilities: Utilities represent 2.73% of the Henry Fund weight compared to the S&P 500 where they are about 3.1% of the weight, a relative underweight of the sector of 11.9%. The sole holding in Utilities was UGI Corporation, which has had a very strong performance over the year, returning 39.2%, this compares with XLU Utilities SPDR ETF which has returned 22.8% YTD. Going forward the fund will continue to hold UGI and will add American Water Works Company, a water utility, to be even weight with the S&P 500 in Utilities.

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Summary of Transactions

Name Ticker Shares Dec 31,

2013 Shares Nov 30,

2014 Share

Change

Apple (1) AAPL 356.7 2,547.5 2,190.8

Accenture ACN 1,036.1 - (1,036.1)

Allstate ALL 1,120.9 1,468.4 347.5

BorgWarner BWA - 1,743.9 1,743.9

Casey's General Store CASY - 2,073.0 2,073.0

Citigroup C 3,885.0 3,515.3 (369.7)

Cincinnati Bell CBB 13,000.0 13,000.0 -

Celgene CELG 700.0 - (700.0)

Cerner Corp. CERN 3,036.0 3,334.0 298.0

CF Industries CF 348.0 354.9 6.8

Capital One COF 921.0 935.4 14.4

Costco Wholesale COST 1,398.0 1,232.2 (165.8)

CVS Caremark CVS 1,173.5 1,185.8 12.4

Chevron CVX 973.5 999.0 25.5

DirecTV Group DTV 1,222.0 1,022.0 (200.0)

Corning GLW 5,806.0 5,890.2 84.2

Green Mountain Coffee Roasters GMCR 1,361.0 - (1,361.0)

Google - Class C (2) GOOG 117.0 117.0 -

Google - Class A (2) GOOGL - 117.0 117.0

Hartford Financial HIG 2,072.0 2,099.5 27.5

J.P. Morgan JPM 3,339.6 3,431.2 91.7

Kodiak Oil & Gas KOG 11,209.0 - (11,209.0)

Lions Gate Entertainment LGF 4,523.0 - (4,523.0)

Plains All American PAA 698.7 1,932.3 1,233.6

Quanta Services PWR 5,726.0 3,058.0 (2,668.0)

Qualcomm Inc. QCOM 1,585.3 1,609.8 24.5

Shenandoah Telecommunications Company SHEN 3,200.0 - (3,200.0)

Sandisk SNDK 1,389.0 1,404.7 15.7

Teva Pharma TEVA 4,161.6 2,797.8 (1,363.8)

Technip TKPPY 5,204.0 4,087.5 (1,116.5)

UGI Corp.(3) UGI 1,777.7 2,733.8 956.1

Universal Corp UVV 1,760.0 1,832.8 72.8

Waste Connections WCN 2,206.0 3,143.3 937.3

Energy SPDR XLE - 1,798.0 1,798.0

Healthcare ETF XLV - 3,431.0 3,431.0

S&P 500 SPDR SPY - 926.0 926.0 (1) Apple conducted a stock split 7:1 during 2014

(2) Google split their stock into two share classes during 2014

(2) UGI conducted a stock split 3:2 during 2014

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Economic Overview

Real GDP Growth Rate Growth has been volatile in 2014, but has shown a strong upward trend for the second and third quarters. The reported GDP numbers demonstrate the volatility, with the first, second, and third quarters growing at -2.1%, 4.6%, and 3.9%, respectively. Extremely harsh weather was partially responsible for Q1’s decline, and given the subsequent quarters performance, was proven to be an outlier. The increase in nonresidential fixed investment, government, and consumer spending drove the upward trend in Q2 and Q3. Our expected GDP growth has fallen throughout 2014. Currently we forecast GDP annualized growth of 2.91% over the next six months, reflecting our concerns about the slowdown seen throughout much of the developed world. Looking forward, we remain optimistic about the strength of the US economy, but are becoming more pessimistic about the EU, Japan, and China. The unanswered question remains: can the US power global growth or will headwinds elsewhere act as a powerful brake? Longer term, we feel the fundamental drivers will drive GDP growth closer to 2.94%. Inflation The inflation outlook has softened, considering the Federal Reserve (“the Fed”) announced the end of third round of quantitative easing (“QE”) on October 30. Falling energy costs could act to curtail inflation pressures as oil falls under $80 per barrel and may give the Fed flexibility regarding the timing of rate increases. We do not expect a meaningful increase in the short term and have a six-month target of 1.84%. The traditional drivers of inflation like disposable income growth and bank credit growth continue to rise steadily, and by the two-year mark we expect a growing inflation rate target at 2.18%. Unemployment On Nov.12, 2014, the unemployment rate dropped to 5.8%, which is the lowest it has been since the recession. Over the next few months we expect the unemployment rate to maintain consistency. Recently we have seen the labor force participation rate reach a three-decade low. While some of the decline can be explained by demographic shifts, we feel that there are still potential workers on the sidelines. As the economy continues to improve we expect to see the decline in the participation rate halt and hence slow the decline in the unemployment rate. The expected slight increase in the interest rate will also affect the unemployment rate to some extent. In the long term, we remain positive about the economy’s recovery and we expect the U.S. unemployment rate will fall to 5.73%. Interest Rates On October 29, the Fed ended QE3 and provided first rate hike guidance in mid-2015. The Fed won’t rule out more bond buying, if needed, to spur growth though. Considering the recent development, we expect to slightly increase the 1-year treasury and 10-year treasury in the short term to 0.15% and 2.58%. It is difficult to predict how the end of QE, the stimulus programs in Japan, EU, and China, and the massive balance sheet at the Fed will impact rates long term. The relatively high yields and safety of US Treasuries are attractive to buyers throughout the world and could place downward pressure on yields. Adding further uncertainty is the new waters the Fed will be charting as they unwind QE and look to avoid mistakes like those recently made by Sweden’s Central Bank. Over the next two years we expect the curve to shift upwards, forecasting 10-year yields to rise to 3.34% Oil Prices The price of West Texas Intermediate oil has been volatile in 2014. Specifically, the WTI price fell about 35%, from above $115 in June to $77 on November 12. North America shale production and the sluggish global demand led to the declining oil prices. In addition, on November 28, OPEC ‘s decision not to cut output drove the price down further, to $66.26. Given the falling expectations for global growth and the rapid increase in supply out of the US, we do not expect prices to rapidly rebound. At the same time, much of the increase in supply came from high-risk areas like Libya and Iraq; also, low prices are destabilizing too many countries, who may stoke geopolitical tensions to support prices. That means despite recent developments, we forecast WTI prices increasing to around $75.00 within the next 6 months and increasing further to

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around $84.00 per barrel within the next two years. Consumer Confidence Consumer confidence increased to 94.5 in October, the highest since late 2007. The declining unemployment rate, lower oil prices, and upcoming holiday season make us optimistic that in the short term, consumer confidence will continue to increase. Going forward, we remain positive about economic recovery but we expect a modest market correction, leading to a neutral two-year forecast on consumer confidence. Foreign Exchange Rates On Nov. 12, 2014, yen per US$ was at ¥115.17. The team does not reach a consensus and the average result reflects a stronger Yen with a targeted average at ¥109.85 in 6 months and ¥108.27 in 2 years. While the recent divergent Central Banking paths taken by the US and BOJ plus the massive stimulus campaign and slow growth prospects in Japan drive the forecast for a weaker Yen, some analysts also believe the stimulus plan would drive economic growth and would lead to a stronger Yen. The forecast for US$ per euro in 6 months is $1.26, which is relatively flat compared to the current exchange rate of $1.25. In the short term, EU growth is not expected to increase soon as shown by a myriad of economic indicators, including the most recent quarterly growth figures and the declining German business confidence index. Longer term, we believe the oil price drop will help the economy recover in Europe, and our 2-year forecast is $1.29.

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Basic Materials

Analyst: Jarom Dilworth

We are underweight this sector given the macro environment and the expected increase in interest rates. We initiated coverage on Deltic Timber (DEL) and provided continuing coverage on CF Industries (CF). We felt the story for CF Industries provided the most upside potential and we continue to hold CF in the portfolio. The Materials sector, especially the fertilizer industry, continues to benefit from low US energy prices. We expect many of the fertilizer companies to continue to perform well, especially given the political turmoil and problems in Ukraine. With a decrease in natural gas production and imports from Russia, many Eastern European companies have looked abroad for supply. Recently, a Russian potash mine was forced to close, to which the US fertilizer companies responded quite favorably. Deltic Timber (DEL) Recommendation: NO ACTION

Key Stock Statistics

11/30/14 $64.19 Price/Earnings (ttm) 2.08

52 Week Range $58.05 – 69.74 Price/Book 3.05

YTD Return 0.85% ROA (ttm) 9.33%

Market Cap 807.6 M ROE (ttm) 14.58%

Shares Outstanding 12.58 M 2013 EPS 2.08

Beta 0.62 2014 EPS (est.) 2.00

Dividend Yield 0.6% 2015 EPS (est.) 2.27

In selecting Deltic Timber, we felt that there would be an opportunity to invest in a lumber provider given the strong housing downturn. With the housing market starting to recover, demand for lumber will continue to increase. Deltic Timber is a regional company that operates in Arkansas and northern Louisiana. The company has three business units: Woodlands, Mills/Manufacturing, and Real Estate development. Their main products are lumber and medium density fiberboard, but they are also involved in selling consumer real estate and harvesting timber. They have been able to increase sales during recent years, but despite the increase in sales, we did not feel there would be more growth than is already priced into the stock. We decided that the stock price reflected the same upside potential that we saw in the stock, and it was fairly valued. CF Industries (CF) Recommendation: HOLD





Market Cap 12.84 B ROE (ttm) 28.9%


Beta 1.176 2014 EPS (est.) 35.05


CF Industries is one of the largest manufacturers and distributers of nitrogen fertilizer products in the United States. This company has four manufacturing facilities in the United States and two facilities in Canada. The fertilizer products CF manufactures includes ammonia, urea, ammonium nitrate solution (UAN), and ammonium nitrate (AN). Demand for fertilizer is strongly driven by the crops that farmers choose to plant each year. CF is well-positioned geographically to capitalize on the lower natural gas prices in the United States. We saw a YTD return of 13.6 percent. Acres of corn planted have been at record highs in the United States. Since corn is one of the main drivers in the need for nitrogen fertilizer, we feel that demand may

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decrease slightly as we see a pull-back in the number of corn acres planted. The price of corn has supported the number of acres planted in recent years, but we feel the price and acres planted may decrease in the coming years. As agriculture continues to gain visibility and gas prices continue to decrease in the United States, we feel CF is best positioned to capitalize on these variables.

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Consumer Discretionary

Analysts: Jarom Dilworth and Adam Walter Given our recovering economic environment, the Henry Fund has been underweight Discretionary during the last 12 months, but has since shifted focus with the decrease in energy prices. With the lower energy prices, we expect consumers to spend the savings from gasoline in other consumer discretionary categories, especially with the big holiday spending season approaching. We have changed all the holdings in this sector from 12 months ago. At Jan 1, 2014 we held Costco (COST), DirecTV (DTV), & Lions Gate Films (LGF). All of these stocks have had great performance this year. Costco announced they expect to open an online store on Alibaba’s T-Mall. Costco is up approximately 17% YTD. AT&T announced an acquisition of DirecTV. We expect the merger to be completed in early 2015. DirecTV has increased approximately 26% YTD. Lions Gate Films has had a volatile year. We exited the position in November when the stock had appreciated based on Alibaba acquisition rumors. We earned approximately 10% on LGF for the year when we exited the position. We expect to enter into positions in Dick’s Sporting Goods (DKS), Carriage Services (CSV), & W innebago (WGO).

Carriage Services, Inc. (CSV) Recommendation: BUY





Market Cap 369.65 M ROE (ttm) 9.5%


Beta 0.93 2014 EPS (est.) 0.90


Since initiating coverage on Carriage Services, Inc. in October, their stock price has increased over 10%. They own and operate funeral homes and cemeteries in 27 states. Carriage Services is headquartered in Houston, TX and principally serves urban and suburban communities. They have been primarily expanding through acquisitions in a highly fragmented industry. Death rates in the United States have slowed, while cremation rates have increased. Because cremation is a lower margin business than the traditional funeral, this trend has had an adverse effect on many funeral homes’ revenues and earnings per share. Carriage Services has focused its activity in markets with lower cremation rates and has been able to grow its average revenue per store. We have seen more companies, including investment funds looking to consolidate the funeral home market. We feel that even with a small growth rate in the number of deaths, Carriage Services is well-positioned in the market and has a favorable business model to operate in the industry.

Costco Wholesale Corp. (COST) Recommendation: SELL


Price 11/30/14 $142.35 Price/Earnings (ttm) 28.20





Beta 0.53 2014 EPS (est.) 4.34


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Costco was an existing holding when the current team assumed management of the fund, and the company seemed poised for growth with opening their first store in continental Europe. Costco is one of the largest club wholesale retailers in the United States and has operations in Canada, United Kingdom, and the Asia Pacific region (South Korea, Japan, Taiwan, Australia). Moving into continental Europe is favorable for Costco, but they face significant headwinds including the low employment rate in Europe, potential European deflation, and geo-political problems (Ukraine). In monitoring the stock throughout the year, the stock increased in value, especially after they announced they would open a new store on Alibaba’s T-Mall. The stock value continued to increase until we felt the stock was overvalued. After the security price passed its target price and we did not see more catalysts for growth, we felt it prudent to sell our position.

Lions Gate Entertainment (LGF) Recommendation: SELL Sold November 2014



52 Week Range $24.54 – $35.75 Price/Book 6.5


Market Cap $4.6 ROE (ttm) 32.3%

Shares Outstanding 139.8 2013 EPS $1.04

Beta 1.25 2014 EPS (est.) $1.58

Dividend Yield 0.8% 2015 EPS (est.) $1.81

Lions Gate Entertainment Corp. is listed on the NYSE as LGF and operates as an independent production company. LGF has remained committed to its long-term strategic growth initiatives by diversifying business operations through acquisitions and strategic partnerships. LGF’s cost discipline, low overhead, and entrepreneurial business model provide a competitive advantage as it seeks to gain market share (9.8% in 2013 ranks 6th) in an industry dominated by media and entertainment conglomerates. Continued growth in blockbuster franchises including The Hunger Games and Divergent will be driven by international box office sales; however, LGF will need to show its ability to replace revenue from The Hunger Games franchise, whose two films have averaged $778 million in worldwide box office revenue. Mockingjay Part 1 has performed admirably over the first two and a half weeks with approximately $561 million in worldwide box office revenue and appears to be on track with previous franchise releases. The final Mockingjay film is slated for release in November 2015. The increasing trend for in-home digital consumption of media led to 2013 year-over-year domestic box office admissions decline of 20 million (1%), as a result it will be essential for LGF to continue to build out its digital distribution channels to further monetize its movie franchises. Dick’s Sporting Goods (DKS) Recommendation: BUY




YTD Return (15.09%) ROA (ttm) 11.3%



Beta 0.51 2014 EPS (est.) $2.76


Dick’s Sporting Goods, Inc. is listed on the NYSE as DKS and is the largest full-line sporting goods retailer in the U.S. with 642 stores in 46 states. With an extensive assortment of branded and private brands, DKS differentiates itself from competitors through in-store services and shop-in-shop designs dedicated to team sports, athletic apparel, golf, outdoor, fitness, and footwear product categories. DKS store base provides

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growth opportunities over the next three years, with our square footage growth estimated at 8.7%, 10.8%, and 4.9% from 2014-2016 to achieve management’s stated goal of 815 stores by 2017. Although DKS has many catalysts for growth much of its success will derive from management’s ability to drive sales and store productivity as approximately 1,000 square feet/store (SFPS) is allocated from underperforming segments in golf and fitness to women’s, youth, and team sports over the next year.

BorgWarner (BWA) Recommendation: BUY Special Analyst: Michael Emgarten





Market Cap 13.04 ROE (ttm) 18.80%


Beta 1.62 2014 EPS (est.) $3.28


BorgWarner is an industry leader in automotive components that increase fuel efficiency and reduce emissions. The company offers a wide range of efficiency boosting solutions that, when utilized together, can increase fuel efficiency by up to 50%.1 The cost effectiveness of these products combined with government fuel efficiency mandates and consumer demand has resulted in the FactSet analysts’ 5-year earnings CAGR consensus estimate exceeding 17%. Major American automotive original equipment manufacturers (OEMs) adopting turbochargers and improved drivetrains has resulted in very significant growth for the company. The rise of the middle class in China and their country’s emphasis on pollution reduction has also had a significant impact, with revenue growth in China exceeding a CAGR of 37% over the last 5 years. This level of growth is expected to continue as BWA enters into new joint ventures with Chinese OEM’s who are striving to comply with the Chinese government’s new light vehicle fuel efficiency mandate of 47 mpg by 2020. BorgWarner continues to invest in R&D and in acquisitions to expand its portfolio of complementary products, and is predicting that it can double its revenue by 2020. At this time we feel that the forecasted earnings growth have a very high probability of being met or exceeded because of the new government fuel efficiency mandates in its major markets.

Kate Spade & Company (KATE) Recommendation: NO ACTION Special Analyst: Karen Rubel





Market Cap (B) 3.66 ROE (ttm) N/A

Shares Outstanding (M) 127.1 2013 EPS $(0.15)

Beta 1.72 2014 EPS (est.) $0.25


KATE is a luxury designer and retailer, early in its growth story. It has announced its goal of becoming a $4 billion retail business, and has been making significant changes to its business, including acquisitions, divestitures, and reorganizations to align themselves to meet this goal. Although we agree the growth will be significant, we believe the stock is currently overvalued, based on our discounted cash flow analysis and therefore are recommending no action be taken on KATE. Most of our variance from consensus

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estimate relates to selling, general and administrative (SG&A) costs. KATE has been operating over the past three years with SG&A costs over 53%. Analysts are estimating this to decrease to 40.5% in the next couple of years. We identified KATE’s peers and found their average SG&A costs are 40.7% of revenue, and would bump up to over 43% if Michael Kors (KORS) was removed, as KORS operates with SG&A costs only 28% of revenue. With all of the changes KATE is currently going through, we think their ability to reduce costs below peer averages is too aggressive and not realistic.

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Consumer Staples Analyst: Michael Fleagle The current holdings in the Consumer Staples sector are Casey’s General Stores (CASY), CVS Caremark (CVS), and Universal Corporation (UVV). The fund began the year with CVS Caremark, Universal Corporation and Keurig Green Mountain (GMCR). The fund elected to sell Keurig Green Mountain after hit a large run-up following the announcement that Coca-Cola would be taking (what would amount to be) a 15% stake in the firm. Universal Corporation faced a steep decline since the beginning of September after a combination of oversupply and delayed tobacco shipments hurt both the top and bottom line. Casey’s General Stores has been a nice addition to the fund in May, where it has acted as both a hedge to falling oil prices and has continued to execute great same store sales growth. Going forward, our top position continues to be Casey’s General Stores where we like the long term prospects of the company to continue to move in to new markets in Tennessee, Indiana, and Kentucky. We also will continue to hold CVS Caremark as we feel it is a best-in-class performer and could make gains with new strategic partnerships in plan sponsorships. Lastly, we continue to hold Universal Corporation with the thesis being that the Company is historically a strong operator and will be able to work through the short term headwinds it has faced.

Winnebago Industries (WGO) Recommendation: BUY


Price 11/30/14 25.18 Price/Earnings (ttm) 15.55

52 Week Range $20.25- $32.17 Price/Book 3.54




Beta 2.27 2014 EPS (est.) $1.84


After falling from high expectations at the end of 2013, Winnebago looks poised for another breakout due its positioning in a historically strong industry. As RV sales and ownership levels return to where they were pre-recession, we expect Winnebago to experience strong growth with the economy acting as a key tailwind. A well-known brand, great buy-in from dealers, healthy balance sheet, and ability to cater to a growing demographic of customers make Winnebago a strong addition to our portfolio. We believe Winnebago has some strong economic tailwinds behind it with falling oil prices, low interest rates, and pent up demand from baby boomers who have either not yet retired or not yet made a major purchase. Winnebago is leveraged towards the motorhome segment of recreational vehicles, which is only at 75% of peak sales levels from 2006-2007. Winnebago offers a variety of motorhomes across the price spectrum, which tailors to any type of motorhome customer in a growing economy.

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Casey’s General Stores (CASY) Recommendation: BUY





Market Cap (B) $3.23 ROE (ttm) 18.41%

Shares Outstanding (M) 38.65 2013 EPS $3.46

Beta .77 2014 EPS (est.) $3.16


Casey’s General Store’s core strategy over the last half decade has been in its ability to extend its product offering to higher margin items in an industry that is margin competitive - as well as build out and acquire stores in markets that suit them well. By making higher margin items (prepared food) its category of greatest growth, Casey’s has been able to remain profitable in its small market strategy. In an industry that was built on cigarette and gas sales, Casey’s healthy margins on food and grocery items make this c-store operator very profitable. The market rallied behind Casey’s during the fall in oil prices during the latter part of 2014 as they expect a healthy gas margin for the coming year. However, Casey’s has also shown great same store sales growth across their product categories showing great execution at the store level. Although Casey’s hit a minor road bump during the year with having to pay back taxes on tax credit they were erroneously recognizing, we still believe the fundamental business is strong. United Natural Foods (UNFI) Recommendation: NO ACTION







Beta 1.14 2014 EPS (est.) $2.34

Dividend Yield N/A 2015 EPS (est.) $2.51

United Natural Foods (UNFI) is the leading distributor in a fast growing grocery industry – natural and organic foods. Their sales growth has outpaced the growth in the industry for the last five years due to their wide offering of SKU’s as well as their partnership with industry leaders like Whole Foods. However, the growth has come with pains of awkward infrastructure build out as well as negative free cash flow in recent years. Going forward UNFI should be well positioned to leverage its broad distribution network, wide array of products, recent acquisitions, and strong relationships with key retailers into a sound defense of its industry leading title. However, we believe the stock is now trading above fair value due to high expectations of organic adoption in the conventional supermarket segment. The risk is that UNFI is not able to continue upselling or pushing greater volumes through their traditional market segment, or that their recent acquisitions do not sell or integrate as quickly as hoped. These factors combined with UNFI’s P/E of 29x makes it a company that is too risky to be added to the fund. As a fund, we are still somewhat bullish on natural and organics, but the segment has offered view buying opportunities over the past year.

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Universal Corporation (UVV) Recommendation: HOLD





Market Cap (B) $927 ROE (ttm) 6.39%


Beta 1.44 2014 EPS (est.) $5.54


Like many companies within the tobacco industry, Universal faces declining demand of tobacco product users; however they remain efficient operators and take pride in being able “to manage [their] business well in uncertain global markets.” Their ability to generate healthy cash flow, which is returned to shareholders in the form of stock buy backs as well as dividends, make them a company with attractive value. Also, they have branched out to a variety of joint ventures including sweet potato processing as well as liquid nicotine manufacturing. Universal faced a rough start to fiscal 2015 in the form of delayed shipments as well as further pressure on their gross margin due to oversupply issues not previously recognized. We are comfortable with the position of the company and feel they are an efficient operation that will be able to return to prior shipment levels. They have received a vote of confidence in their operation with a recently announced partnership Philip Morris International.

CVS Health (CVS) Recommendation: HOLD Special Analyst: Qi (Alice) Cui



52 Week Range $64.95 - 92.00 Price/Book 2.75


Market Cap (B) 104.6 B ROE (ttm) 11.98%

Shares Outstanding (M) 1,146 M 2013 EPS 3.74

Beta 1.07 2014 EPS (est.) 4.14


CVS was an existing holding which enjoys a good performance this year. The unique integrated pharmacy health care model sets CVS apart from competitors and will continue to drive significant shareholder value. Strong momentum in specialty pharmacy and Minute Clinic will provide long-term growth potential. Declining unemployment and rising disposable income levels, combined with increased aging demographics, provide positive external economic trend for the industry as well. The downside will be margin pressure due to the competitive industry. Also, significant loss of current clients will dampen the revenue growth but we think the probability is pretty low considering CVS currently enjoys a 97% customer retention rate. Our updated model reflects a 5% uptick. Considering its low-risk nature and current consumer staple sector is underweight, we decided to increase our stake on CVS.

21

ENERGY

Analysts: Karen Rubel & Adam Walter

The current holdings in the energy sector as of November 30, 2014 are: Chevron Corporation (CVX), Plains All American (PAA), Technip (TKPPY) and an Energy Select ETF (XLE). We are proposing to sell Technip and purchase Cameron International (CAM) and Helmerich & Payne (HP). We sold Kodiak Oil & Gas (KOG) on September 4, 2014 after the announcement of Whiting Petroleum Corporation’s intention to acquire the company. Since no one had completed a research report on Whiting, we did not feel it was appropriate to keep Kodiak in the Fund.

From the summer to the end of November, oil prices dropped approximately 33%. At the end of November 2014, OPEC announced they will not decrease production levels, which has caused oil prices to drop even further. Although we believe oil prices will continue to drop in the short-term, we have decided to overweight the energy sector. We believe we have strong names in the Fund, and that these names will shield us from the massive losses other energy companies will have in the short-term. We also viewed our weighting as long-term approach, as we believe energy will outperform the S&P 500 over the next couple of years. Chevron Corporation (CVX) Recommendation: BUY






Shares Outstanding (M) 1,890 M 2013 EPS $11.18

Beta 0.94 2014 EPS (est.) $10.83


The integrated oil and gas industry is expected to continue steady growth due to increased global energy demand. The U.S. Energy Information Administration (EIA) predicts more than a 15% increase in liquids demand and about a 35% increase in global gas demand from 2013 to 2030, and with specific capital projects underway, Chevron is well-positioned to take advantage of this growth. Chevron is involved in many key projects, with focus on liquefied natural gas (LNG) projects in Australia. The projects are scheduled to be finished over the next couple of years, and we believe a solid increase in production will be seen in 2016. We assigned a buy rating, based on Chevron’s strong balance sheet and current production schedule. In addition, with oil prices falling so rapidly in the second half of 2014, we believe Chevron, as an ‘integrated major’ will have some of the best defenses in the industry. Although the current oil prices have been affecting every energy company, we believe Chevron will be able to withstand any significant negative impact.

Plains All American (PAA) Recommendation: HOLD






Shares Outstanding (M) 372.0 M 2013 EPS $2.84

Beta 0.61 2014 EPS (est.) $2.75


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Plains All American Pipeline, L.P. (PAA) is engaged in the midstream energy business, transporting crude oil and other products from producers to refineries throughout North America. The biggest driver impacting our valuation is our prediction of the increased production of crude oil in the United States. PAA has capital plans in place to build new pipelines, expand current pipelines, and invest in additional rail and trucking equipment. The projects are strategically focused on areas that are expected to continue or grow to high volumes of production. Our initial evaluation of PAA was in the spring and in the beginning of the fall, PAA almost reached our target price. Since then, the stock price has fallen, as all energy companies have over the past two months. After an evaluation of the correlation between WTI spot prices and PAA’s stock price, we believe the drop in stock price is temporary and will reach our target price within the next one-to-two years. Cameron International (CAM) Recommendation: BUY





Market Cap (B) 9.39 ROE (ttm) 12.6%


Beta 1.36 2014 EPS (est.) $3.55


The U.S. Energy Information Administration (EIA) predicts deepwater to increase its productive capacity more than any other liquid through 2020. Approximately 44% of CAM’s 2013 revenue came from the global deepwater market, and we are expecting this to be a continued area of focus. With deepwater drilling expected to increase globally, Cameron International Corporation (CAM) is well-positioned for growth. CAM is a manufacturer of drilling equipment, valves, blowout preventers (BOP), and compressors, and has been making key strategic decisions to focus on these core businesses. These decisions include divesting two companies over the past year from a non-core segment. In addition, CAM created a partnership with Schlumberger called OneSubsea in 2013. OneSubsea has already generated over $1.4 billion in contracts won, showing its promise for rapid growth. Technip (TKPPY) Recommendation: SELL






Shares Outstanding (M) 113.9 M 2013 EPS $1.67

Beta .88 2014 EPS (est.) $1.97


As a global company, Technip has found its place as a leading EPC (engineering, procurement and construction) company. Although onshore oil extraction has seen a spike over the last couple of years, due to fracking, a large growth area is in deepwater. Technip has been shifting its strategy to address these needs and has been awarded large contracts in both the deepwater and LNG spaces. Technip’s technological expertise has been allowing them to secure more contracts and increase their backlog of projects. Backlog has increased 16% or €2,330 million from 2013 to 2014, with additional forecasted growth beyond 2014. Based on our forecasts for projects and growth within both the subsea and onshore/offshore segments, including the growth of backlog Technip has been developing, we believe Technip is currently fairly valued and rate it as a sell.

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Helmerich & Payne (HP) Recommendation: BUY

Helmerich & Payne, Inc. is listed on the NYSE as HP and is the pioneer in design and manufacture of fit-for-purpose shale drilling rigs. HP has grown its U.S. land rig fleet through entirely organic means from 96 rigs in 2001 to 302 rigs at the end of fiscal 2013. HP’s new generation rigs (termed FlexRigs) are well-positioned to capture market share as the U.S. continues to shift toward horizontal drilling techniques. HP has a strong contracting position with approximately 50%-60% of rigs under fixed-term contracts with a duration of six months to five years, which provides a hedge against highly volatile oil prices as evidenced by a 35% decline since June 2014. Due to HP’s rig diversification across major shale plays, market leading position in alternating current (AC) drive rig technology, and strong, albeit, moderating growth in the production of U.S. light crude the company should be well-positioned for growth despite volatility in oil markets over the next few years.

Kodiak Oil & Gas (KOG) Recommendation: SELL Sold in September 2014

Kodiak Oil & Gas was listed on the NYSE as KOG as of 12/7/14 and upon its completed merger with Whiting Petroleum on 12/8/14, it now trades on the NYSE as WLL. Pre-merger KOG operated in the production, exploration, and exploitation of oil primarily in North American unconventional shale plays. On July 14 Whiting Petroleum announced an all-stock acquisition of KOG valued at $6B, $3.8B in stock and $2.2B in debt, which closed on December 8, 2014. KOG shareholders will receive .177 shares of WLL for every share of KOG, which values KOG at approximately $16.05 based on WLL stock price of $90.67 as of 9/2/14. The two companies share many similarities, which make the recently combined entity the leader in oil E&P in the Bakken. There are ongoing headwinds facing the combined entity including: lower WTI prices, regulatory and transportation concerns as pipeline capacity is severely constrained in the region, as well as integration risk now that the deal has successfully closed. With a 43% one-year return and uncertainty regarding the performance of the combined entity, the fund sold entirely out of its KOG position in September 2014 and invested proceeds in the Energy Select Sector SPDR ETF (XLE), a diversified sector ETF, until fund rebalancing.




52 Week Return (20.88%) ROA (ttm) 10.9%



Beta 1.37 2014 EPS (est.) $6.75




52 Week Range $6.56 – $16.29 Price/Book 2.5

52 Week Return (41.48%) ROA (ttm) 4.5%


Shares Outstanding (M) 268 2013 EPS $0.53

Beta 2.03 2014 EPS (est.) $0.53


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Financial Services

Analysts: Chris Jin, Nicholas Viner Overall, the financial sector and the S&P traded roughly in line for much of 2014, though financials started to appreciate a bit faster towards the end of the year. Net interest spreads have compressed for the last several years due to historically low rates, which limited topline growth. Currently we expect rates to increase in line with consensus and that the increases will drive spreads higher. However, for the Fed to increase rates, the economy would need maintain its current trajectory, which given the strong employment, PMI, and GDP numbers we see little reason for doubt. This reinforces our expectation that financials should be positioned for a solid year in 2015. The biggest concern we have, other than a potential slowdown in US economic performance, is the continued economic weakening seen in much of the rest of the world. The deflationary pressures seen in Japan and the EU could keep the long end of the curve flatter than expected and overall growth weaker.

During spring, we analyzed OFG Bancorp (OFG) a strongly performing bank located in Puerto Rico that we thought may have been trading at an excessive discount given concerns around the Island’s financial health. Unfortunately, the intrinsic value was too close to the trading price to recommend a purchase. Second, we reviewed a current holding Citigroup and found its value proposition compelling enough to keep it in the portfolio. On the insurance side, we reviewed Allstate (ALL) and Chubb (CB), both of which are big property and casualty insurance companies. Chubb was a potential new company that we found fairly valued by the market leading to a recommendation of no action. Allstate appreciated to the target price this year and since we believe further upside is limited the security was sold. In the fall, we analyzed Territorial Bancorp (TBNK), but ultimately found it to be fairly valued. The investment thesis behind investigating TBNK is we thought the market over discounted the impact of rate increases on TBNK’s loan portfolio. For C&F Financial (CFFI), we found the market over discounted the impact dislocations in the subprime auto will have on the bank’s performance and recommended a purchase. JPMorgan Chase (JPM) continues to make operational improvements and work through legal issues leaving the position with enough appreciation potential to make the stock a continued hold. Finally, we are selling Capital One as the stock as appreciated well above its current price target and the updated forecast did not warrant a continued holding of the security. The Hartford (HIG) has been improving its competitive position in the property and casualty insurance business that we think the market has underappreciated and warrants a continued hold. We also covered two REITs (Real Estate Investment Trusts): Tanger Outlet (SKT) and AvalonBay (AVB). Tanger is the only pure REIT that specializes in outlet centers in US. With the growing economy and the company’s strong fundamental metrics, we believe Tanger will continue to grow above expectation. AvalonBay is an apartment REIT focusing on mid-high end rental apartments in prime US locations. Both companies will benefit from the expected improvement in the US economy, but we feel that the consumer exposure and intrinsic value discount in SKT render it a stronger buy. C&F Financial (CFFI) Recommendation: BUY

C&F Financial, a new portfolio addition, is a community bank located in Virginia where it has operated since 1927. Upon completion of a major acquisition the bank now owns 25 branch locations. The bank operates


Price 11/30/14 $39.04 Price/TBV (mrq) 1.23

52 Week Range $54.70 – 30.33 Price/Book (mrq) 1.07

Market Cap (B) $127.00 ROA (ttm) 1.00%

Shares Outstanding (M) 3.4 ROE (ttm) 11.05%

Institutional Ownership 19.80% 2013 EPS 4.18

Beta 0.85 2014 EPS (est.) 3.05


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along three main business lines C&F Bank, which is the retail bank arm, C&F Mortgage, which originates mortgages for sale, and C&F Finance Company, which buys indirect subprime auto loans. The Bank and Mortgage units conduct businesses mainly in Virginia, but the Finance arm purchases loans throughout the lower eastern U.S.

The drop in CFFI’s stock price is an overreaction from the market concerning the recent acquisition and issues in the subprime auto space. Barring a return to crises type conditions, the nearly 50% price decline provides a margin of safety sufficient to recommend purchase. Territorial Bancorp (TBNK) Recommendation: NO ACTION

Territorial Bancorp is a state chartered savings bank incorporated in Maryland, but conducting business exclusively in the state of Hawaii. Currently the bank operates 28 branches and employs 269 workers. The operational focus is almost exclusively on the origination and purchase of conforming residential mortgages. Since 2009, TBNK has had solid tangible book value (TBV) growth. This was accomplished while holding double the capital required to be classified as well capitalized and originating business at a higher growth rate with lower loan losses than peers. We expect those trends to continue and, after the recent selloff, the stock can be purchased at a sizable discount to peers. Unfortunately, the high concentration in long duration assets juxtaposed with its short term liabilities made the investment unpalatable in the face of expected rate increases. JPMorgan Chase (JPM) Recommendation: HOLD

JPMorgan Chase (JPM), a portfolio holding since 2010, is one of the largest banking/financial service institutions in the world. The company has 245,000 employees and operates over 5,500 branches worldwide. Structurally, the business operates along four main business lines: Consumer & Community Banking, Corporate & Investment Banking, Commercial Banking, and Asset Management.

Concentration on the improving U.S. economy and expected U.S. rate increases drive the forecast for JPM. However, the bank has seen revenue declines since 2008 and moving forward we do not expect growth to exceed overall U.S. growth appreciably. Those factors coupled with the presently undemanding valuation requirement renders JPM a hold.





Shares Outstanding (M) 9.97 ROE (ttm) 6.42%


Beta 0.57 2014 EPS (est.) 1.28






Shares Outstanding (M) 3,738 ROE (ttm) 9.83%


Beta 1.92 2014 EPS (est.) 5.63


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OFG Bancorp (OFG) Recommendation: NO ACTION

OFG Bancorp is a bank holding company based in San Juan, Puerto Rico. The company’s operations are conducted primarily in Puerto Rico. OFG operates 56 bank branches across the Island, manages assets totaling approximately 8.1 billion dollars and has 1,534 employees. The product and service lines offered by the bank span the full gamut of commercial banking operations. The bank has acquired two competitors since 2010. These purchases have made OFG the third largest bank operating in Puerto Rico. OFG Bancorp has weathered the economic troubles in Puerto Rico and has placed itself in a competitive position on the Island. Unfortunately, the stock was fully valued when analyzed so no action was recommended. Citigroup (C) Recommendation: HOLD

Citigroup is a global, diversified financial services company. The company operates in more than 160 countries and has over 250,000 employees. Operationally, Citi is divided into four groups: Global Consumer Banking (GCB), which primarily consists of retail banking and Citi branded cards, the Institutional Clients Group (ICG), which includes securities and banking plus transaction services, Corporate/Other that provides services within Citi, and Citi Holdings, in which Citi has placed assets that no longer fit their business model and are winding down. Citi has made significant progress in streamlining operations and becoming a more efficient enterprise over the last few years. Revenues will begin to pick up in 2015, driven higher as interest rates increase in the middle of the year. This operating leverage combined with Citi’s substantial relative valuation warrant a continued place in the portfolio. Allstate (ALL) Recommendation: SELL




Market Cap (B) $756 ROA (ttm) 1.13%

Shares Outstanding (M) 45 ROE (ttm) 11.26%


Beta 1.12 2014 EPS (est.) 1.24






Shares Outstanding (M) 3,038 ROE (ttm) 6.93%


Beta 1.23 2014 EPS (est.) 4.85




52 Week Range $49.18-68.98 Price/Book 1.39



Shares Outstanding 419.43M 2013 EPS 4.87

Beta 0.98 2014 EPS (est.) 4.28


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The Allstate Corporation (“Allstate”, “Company”), with headquarters in Northfield Township, Illinois, is currently the largest publicly traded insurance company in personal lines of property and casualty services in America. Allstate provides insurance products on auto, home and life through various channels including insurance agencies, financial representatives and other electronic platforms. The company manages three brands in its portfolio: Allstate, Encompass and Esurance. By the end of its 2013 fiscal year, Allstate has total assets of about $123.5 B and total shareholders’ equity of about $21.5 B. Along with the property and casualty insurance industry which has been driven by the stronger economy, Allstate has achieved consistent growth since the financial crisis. Allstate’s current stock price already exceeds our target price for the company which is $55-66. The year-to-date return of this stock is over 27%. Without changing our forecast of the company’s fundamental, we believe the company is now fairly valued by the market and thus we recommend a sell. The Hartford (HIG) Recommendation: HOLD






Shares Outstanding (M)

431.48 M 2013 EPS 0.37

Beta 1.81 2014 EPS 3.61


The Hartford Financial Services Group (“Hartford”, “the company”), founded in 1810, is a fortune 500 company based in USA. With its headquarters in Connecticut, the company is providing a wide range of products including auto and homeowners’ insurance, business insurance, employee benefits and mutual funds. By the end of fiscal year 2013, the company’s total asset is $278 B and total stockholder equity is $18.9 B. We recommend holding the stock because the macro-economy is favorable to property and casualty insurance companies. The high auto sales and rising housing market continue driving the industry’s total sales as well as profitability. Hartford has been putting efforts to trim its annuity business and refocus on property and casualty insurance business. Our target price for Hartford is $44-54 given our forecast of its future growth in the property and casualty insurance business. Chubb(CB) Recommendation: NO ACTION






Shares Outstanding (M) 235.81 M 2013 EPS 9.08

Beta 0.86 2014 EPS (est.) 9.17


The Chubb Corporation (“Chubb”, “the company”), founded in 1882, is a global property and casualty insurance provider. With its headquarters in USA, the company also maintains international operations in Europe, Latin America, Asia and Australia. The company’s insurance products are grouped into three units: personal insurance, commercial insurance and specialty insurance. By the year end 2013, total assets of the company reached $50.4 B with $15.6 B of total stockholder equity. Though we believe that a growing economy with increasing consumer confidence and decreasing employment rate will keep driving the whole industry, given Chubb’s conservative operation philosophy, we do not see the company can achieve higher growth than main competitors. Furthermore, through our comparison of the company’s key valuation ratios

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(P/E, P/B) with its competitors’, Chubb’s stock is relatively more expensive. Our DCF model also confirms a fair value lower than what it has been traded recently, suggesting the stock is a bit over-valued. Our target for Chubb is $72-79 and we recommend no action for the company. Tanger Outlet (SKT) Recommendation: BUY







Beta 0.31 2014 EPS (est.) 1.22


Tanger Factory Outlet Centers, Inc. (“Tanger”, “Tanger Outlet”, “the company”), founded in 1981 in Greensboro, North Carolina, is a self-administered, self-managed real estate investment trust in both USA and Canada. As one of the biggest owners and developers of outlet shopping centers in North America, the company focuses on the acquisition, development, leasing and management of upscale outlet shopping centers. The company was listed on NYSE in MAY 1993 as the first public traded outlet center developer. By the end of 2013, the company owns 44 shopping centers with 13.3 million rental square feet. Our target price for Tanger is $45-55. We recommend a buy on the company not only because the growth it has achieved in the past but also based on its strengthening fundamental, which will lead to continuing growth in the future. The company’s funds from operation, total revenue, total rental square feet and average rental price all have been increasing in the past five years, with its average occupancy rate stays stable and high. Given the company’s undergoing new shopping center projects, its total rental square feet will keep growing in the next five years, so will its rental price driven by the increasing disposable income per capita. AvalonBay (AVB) Recommendation: NO ACTION






Shares Outstanding 132 M 2013 EPS 2.78

Beta 0.32 2014 EPS (est.) 4.05


AvalonBay Communities, Inc. (“AvalonBay”, “the company”), founded in 1978 and based in Arlington, VA, is a publicly traded real estate investment trust. As the second largest apartment REITs in the US, the company engages in the development, redevelopment, acquisition, and ownership of multifamily communities across the US. Our recommendation for the company is a buy. AvalonBay’s current stock price as of November 30th is $160.79 and our target price is $177-187. We identified three main drivers for the company. Firstly, the decreasing unemployment rate is creating a higher demand for rental apartments in metropolitan area where most of AvalonBay’s properties are located. Secondly, the number of American renter households has been increasing since the financial crisis and the trend is expected to continue in the future. Lastly, AvalonBay has been developing new communities to meet the growing need. The total number of rental apartments the company holds will be increasing from 72,811 in 2013 to 84,693 in 2018. At the meanwhile, we also expect the average annual rental price of the company’s apartment will be increasing from 19,934 in 2013 to 23,265 in 2018. Both the industry-wise and company-wise positives lead us to make the buy recommendation.

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Waddell & Reed Financial, Inc. (WDR) Recommendation: NO ACTION Special Analyst: Mike Fleagle







Beta 2.18 2014 EPS (est.) $3.78


Waddell & Reed is an asset manager based in the Kansas City area who has suffered recently from outflows stemming from sub-par performance and portfolio manager changes. It appears, however, that asset outflows have begun to slow going in to the fourth quarter and concerns of management changes have been overblown. The company possess a strong built in advisor base and well known mutual-fund family and may be oversold in the near term; however high expense ratios and uncertainty around the management team deter us from adding the company to the portfolio. Due to the stock’s sell off from the summer of 2014, we thought that there could be value in the firm as began to trade at a discount to its peers. However, the firm has pressure on its high fees from competitors who offer funds at lower expense ratios and long term pressures from ETFs and passive management (which they are susceptible to due to their large exposure to retail investors and equity markets). While the firm has some brand equity in its mutual fund family as well as a large captive advisor base, the long term pressures on its core business from the market was too much to add long term value to the fund.

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HEALTHCARE

Analysts: Qi (Alice) Cui and Jake Johnson

Typically, the healthcare sector is viewed as a defensive play and in year 2014 healthcare sector continues to benefit from the increasing aging population and the tailwind from Affordable Care Act. Accordingly, we invested in the sub-industries within the healthcare sector that we think are well positioned to benefit from the ongoing trends in the healthcare sector. Given the Obama administration’s emphasis on reducing healthcare spending by investing on IT technologies, we remain positive in the healthcare IT industry by holding Cerner Corporation to the portfolio. Cerner has industry leading solutions in population health and revenue cycle management, positioning them well for future growth. However, given the volatility of Cerner shares and the YTD run-up of the share price we are reducing the position in favor of other healthcare companies. For the pharmaceutical industries, our initial holding Teva Pharmaceuticals is in generic drug industry while Celgene Corporation is in biotech industry. Both two stocks have outperformed with 39.6% and 40.5% returns. We think at this point it is wise for us to reap the benefit and sell all our current holding on TEVA and CELG considering the potential downside risk. We look at three new stocks to add in the pharmaceutical industries: The first one is Perrigo Company PLC, a well-positioned OTC pharmaceuticals which has strong relationships with their customers in a breadth of product offerings. The second one is Anika Therapeutics, a small-cap biotech company, which will benefit from the recent approval of new drug and the expanding market size due to increasing aging and obesity population. The third one is Baxter International, the leader in treatment of hemophilia with limited downside risk. Overall, we suggested equal weight for the health care sector and we assigned the rest of the weighting to healthcare ETF.

Teva Pharmaceutical (Teva) Recommendation: SELL






Shares Outstanding (M) 14 M 2013 EPS 1.49

Beta 0.71 2014 EPS (est.) 2.95


Teva was an existing holding and had a good performance this year. Despite the concerns on the patent expiration of Teva’s blockbuster drug Copaxone in May 2014, Teva enjoys an YTD return is 39.6%. The most positive news would be Teva’s successful launch of the higher dosage Copaxone, which enjoys the same efficacy and safety profile as the current one but needs much less patient administration. The new Copaxone will not expire until 2030, and 50% of current patients have already been transferred to this new drug. For the old Copaxone, the U.S. Supreme Court was hearing Teva’s appeal on patent case since October. No official ruling has come out yet and it is possible that the old patent will not be expired until May 2015. Either way, this method brought Teva valuable time to transfer current patients to the newly developed higher dosage drug. The new CEO, Erez Vigodman, known as a turnaround specialist will also bring positive development for Teva. The management plans to achieve $2 billion annual cost reduction goal by 2017, with 50% achieved in 2014 and 70% achieved in 2015. While the Q3 2014 results suggested that the management has been on track in the cost-reduction program, the program itself is a bit aggressive and we are not sure whether the management can continue to fulfill the goal in the future. What’s more, Copaxone contributes 40% of profit for Teva and while Copaxone has been recommended treatment for years, we have concerns about potential competition from generics and other oral treatment products. The downside risk could be huge if the generic drug proves to be successful and the reimbursement is pressuring the conversion to lower cost generics. In light of these negative happenings, we revised our expectations leading to a recommendation to sell our stake in Teva.

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Celgene Corporation (CELG) Recommendation: SELL







Beta 1.12 2014 EPS (est.) 5.53


Celgene was an existing holding and had a great performance this year. Before we sold it, we have 4.5% holding in the HF portfolio and the stock price has gone up over 40% since May 2014. Favorable positives include favorable outcome from patent case on Revlimid, Otezla Approval in US for Psoriasis in September 2014 etc. Celgene is a star performer compared with other biotech and branded drug peers. The profitability ratio, liquidity ratio, and leverage ratio are all better than peers. We are also impressed by management team’s performance and we continue believe Celgene is a company with long-term value. That being said, its current stock price already beats our estimate and is closed to the street consensus. Considering the risky nature of biotech industry and Celgene’s highly reliance on Revlimid, we think at this point it is wise for us to reap the benefit and sell all our current holding on CELG. Mylan Inc (MYL) Recommendation: NO ACTION



52 Week Range $41.26 - 59.60 Price/Book 6.32




Beta 1.21 2014 EPS (est.) 2.05


We originally initiated coverage on Mylan as a possible replacement for Teva. Mylan is developing high-value pipeline like generic Copaxone and has the largest generic pipeline compared with other competitors. Also, the generic utilization rates in some of Mylan’s key markets are still underserved. The downside, Mylan will be facing more buyer pressure. Cardinal Health already contributes to 15% of revenue and it takes a further step and forms the largest generic drug sourcing JV with CVS this year. Also, no Dividend, highly leveraged and less impressive EBIT margin make us have second thoughts. Lastly, Mylan want to realize the tax inversion goal by acquiring Abbott’s non-US assets and shifting the HQ to Europe, but the newly proposed tax rule casts uncertainty on whether this deal will continue. For that reason, we recommend not adding Mylan to the portfolio.

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Anika Therapeutics (ANIK) Recommendation: BUY



52 Week Range $ 28.79 - 52.49 Price/Book 3.42


Market Cap (M) 580.5 M ROE (ttm) 24.95%


Beta 1.56 2014 EPS (est.) 2.56


Anika Therapeutics is a small-cap biotech company that develops hyaluronic acid (HA) based products for tissue protection, healing and repair. Anika mainly competes in viscosupplements market, which estimates to expand at 9.5% CAGR for the next five years due to increasing aging and obesity population. MONOVISC got FDA approval in Feb 2014 and is believed to be an important catalyst considering the industry trends towards single-injection treatment and there are fewer competitors in the current market. Risks to thesis include lack of revenue diversity as about 75%~80% of revenue comes from viscosupplementation product ORTHOVISC and MONOVISC. In addition, Anika will be facing competition from large pharmaceutical company Sanofi which has dominated the US single-injection market for years. But products from Anika have their competitive advantage and we believe in the long-term performance of the company. We would like to include Anika in Henry Fund portfolio.

Cerner (CERN) Recommendation: HOLD







Beta 1.17 2014 EPS (est.) 1.65

Dividend Yield 0% 2015 EPS (est.) 1.99

Cerner was an existing holding when the current management team came in to the fund, and we continue to see upside in the company. Cerner has industry leading solutions in population health and revenue cycle management, positioning them well for future growth. Cerner has aligned solutions with health care provider needs, increasing Cerner’s win rate versus competitors while building record bookings backlog. Building on successful implementation of managed services RevWorks and ITWorks, along with successful partnerships with health systems we believe that Cerner will be a strong performer in a fairly valued market, even in a downturn, making them an adequate defensive play. Baxter International (BAX) Recommendation: BUY







Beta 0.82 2014 EPS (est.) 4.60


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When we originally initiated coverage on Baxter in October, the stock had sold off substantially creating an opportunity to get in at a great value. The stock has run-up slightly since then, but we still see it as a value opportunity within the healthcare sector. As a diversified healthcare company, Baxter has the leading market share in the treatment of hemophilia and renal therapy, as well as successful products for immune disorders, IV therapies, and other products. We saw the hemophilia and renal positions as the largest growth drivers for Baxter, with each market expected to expand. However, Baxter is facing intense competition in the hemophilia market from Biogen Idec’s ELOCTATE, which could negatively impact Baxter’s hemophilia market share. However, hemophilia patients have shown trepidation in switching treatments, pointing to their treatment loyalty. Overall, we see Baxter as a great value opportunity with very limited downside.

Perrigo Company PLC (PRGO) Recommendation: BUY Special Analyst: Jarom Dilworth







Beta 0.75 2015 EPS (est.) 5.76


Perrigo Company PLC provides great exposure to the over-the-counter (OTC) pharmaceutical market. They have engaged in some high-profile M&A activity during the last year including a tax inversion with the acquisition of Elan Pharmaceuticals and they recently announced the acquisition of Omega Pharma NV, the fifth largest OTC manufacturer in Europe. Perrigo develops, manufactures, and distributes generic OTC pharmaceuticals in many categories including consumer health. Their customer base includes Walmart, Sam’s Club, Costco, Target, CVS, Walgreens, & Kroger. They recently added another customer in Amazon.com. With such a strong customer base, as OTC categories expand to include nasals, overactive bladder, ophthalmics, and BPH Perrigo will be well-positioned to capture the additional revenue stream from the new product categories and easily add the new products to their existing distribution network. They currently have over 11,000 SKUs in over 2,800 products with over 1,100 customers, which shows the strength of Perrigo’s generic manufacturing model and their ability to work well as a fast second-mover into the category.

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INDUSTRIALS

Analyst: Michael Emgarten The US industrial sector index (IYJ) underperformed the S&P 500 index (SPY), with a 7.20% return YTD compared to 11.48% return for the S&P 500. Manufacturing capital expenditures lagging total market growth during the recovery caused some underperformance. Additionally, when oil prices fell drastically with the OPEC announcement that supply would not be curtailed, many industrial firms that serve customers in the energy industry saw share price declines. Negative sentiment in the latter half of 2014 regarding lowered growth expectations in China and the European Union also put downward pressure on industrial firms hoping to see sales growth in those markets. The industrials sector is currently underweighted compared to the S&P 500 despite all three of the holdings having significant forecasted upside primarily because of uncertainty regarding oil prices and how significantly related stocks will be impacted. Quanta Services (PWR) Recommendation: BUY




YTD Return -0.44% ROA (ttm) 7.24%



Beta 0.73 2015 EPS (est.) $2.01


Quanta is the largest electrical transmission line contractor in the United States with a 6.4% market share. Quanta recently announced that they had been awarded the largest ever transmission line construction project, valued at over $700M and stretching over 684 miles in Eastern Canada. Quanta was one of the first major electrical contractors to expand into Canada because they saw that they were only a few years behind the US in terms of addressing the state of their electrical grid, and their early entrance into the market has allowed them to win some of the largest electrical contracts ever awarded. Quanta has now made an acquisition in Australia in order to use the same strategy to become the market leader by the time their government is ready to improve their electrical grid. Quanta is also the only oil and gas pipeline construction firm with “pigging” technology, which are devices that are run through a pipeline to clean and inspect them for structural weaknesses. The acquisition of this technology has significantly increased the amount of repair work they receive and has helped set them apart as a solutions provider instead of just a construction firm. The expansion into Canada was also very beneficial for Quanta’s pipeline segment, and their ongoing expansion to Australia promises to deliver a similar level of growth. We believe that because Quanta is the industry leader in the transmission line construction industry and because the deficiencies in the North American electrical grid will only become more pronounced over time, that Quanta has significant growth potential and should remain in the Henry Fund.

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Waste Connections (WCN) Recommendation: BUY







Beta 0.37 2015 EPS (est.) $1.98


Waste Connections has decided that instead of operating like Republic Services and making enormous acquisitions in an attempt to imitate industry leader Waste Management, they will avoid engaging in direct competition with major competitors and focus on smaller markets which can be easily consolidated and defended against potential rivals. Currently about half of WCN’s collection revenues comes from markets where they hold an exclusive contract to service the entire county/municipality, and these contracts typically range from 5-15 years in duration. The other half of their collection revenue comes from markets that they have consolidated and vertically integrated to minimize the threat of new entrants. The acquisition of R360 in 2012 has brought WCN into the higher growth oil and gas exploration and production waste industry (E&P). This segment of the company accounted for 13% of total firm revenue in 2013 and has a 50% gross margin; disposal has a 35% gross margin. WCN was able to receive the permits necessary to turn many of their existing landfills located near some of the primary oil basins in E&P certified landfills, and this has allowed them to become the E&P waste market leader. The continued success of their niche strategy in the municipal solid waste category, along with their very profitable growth in the E&P segment makes, and the 30% discount it is trading at relative to our DCF valuation, makes the stock very attractive at this time.

Delta Airlines (DAL) Recommendation: BUY







Beta 0.86 2015 EPS (est.) $3.23


Delta’s management team began restructuring their fleet and improving their balance sheet in 2009. By 2016 it is forecasted that their annual interest payments will be reduced by almost $1 billion, and they will have cut more than 200 of their 50-seat regional jets, which are the least fuel efficient and receive the lowest customer satisfaction ratings. The restructuring that has already taken place has resulted in free cash flows exceeding $2 billion a year for the last three years and has allowed them to start returning meaningful amounts of money to their shareholders for the first time in the history of the company. In additional to generating enough free cash flows to return $3 billion to shareholders over the next three years and pay down their debts by 2020, Delta has also been able to make the Sky Team Alliance the largest airline alliance on the planet. They currently lead their competitors in terms of percentage of flights arriving on time and customer satisfaction ratings. Delta is currently trading at a discount because of the stigma associated with the airline industry as a whole, but in recent years the management team has

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presented a clear vision for how they will utilize their fleet maintenance cost leadership to utilize secondhand planes in order to increase ROIC and optimize the capacity assigned to routes in order to continue to lead the industry in PRASM and utilization. We believe that Delta is a rare value in the current market and that capacity restructuring efforts and their strategy to operate an older fleet to minimize costs will help insulate them during future downturns in the industry.

Celadon Group (CGI) Recommendation: NO ACTION







Beta 1.65 2015 EPS (est.) $1.33


Celadon Group currently has the largest exposure to cross border freight in the trucking industry, with approximately 50% of their freight revenues coming from cross border activity and 20% of their revenue coming from cargo that originates outside the US. Celadon’s early investment in its Mexican subsidiary, Jaguar, and partnerships with other Mexican companies shortly after the North American Free Trade Agreement was passed in 1995 was passed, and then amended to prohibit Mexican firms from operating in the US and vice versa, has proved very beneficial for the company. Owning the trucks that must pick the cargo up at the border minimizes the risk of a prolonged delay at the drayage point and integrated IT systems ensures that customers have complete visibility of the status of their shipment throughout its journey, something that most competitors cannot provide. While Celadon currently has an advantage at getting freight efficiently and reliably across the Canadian and Mexican borders, larger competitors are making investments that threaten to close the gap in service. A transportation company was primarily seen as an attractive addition to the portfolio because it would help hedge against the large concentration of stocks tied to oil production currently in the Henry Fund, but unfortunately most of the price movement that we sought to hedge against has taken place over the past month and our valuation does not show that Celadon has enough upside to replace a current holding.

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TECHNOLOGY

Analysts: Adam Conzemius, Jake Johnson, Katie Carlson

The S&P 500 Technology Sector YTD return is 22.8%, which significantly outperformed the S&P 500’s 14.1% YTD return. These results are despite a 7.6%% downward sector correction earlier this fall as the markets panicked on lower global economic forecasts for next year. While the sector has outpaced the broad index throughout the year, our team still sees the technology sector as having room to run as most of us remain positive on the sector overall. The technology sector analysts sought to identify a mixture of firms ranging from very strong core businesses, noticeably undervalued companies, to high growth companies. With those thoughts in mind, we sought stocks that have low correlation to each other and are a mixture of defensive and high alpha generating positions. When we inherited the sector from the class of 2013, the portfolio included six technology holdings: Accenture (ACN), Apple (AAPL), Corning (GLW) Google (GOOG), SanDisk (SNDK), and Qualcomm (QCOM). As the new industry trends in additional internet users, cloud computing, and mobile device are re-shaping the landscape, we began to look for firms that would benefit from those trends. We analyzed various companies under this investment philosophy and decided to add Adobe (ADBE) to the portfolio. We added Ansys (ANSS) to the portfolio based on its sound core business and ability to diversify the sector. Finally, Activision Blizzard (ATVI) was added to the portfolio based on it having the best managed operations in its industry and it being undervalued. We sold our position in Accenture, SanDisk, and Qualcomm and decreased our weight on Apple to make room for new holdings. We keep the technology sector weighting equal to market weight due to our mixture of defensive and alpha generating positions. The equity market looks tight for the year ahead as many companies are fairly valued. We remain cautious that a market correction could occur, but are optimistic that it is possible to find solid companies that will generate value for the Henry Fund.

Qualcomm (QCOM) Recommendation: SELL







Beta 0.98 2014 EPS 5.06


Qualcomm was an existing holding when the current team assumed management of the fund, and the company seemed poised for growth on the underdeveloped state of global wireless networks. We initially recommended continuing to hold Qualcomm as emerging markets were in the process of updating their outdated networks to maintain pace with the growing smartphone market and data consumption. Qualcomm was positioned to capitalize on the upgrade of emerging markets’ wireless networks from 3G to 4G, as Qualcomm’s large portfolio of patents and proprietary CDMA technology brought in significant licensing revenue for many of the smartphones sold, including devices by leading companies Samsung, Apple, and Lenovo. However, Q4 results in November saw Qualcomm miss on Q4 revenue and EPS along with the full year view. On top of the misses, the Chinese anti-trust probe regarding Qualcomm’s royalty fees in China continues to hang over the company. These negative results caused a sell-off, and dampened the expectations for Qualcomm going forward. In light of these negative happenings, we revised our expectations leading to a recommendation to sell our stake in Qualcomm.

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Apple, Inc (AAPL) Recommendation: HOLD







Beta 0.94 2014 EPS 6.45


An existing holding, Apple had a great year on the successful launch of new products in the iPhone 6 and 6 Plus, as well as the newest iPad Air. Along with these products, Apple announced their Apple Watch, which will hit the market in 2015. These products all helped bolster Apple’s product portfolio and product significant growth drivers in the future. Apple also addressed functionality of devices by entering an enterprise partnership with IBM and rolling out Apple Pay. The enterprise partnership will see Apple and IBM working together to develop enterprise applications for the iPad and iPhone, giving functionality that the iPad has not seen in a business setting. Apple Pay further integrates the iPhone into consumers’ everyday lives, allowing people to use their iPhone as a payment device, with credit card information loaded into Apple Pay. These developments all contributed to Apple’s 40.24% YTD return, and contributed to our recommendation to continue holding Apple in the portfolio. We are reducing Apple’s weight only because its great success this year saw the weight in our portfolio run up to 7.5%, which is quite large for our portfolio. We believe Apple is poised for continued growth into 2015 as we continue to hold the company in the portfolio. ANSYS (ANSS) Recommendation: BUY







Beta 1.05 2014 EPS (est.) 3.62

Dividend Yield 0% 2015 EPS (est.) 4.02

As the leader in the engineering simulation software industry, ANSYS provides physics simulation software packages for any simulation environment. ANSYS works with 96 or the Fortune 100 Industrial companies in a wide range of industries, providing diversification among industries. ANSYS is positioned to benefit as new product development becomes more technologically complex, as companies will depend on effective product simulation to simulate the multiple physics groups that interact in new products. Users of ANSYS products have traditionally been engineers with advanced degrees, working in product development. ANSYS has taken note of the discrepancy of engineers with advanced degrees compared to undergraduate degrees, with the undergraduate engineers market size dwarfing that of the advanced degree engineers. ANSYS is working to capitalize on this huge growth opportunity by simplifying their software so undergraduate level engineers can use it. This provides a large growth opportunity for ANSYS, on top of the opportunity that already exists with their current user base. We believe that ANSYS is a defensive play within technology, something that we are looking for in a fairly valued market. ANSYS provides a name with minimal downsize, and the potential to grow their user base significantly.

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Accenture Plc. (ACN) Recommendation: SELL Sold May 5, 2014






Shares Outstanding 655.50 M 2013 EPS $5.08

Beta 0.94 2014 EPS (est.) $4.14


Accenture was an existing holding when the current team assumed management of the fund, and the previous team had placed a hold on the stock because it had 5.3% - 9.8% more upside for the year. We recommended a sell on the company based on its declining revenue per employee, weak Europe and Asia Pacific revenue outlook, top level management issues, and the fund had better opportunities in other investments. A poor performance in Q2 caused the stock to drop from $83.52 to $78.81, but the newly updated DCF model only projected 10.8% upside. With limited upside and a delayed business strategy, this was not a stock to continue holding. Overall, Accenture has indeed underperformed the S&P 500 so far, and we are pleased to have sold this stock at an opportune time. F5 Networks, Inc. (FFIV) Recommendation: NO ACTION






Shares Outstanding 73,783,000 2013 EPS $3.53

Beta 1.34 2014 EPS (est.) $5.40


F5 Networks was initially covered because key industry growth drivers of more internet users and increased smartphone internet usage made it appear to be an attractive business. The company is highly levered to telecommunication company capital expenditure and it sells diameter signaling software, which is a key component to building out a 4G LTE network. In addition, its products are the industry standard for application delivery controllers, which allow websites to handle tremendous internet traffic with ease. However, as an investment, F5 Networks looked like it could be risky because one round of network upgrades was halfway completed in the United States telecommunications sector, and European telecommunication companies looked like they may delay capital expenditures again. The stock price is very volatile as well. Finally, our portfolio already held a number of other companies that have exposure to telecommunications capital expenditure and similar industry trends. With these factors in mind, we took the additional risks into consideration and recommended a no action. In hindsight, we can see that the stock’s performance was quite good, but it posed risks that the Henry Fund portfolio was not prepared to take.

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Google Inc. (GOOGL) Recommendation: BUY







Beta 1.31 2014 EPS (est.) $26.62


Google was an existing holding of the Henry Fund from the previous analyst. The company is best in class in the internet software arena and has many opportunities ahead of it. Worldwide, digital advertising is expected to grow at a 10.7% CAGR through 2018 and reach a market size similar to that of TV, $194.5 billion. We project Google increasing its share of this market to 11.3% in 2016. Google Sites growth at 16.9% five year CAGR and Google Play growth at 27.3% five year CAGR position it as one of a few large companies with such high growth prospects. While Google is in the midst of CPC price declines due to current lower value mobile advertising, we believe this represents a favorable opportunity for the company to grow in other markets and creates an opportunity for more value-added advertising techniques, which could result in increased revenues. Google is in a remarkable position as a mega market cap company with significant growth opportunities. We placed a buy recommendation on this company with the expectation that it can deliver 20%-24% upside. SanDisk Corporation (SNDK) Recommendation: SELL







Beta 1.61 2014 EPS (est.) $4.60


Henry Fund purchased SanDisk on the heels of a competitor, SK Hynix, 2012 factory fire, which greatly reduced industry supply of NAND memory. Since that time, the industry has rebuilt its supply and the hefty price premium that it can charge for its products is disappearing. The industry would have to maintain the recent supply discipline and not oversupply the market to support the fair value market price that it currently trades at. SanDisk revenues are expected to grow at 9.5% CAGR over the next five years based primarily on SSD (solid state drive) revenues growing at a 21.7% CAGR. The combined increase in smartphone storage capacity and significant growth of the smartphone market should cause the embedded and removable storage segments to grow revenue at a 7.9% CAGR. The key concern was that SanDisk was currently trading 3% under the DCF price when taking those growth drivers into consideration. At a 1.61 beta and little upside potential in the stock price, we firmly recommended a sell on SanDisk.

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Activision Blizzard Inc. (ATVI) Recommendation: BUY







Beta 1.13 2014 EPS (est.) $0.93


Activision Blizzard had a good product portfolio with a new Call of Duty, World of Warcraft, Destiny, and Skylanders built by a solid management team with a track record of creating and managing excellent franchises. We had a positive industry outlook, as video game console sales have been very strong, two times the pace of the last replacement cycle. Activision Blizzard was a best in class pure play video game company with the highest net income and reasonable operational discipline. Competitors such as Electronic Arts and UbiSoft opted to chase growth through mobile gaming and had inflated R&D budgets to unmanageable levels, which deteriorated their profits to almost nothing and negative, respectively. TakeTwo slashed its R&D spending to almost nothing and will not keep pace with product innovation going forward. Despite these differences, Activision Blizzard traded at a discount to those companies, so we thought it was undervalued. We recommended a buy rating with a 15%-33% upside based on a positive sales outlook and reasonable valuation on Activision Blizzard.

Corning, Inc. (GLW) Recommendation: HOLD






Shares Outstanding (M) 1.28 B 2013 EPS 1.23

Beta 1.64 2014 EPS (est.) 1.29


Corning, Incorporated was an existing holding when we assumed management of the fund, originally added to the portfolio in 2012. Corning has performed well, with an overall holding return of 39.7% as of December 2014. After reviewing the holding in spring 2014, we believe that there was additional growth to be captured through their January 2014 acquisition of Samsung Corning Precision Materials, which manufactures LCD glass, in their Display Technologies segment. We also believe that the company would be able to grow within their Optical Communications segment, the second largest revenue driver for the company, through Corning’s expansion of their DAS fiber technology. We believe the majority of this growth will be recognized within 12-18 months of our review, and therefore we have recommended to hold this stock in the portfolio. We have recommended to decrease the weight of Corning from 3.25% to 3.0% in the technology sector as other companies have been added to the portfolio.

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Adobe Systems, Inc. (ADBE) Recommendation: BUY







Beta 1.12 2014 EPS 1.02

Dividend Yield N/A 2015 EPS (est.) 1.14

Adobe Systems, Inc. is a software company that provides digital media, digital marketing, and print and publishing solutions to enterprise customers and creative professionals globally. In 2013, Adobe changed their service model in their Digital Media segment from a perpetual license model to a subscription model. From this, we saw significant growth in this segment as they continued with this transition of moving customers to a more predictable, subscription based revenue model, as well as significant growth within Digital Marketing as more enterprise customers are requiring the use of digital platforms for their marketing needs. After reviewing the stock in October 2014, when the price was approximately $62.00, we saw significant upside as our target price range was set between $76-78. However, by December, the price has risen to over $71, and our upside has become substantially less. Due to this, we have still decided to add this to the portfolio, but at a lesser weight of 2% of the technology sector holdings. .

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TELECOMMUNICATIONS

Analyst: Katie Carlson

The telecommunications sector accounts for 2.40% of the active Henry Fund portfolio, which is the current telecom weighting in the S&P 500. We decided it would be best to market weight the sector as we do not see a lot of growth within the sector. Throughout the course of the year, we analyzed Shenandoah Telecommunications, Cincinnati Bell, and Verizon Communications. We sold out of Shenandoah Telecommunications in spring 2014, and we are going to sell out of Cincinnati Bell and buy Verizon Communications in December 2014. We saw no upside in Shenandoah Telecom or Cincinnati Bell for various reasons, mostly due to their small size and therefore limited growth potential. As selling out of these two companies would leave us with no holdings in telecom, we decided to review Verizon as a potential addition. Although we do not see significant growth within Verizon, we believe that with their consistent earnings and favorable dividend yield it would be the best bet for the portfolio. Shenandoah Telecommunications (SHEN) Recommendation: SELL





Market Cap (M) 727.01 M ROE (ttm) 12.88%


Beta 1.95 2014 EPS (est.) 1.40


Shenandoah Telecommunications is a company that provides wireless, wireline, and cable services to the Shenandoah Valley, located mainly in Virginia and West Virginia. We added SHEN to the portfolio in fall 2013, and after reviewing the stock in spring 2014, we decided that to sell our stake in the company. Over 59% of Shenandoah Telecommunications revenue is generated through Sprint Corporation’s network, a company that has experienced numerous years of financial struggle. Additionally, with Shenandoah Telecommunication’s size in comparison with some of the other major telecom competitors, we did not see a lot of growth in neither their wireless nor wireline segment. Due to these reasons, we recommended a sell rating for Shenandoah Telecommunications. Cincinnati Bell (CBB) Recommendation: SELL



52 Week Range $3.17 – 4.13 Price/Book N/A


Market Cap (M) 691.53 M ROE (ttm) N/A

Shares Outstanding 209.24 M 2013 EPS -0.32

Beta 1.62 2014 EPS (est.) 0.04

Dividend Yield N/A 2015 EPS (est.) 0.03

Cincinnati Bell is another small telecom company that was added to the portfolio in fall 2013. They provide wireless and wireline services to Greater Cincinnati and portions of Indiana and Kentucky. In early 2014, they announced they announced they would no longer be offering wireless services to customers as they were selling off their wireless division of the company, which made up 16% of revenues in 2013. The

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company also holds a 44% stake in a previously wholly owned subsidiary, Cyrus One, which IPO’d in 2013 and has done very well. After reviewing CBB, we believe that the majority of their value is wrapped into the Cyrus One investment, as they value their stake at $740 million, greater than their current market cap. We also do not believe there will be growth in their remaining wireline segment, due to their small size. Therefore, we recommended a sell rating for Cincinnati Bell. Verizon Communications, Inc. (VZ) Recommendation: BUY






Shares Outstanding 4.15 B 2013 EPS 2.84

Beta 0.60 2014 EPS (est.) 3.87


Verizon Communications was reviewed in fall 2014 with a recommendation to add to the portfolio. Verizon remains a strong competitor among the major telecom providers, with consistent earnings reports and a strong dividend yield at 4.5%. Verizon is highly saturated within the wireless market and the market itself is extremely penetrated, driving telecom providers to switch their focus to customer retention and major price competition between the major providers. After reviewing the company, we believe that Verizon Communications is the best positioned within telecom and would be the best addition to the portfolio in our telecommunications sector. They are the only telecom provider that has fully completed their 4G LTE wireless upgrade to their network, as well as consistently increasing their dividend yield every year. Although there are concerns with high regulation by the FCC and the high demand for spectrum licenses with all of the major telecom providers, we believe that Verizon will remain a strong competitor and continue to experience positive earnings in the future. Therefore, we have recommended a buy rating for Verizon Communications.

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UTILITIES Analyst: Adam Walter The Utilities sector includes the following industries: Electric Utilities, Gas Utilities, Independent Power Producers & Energy Traders, Multi-Utilities, and Water Utilities. The current Henry Fund Holdings in this sector as of December 8, 2014 is UGI Corporation (UGI, Multi-Utility). The Utility sector performance is highly dependent on interest rates and a favorable regulatory environment to encourage infrastructure investment. Despite the Federal Reserve completing its bond buying program in October, the fed funds rate and the 10-year treasury yield should remain near all-time lows for the next six months, providing a favorable borrowing environment to finance growth. Further, favorable regulatory mechanisms, such as Distribution System Investment Charges (DSIC) allow utilities to recover infrastructure investments more quickly. These drivers are essential to monitor moving forward for companies within this sector.

UGI Corporation (UGI) Recommendation: HOLD







Beta 0.69 2014 EPS (est.) $1.99


UGI Corporation is listed on the NYSE as UGI and operates in the marketing and distribution of energy products and services in the U.S. and Europe, driving above average earnings growth through its four core business segments: AmeriGas Propane, Midstream & Marketing, UGI International, and Gas Utility. UGI operates in both regulated and unregulated categories and maintains 26% ownership of the nation’s largest propane distributor and marketer, AmeriGas Partners. With 34% and 66% of revenue driven by regulated and unregulated categories, UGI is well positioned to continue to return value to shareholders through strong earnings growth and competitive dividend payouts, as evidenced of their goal of annual dividend increases of 4%. Although natural gas prices have remained below $5/MMBtu over the last few years we believe UGI’s strategic interests in the Marcellus shale provide competitive advantages for UGI’s midstream and marketing business as natural gas prices rebound over our five year forecast.

American Water (AWK) Recommendation: BUY







Beta 0.31 2014 EPS (est.) $2.37


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American Water Works Company, Inc. is listed on the NYSE as AWK and is the largest investor-owned water and wastewater utility in the U.S. providing services across 40 states and serving 14 million people. The company operates under two reportable segments: regulated business and market-based operations, which represent 89% and 11% of total revenue. Its regulated segment serves four customer classes, including: residential, industrial, commercial, and public and other. The company’s competitive advantage derives from its geographic diversification, as well as its strategic positioning in states with favorable utility infrastructure replacement surcharges. Industry tailwinds support ongoing infrastructure build out that should prove favorable for rate case increases over the long-term for AWK. With a planned $5.8B capital expenditure (capex) program over the next 5 years, AWK will provide a strong business case for rate increases as 88% of this budget is allocated to its regulated business. AWK also plans to allocate a significant portion of capex to acquisition growth in order to increase their customer base and top-line revenue growth.

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Statement of Security Holdings

Shares Price Value Weight Shares Price Value Weight

Allstate ALL 1792.9 54.27 97,302$ 2.9% 1468.4 68.15 100,069$ 2.6%

Apple AAPL 202.7 556.07 112,727$ 3.4% 2547.5 118.93 302,977$ 7.8%

BorgWarner BWA 1743.9 56.56 98,635$ 2.5%

Capital One COF 2091.0 71.63 149,779$ 4.5% 935.4 83.20 77,826$ 2.0%

Casey's General Store CASY 2073.0 83.72 173,547$ 4.4%

Cerner Corp CERN 2594.0 57.47 149,077$ 4.4% 3334.0 64.40 214,710$ 5.5%

CF Industries CF 348.0 217.38 75,653$ 2.3% 354.9 268.15 95,154$ 2.4%

Chevron CVX 965.6 122.44 118,234$ 3.5% 999.0 108.87 108,759$ 2.8%

Cincinnati Bell CBB 13000.0 3.56 46,280$ 1.2%

Citigroup C 3515.9 53.97 189,756$ 4.9%

Corning GLW 5772.0 17.08 98,586$ 2.9% 5890.2 21.02 123,813$ 3.2%

Costco Wholesale COST 1232.2 142.12 175,126$ 4.5%

CVS Caremark CVS 1364.5 66.96 91,364$ 2.7% 1185.8 91.36 108,339$ 2.8%

DirecTV Group DTV 1945.0 66.11 128,584$ 3.8% 1022.0 87.71 89,640$ 2.3%

Google - Class A GOOGL 117.0 549.08 64,242$ 1.6%

Google - Class C GOOG 141.0 1059.59 149,402$ 4.5% 117.0 541.83 63,394$ 1.6%

Hartford Financial HIG 2099.5 41.30 86,709$ 2.2%

J.P. Morgan JPM 2760.6 57.22 157,959$ 4.7% 3431.2 60.16 206,424$ 5.3%

Plains All American PAA 2348.7 51.57 121,121$ 3.6% 1932.3 51.45 99,415$ 2.5%

Qualcomm Inc QCOM 1454.3 73.58 107,006$ 3.2% 1609.8 72.90 117,353$ 3.0%

Quanta Services PWR 3058.0 30.50 93,269$ 2.4%

Sandisk SNDK 1404.7 103.46 145,335$ 3.7%

Technip TKPPY 4087.5 16.30 66,627$ 1.7%

Teva Pharmaceutical TEVA 2623.5 40.76 106,935$ 3.2% 2797.8 56.98 159,418$ 4.1%

UGI Corp UGI 1777.7 40.26 71,570$ 2.1% 2733.8 37.71 103,092$ 2.6%

Universal Corp UVV 1832.8 39.99 73,295$ 1.9%

Waste Connections WCN 3143.3 47.21 148,396$ 3.8%

Energy Select Sector SPDR XLE 1798.0 79.82 143,516$ 3.7%

Healthcare Select Sector SPDR XLV 3431.0 69.61 238,832$ 6.1%

S&P 500 SPDR SPY 926.0 207.20 191,867$ 4.9%

Accenture ACN 1036.1 77.47 80,268$ 2.4%

Ace Limited ACE 739.5 102.78 76,007$ 2.3%

Becton Dickinson & Co BDX 956.3 108.59 103,849$ 3.1%

Bristol Myers Squibb BMY 1915.5 51.38 98,416$ 2.9%

Darling International DAR 5450.0 20.73 112,979$ 3.4%

Deere & Co DE 1265.2 84.24 106,582$ 3.2%

DuPont DD 695.9 61.38 42,715$ 1.3%

EMC Corp EMC 3664.9 23.85 87,408$ 2.6%

General Mills GIS 2206.7 50.43 111,284$ 3.3%

Gildan Activewear GIL 2935.1 48.47 142,263$ 4.2%

Lions Gate Entertainment LGF 3000.0 31.64 94,920$ 2.8%

MetLife Inc MET 2188.6 52.19 114,225$ 3.4%

MSC Industrial Direct Co MSM 1190.0 76.85 91,449$ 2.7%

Nucor Corp NUE 958.6 51.06 48,944$ 1.5%

Schlumberger SLB 999.2 88.42 88,346$ 2.6%

Verizon Communications VZ 1095.9 49.62 54,381$ 1.6%

Consumer Discretionary Select Sector SPDR XLY 809.8 65.60 53,125$ 1.6%

iShares Transportation ETF IYT 844.4 129.60 109,434$ 3.3%

Total Equity Portfolio 3,351,891$ 99.98% 3,905,812$ 99.99%

Money Market/Cash Account 690$ 0.02% 450$ 0.01%

Effective Portfolio Value 3,352,581$ 100.00% 3,906,261$ 100.00%

Year-to-Date Scholarship & Foundation Distributions 117,865$

S&P 500 Index 1,805.81 2,067.56

Security TickerNovember 30, 2013 November 30, 2014

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Income Statement

November 30, 2014 November 30, 2013

Beginning Fund Balance $3,352,581.50 Beginning Fund Balance $2,713,462.56

Cash Added -$ Cash Added -$

Dividend Income 42,118.70$ Dividend Income 54,189.13$

Interest Income 0.35$ Interest Income 0.35$

Total Income 42,119.05$ Total Income 54,189.48$

Total Capital Gains (Loss), Net $393,695.80 Total Capital Gains (Loss), Net $471,810.36

Taxes and Fees -$ Taxes and Fees -$

Scholarship Application $117,864.97 Scholarship Application $113,119.10

Miscellaneous -$ Miscellaneous -$

Ending Fund Balance $3,906,261.32 Ending Fund Balance $3,352,581.50

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