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Consumer Discretionary (PowerPoint)

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					Consumer Discretionary
Stock Presentation



Rajat Bakshi
February 27th,2007
                 S&P 500 Composition
           Telecommunication Services   Utilities
                   3.57%                            Consumer Discretionary
                                        3.35%
                                                          10.76%
                         Materials
                          3.05%

                                                                   Consumer Staples
                                                                        9.29%
Information Technology
       15.07%




                                                                         Energy
                                                                         9.69%



          Industrials
            10.82%




                          Health Care                     Financials
                           12.21%                          22.18%
                      SIM Composition
                                                Cash, 1.61%
                                           Utilities, 1.21%
                  Telecommunication Services,                         Consumer Discretionary, 7.82%
                           7.44%

                        Materials, 1.53%                                               Consumer Staples, 6.69%




                                                                                               Energy, 7.73%
Information Technology, 16.38%




                                                                                               Financials, 20.71%
               Industrials, 11.34%




                                                Health Care, 17.53%
Sector Recommendation

• Hold weight in sector
• Invest in Stocks in select
  industries.
                   Sector Breakdown



Coach Inc                             IDEARC Inc
  35%                                    1%


                                                   Viacom Inc
                                                      34%




   Carnival Corp
       30%
                          Current Holdings



Quantity           Security        Unit Cost       Market Price      Unrealized Gain/(Loss)


           12000   Carnival Corp          $39.83            $47.35                       83658


           14000   Coach Inc              $42.78            $48.93                     86039.8


            375    IDEARC Inc             $25.18            $35.00                     3683.66


           15850   Viacom Inc             $41.48            $40.39                    -17301.13
Coach Inc.
• Coach Inc. price was
  suppressed during this weeks
  market sell-off.
• The price is expected to return
  to fundamental level close to
  $51.32 in the near future.
• Based on today’s closing price
  of $46.01, we still have 13.71%
  upside in the stock.
                 Viacom Inc.

• Worldwide multiplatform, pure play
  content company.
• Business segments:
  – Cable Networks: 69% (revenues)
     • Dreamworks LLC, MTV Networks and BET
       Networks
  – Entertainment: 31% (revenues)
     • Paramount Pictures, Famous music
   Viacom Inc. Recent Developments

• January 11th 2007
• MTV Networks President & COO Michael
  Wolf and President Affiliate Sales Nicole
  Browning resign.
• February 12th 2007
• MTV Networks reduces workforce by 6%
• Apple Inc. announced Sony pictures
  available on iTunes
   Viacom New Strategic Initiatives

• You-Tube to remove 100,000 Viacom
  videos.
• Viacom in talks to give content to Joost for
  internet service in commercialized video
  content.
Viacom Valuations
Decreasing profitability
           Viacom Valuation

• Viacom implied equity value per share
  $38.95
• Downside to DCF -3.57%
              Limited Brands
• Current Price: $27.25
• Market Cap: $10.84bn
• Same store sales up 11% compared to 5 weeks
  ended Feb 4th last year.
• Sales of $1060 mn compared to $813.4 mn last year
  for the period.
                        Comparable Store Sales Increase (Decrease):


                                                Fourth    Fourth
                                   January    January Quarter      Quarter     Year     Year
                                   2007       2006    2006      2005      2006       2005
• Implied equity
  value/share: $33.33    Victoria's
                         Secret
• DCF gives 22.31%       Stores        7%       3%       10 %      3%        11 %     1%

  upside to market       Bath & Body
                         Works         19 %     (2%)      9%        1%       10 %      4%
  at last close of
  $27.25                 Express       14 %      (4%)     3%        6%        (1%)    (8%)
                         Limited
                         Stores        5%      (4%)      (4%)      (1%)      (4%)     (2%)


                         Total
                         Apparel       12 %     (4%)      1%        4%       (2%)     (6%)
                         Limited
                         Brands        11 %      0%       8%        3%       7%       (1%)
Porters 5 Forces
 Porters 5 Forces
      Retail shelf space valued at over $300 per sq ft.
       highest in industry.

      Sells high quality products to affluent customers - not
       greatly affected by economic downturns.

      High end products , low competition and brand
       value-high bargain power for Limited.

      Difficult to establish the brand value therefore low
       threat for substitute products.
Competitors - Specialty Retail

     •   Costco
     •   GAP
     •   Otto Versand
     •   Circuit City stores
     •   Best Buy
Relative Valuations
Recommendations

• 1. Sell 150 bps in VIA

• 2. Buy 150bps in LTD at $27.25
  for 22.31% upside.
• Hold Coach Inc.
Thank You

				
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