Hunter Colby ’19 pitched McCormick (MKC) to the Student Managed Investment Fund (SMIF) on April 1st, 2019. Founded in 1889, McCormick strives to bring quality flavor and spice to kitchens around the world while helping its inhabitants at the same time. Sourcing from over 80 countries and distributing to approximately 150, McCormick has a large global footprint. The company focuses on its employees, sustainability, and responsibility, in order to drive purpose-led performance. With a solid foundation of ESG and the continued pursuit of growing market share, the company is poised well for future growth in the U.S. and globally. The recent push for organic and more high-quality ingredients in spices and seasonings will improve margins while also reducing the overall environmental impact McCormick has on the world. McCormick’s revenue is derived from two areas; consumer business segment and their flavor solutions segment, which partners with well-known restaurants to create their unique flavors. Fresh off the large acquisition of French’s and Frank’s, McCormick has shown it can gain market share successfully and will continue to do so in the future. The class voted to buy 90 shares of MKC.
David Ruf ’19 pitched International Flavors & Fragrances (IFF) to the Student Managed Investment Fund (SMIF) on April 1, 2019. Founded in 1958, IFF provides flavor and fragrance products in the form of naturals and synthetic additives and delivery systems & enzymes. Their $7.1 billion dollar acquisition of Frutarom in Oct 2018 created the largest naturals flavor and fragrance company encompassing 75% of the global market and added exposure to natural colors, natural food protection, cosmetics, and pharmaceuticals industries. The company focuses on developing products based on consumer market trends and local consumer taste and smell preferences to develop new products on trends like health consciousness and bold and exotic flavor testing. The company has continued its aggressive M&A tactics acquiring the Additive Advantage and Leagel in 2019 alone. IFF continues to grow and take over a large portion of the Flavor and Fragrance market share as the global market is undergoing consolidation. IFF & Frutarom have global combined revenue of $5.3 billion serving over 136,00 customers with over 90,000 products in 163 countries. The class voted to buy 80 shares of IFF.
Alex Libman ’19 pitched PayPal Holdings, Inc. (PYPL) to the Student Managed Investment Fund (SMIF) on February 26, 2019. PayPal Holdings, Inc. is an American company operating a worldwide online payments system that supports online money transfers and serves as an electronic alternative to traditional paper methods like checks and money orders. The company operates as a payment processor for online vendors, auction sites, and many other commercial users, for which it charges a fee in exchange for benefits such as one-click transactions and password memory. The company is poised to significant growth with the implementation of Venmo Smart Buttons, increasing active users and continuous M&A activity. The class voted to buy 120 shares of PYPL at $95.18.
Matthew Wattles ’19 pitched Prologis Inc. (PLD) to the Student Managed Investment Fund on February 19, 2019. Prologis is the world’s leader in logistics real estate. Providing efficient logistics real estate solutions, Prologis, in partnership with top manufacturing and distribution companies, ensure timely delivery of the products that make modern life possible. Prologis was founded in 1983 and now operates in 19 countries across the globe. With 3,690 buildings owned and operated totaling 768 million square feet,Prologis has $87 billion in assets under management. The $87 billion in AUM comprises of assets Prologis owns or has investments in, on a wholly owned basis or through co-investment ventures, properties, and development projects. The April 29, 2018 DCT acquisition announcement came at a time when consolidation in the industry was essential to meeting higher capital deployment trends and transportation cost cutting.
Lynette Santhakumar ’19 pitched Ulta Beauty Inc. (ULTA) to the Student Management Investment Fund (SMIF) on March 25, 2019. Ulta Beauty is the largest U.S. beauty retailer and the premier destination for cosmetics, fragrance, skin care products, hair care products, and salon services. Founded in 1990, it offers an “All Things Beauty, All in One Place” experience to customers with over 20,000 products from approximately 500 well-established and emerging beauty brands, which covers any price point. The company operates 1,174 retail stores across 50 states, which are generally 10,000 square feet each, and also distributes products through its website. Their ability to penetrate the market through their focus on personalized omnichannel retailing and their wide variety of product and brands drives customers back into the stores, especially with incentives from their loyalty program of Ultamate Rewards. Additionally, their full range of services that are strategically maintained by the management team will also bring back more customers to the brick-and-mortar stores as the company continues expanding. The class voted to buy 35 shares of Ulta Beauty Inc. at $336.83.
John Morcos ’19 pitched Toyota Motor Corp (TM) to the Student Managed Investment Fund (SMIF) on March 25, 2019. TM went public in 1937, with the idea to design and produce fuel-efficient cars. With over nine million vehicles produced and sold in over 27 countries, TM has an enormous global influence. The company focuses on creating value for its customers, while remaining costly and environmentally conscious. TM’s products currently consist of Toyota and Lexus vehicles. Numerous opportunities for growth in China, India and other emerging markets will allow TM to continue to grow their revenue. TM is always looking for ways to innovate and produce better vehicles for the customer and the environment. TM’s strategic investments in Uber and Grab will allow them to capture other automotive business such as autonomous vehicles and ride-sharing services. The majority of revenue is generated from automotive with over $200B in revenue each year. TM has successfully grown their revenue, operating & net income, earnings per share and dividends for the past five years. The class voted to buy 103 shares of TM.
Doug Lachenauer ’19 pitched Kroger (KR) to the Student Managed Investment Fund (SMIF) on March 19, 2019. KR operates food and drug stores, fuel centers, jewelry stores, and manufacturing centers. With over $121 billion in sales, KR’s stores are a big part of its communities across the Unites States. The company focuses on offering competitive prices and quality Kroger manufactured brands for consumers at all their banner stores. KR’s banners consist of Kroger, Harris Teeter, Dillions, Ralphs, and Fred Meyer, to name a few. Mergers and acquisitions are a large part of Kroger’s business; that coupled with increasing store efficiency and continuing to offer competitive prices will allow KR to expand its market share. The majority of revenue is generated from food and drug stores, and this is KR’s only reportable segment. The class voted to buy 390 shares of KR on the basis of the stock’s performance in bear markets, current state of the staples sector of the portfolio, and current position in the industry.
Nick Huang ’19 pitched Merit Medical (MMSI) to the Student Managed Investment Fund (SMIF) on March 18, 2019. Based in South Jordan, Utah, Merit manufactures and markets proprietary disposable medical devices. The company focuses in interventional, diagnostic and therapeutic procedures, specifically in cardiology, radiology, oncology, critical care, and endoscopy. Merit prides itself on understanding customers’ needs and delivering through a diverse range of products. The company sells their products across the globe and has seen strong growth in Asia, specifically in China. Founded in 1987, Merit currently operates out of 30 sites across every continent and brought in nearly $900 million in sales in 2018. Nick has a target price of $70.13 on the stock, or about 16% upside. The class voted to buy 255 shares of Merit’s stock.