Toby Cozzolino ’19 pitched Invesco (IVZ) to the Student Managed Investment Fund (SMIF) on October 23, 2018. Founded in 1935, Invesco manages nearly $1 trillion in investment assets for retail and institutional clients. The firm’s primary investment categories include equities, fixed income, alternatives, money market, and balanced funds. The company has a robust lineup of actively managed investment funds with a growing presence in passive products. Management looks forward to driving growth through a variety of revenue streams, including multi-asset & alternatives, traditional & smart beta ETFs, and digital investment services. The company has experienced above-average organic growth while also promoting expansion through a series of strategic acquisitions. Following Invesco’s expected acquisition of OppenheimerFunds in the second quarter of 2019, the combined firm will manage a total of $1.2 trillion in client assets. The class voted to buy 700 shares of IVZ.
Susan Valenti, a Managing Director at Wells Fargo and member of the Bucknell class of 1984, returned to her alma matter to join the Student Managed Investment Fund on October 22nd and 23rd. Ms. Valenti, who graduated with a degree in mathematics, has enjoyed a long and successful career in the finance world where she has focused primarily on the securitization of residential and commercial mortgages. She began her career as an analyst for Salomon Brothers. Her experience includes positions at Bear Sterns, GE Capital, and Deutsche Bank. Ms. Valenti has been a part of Wells Fargo since 2010 and is currently responsible for client relationships and transaction execution for the securitization of private label residential mortgage loans and structured lending facilities.
During her time with SMIF, Ms. Valenti described her career path and explained many of the technical aspects of her responsibilities. She also offered students her perspective on current economic conditions and her assessment of the housing market and its impact on current economic probabilities. Ms. Valenti observed the presentation of the SMIF Economic Committee and discussed student’s academic and professional goals.
Jeff Gottesman ’19 pitched Morgan Stanley (MS) to the Student Managed Investment Fund (SMIF) on October 15, 2018. Morgan Stanley is one of the largest banks in the world with some $865 billion in total assets and a market cap of around $80 billion. MS provides people, companies, and institutional investors the financial products and services they need to achieve their financial goals. Morgan Stanley’s three main business segments are institutional securities, wealth management, and investment management. The majority of the company’s revenue is generated by their investment banking, trading, and asset management services. The company’s strategy under the leadership of James Gorman has been to emphasize more stable businesses like wealth and asset management and de-emphasize riskier and less predictable businesses like stock and bond trading. Additionally, MS has been focusing on the reduction of their expenses and has increased margins in all three business segments. MS plans to return value to shareholders through stock repurchases and increased dividend payouts. The class voted to commit 1.90% of the equity portion of our portfolio to Morgan Stanley.
Bucknell alumnus David Granson addressed the Student Managed Investment Fund (SMIF) on Tuesday, October 1 as the first guest speaker of the 2018-19 year. Granson, who graduated Bucknell in 1993 with a B.A. in political science and history, is a Managing Director at Goldman Sachs and a professor of fixed income at Georgetown University. Mr. Granson joined Goldman Sachs in 1997 and was named a Managing Director in 2012; as part of the firm’s Investment Management division, he advises endowments, pension plan sponsors, and other tax exempt entities, as well as high-net-worth families and private companies.
Mr. Granson shared his perspective of current economic conditions and offered predictions for the coming year, as well as the reasoning underlying his forecasts. He also discussed his path to Bucknell and from Bucknell to Wall Street, advising students to work to develop their careers on a daily basis.
Mr. Granson joined SMIF students for lunch, where he shared stories of his time at Bucknell and advised students on planning for their futures in the workforce.
On Tuesday, April 10th, Peter Snow pitched Las Vegas Sands (NYSE: LVS) to add to the Consumer Discretionary Sector holdings. Las Vegas Sands Corp. is a global operator of integrated resorts that specializes in developing premium accommodations that feature gaming, high-end shopping, unique entertainment, fine dining and a variety of other amenities. The Company operates integrated resorts in both Asia and the United States. Peter believes Las Vegas Sands is well positioned to capitalize on the first period of strong synchronized global economic growth in a decade. In Macao, the company will benefit from increased visitation and spending from the premium mass segment, as well as new transportation options for visitors to the peninsula. In Singapore, higher VIP spending coupled with exceptional operating margins will lead to further increases in free cash flow; while in Las Vegas, a healthy U.S. consumer in tandem with growth in convention related bookings will increase revenues. The legalization of casino gaming in Japan will serve as an additional catalyst for LVS’ stock. Peter recommended purchasing 150 shares of LVS, while selling 160 shares of CMCSA, 50 shares of NKE, and 20 shares of XLY. The motion passed unanimously.
On February 27th, Alden Stone,pitched Constellation Brands, Inc. (NYSE:STZ). Constellation is the largest producer of wine in the world and has exclusive rights to sell Modelo’s Mexican beer portfolio in the U.S. Alden’s investment thesis was based on an industry leading premium product mix, increasing company margins, diversification within the alcohol beverage industry, the company’s first mover advantage, and the company’s history of returning value to shareholders. In the U.S. market, consumers are buying less volumes of alcohol, but spending more dollars, illustrating how consumer preferences are changing to higher-end wines, beers, and spirits. The company is able to capitalize on this trend as it focuses on producing and marketing premium wines, spirits, and high-end beers, with a majority of revenues coming from the U.S. Alden proposed a purchase of 45 shares of Constellation. This transaction was financed through the sale of 180 shares of the Consumer Staples Select Sector SPDR (XLP). The proposal passed unanimously.
On Tuesday, March 6, Austin Mendez successfully pitched CME Group (NYSE: CME) to be added into the SMIF portfolio. CME Group, the largest derivatives exchange by trade volume, operates within an industry with very high barriers to entry. Austin is confident that CME has positioned itself to see strong growth in the coming years. Through its strategic partnerships with exchanges across the globe, CME is poised for consistent trade volume growth as the economies and derivatives markets in developing countries continue to expand. The exchange has seen various successes in releasing new products, targeting these developing markets, and has plans to continue this initiative in 2018. In addition to the exchange increasing its global presence, Austin’s investment thesis encompassed expanding new and existing product lines, the reemergence of market volatility, and a strong commitment to shareholders. Securities exchanges was a subsector of financials that the portfolio did not hold. Investing in CME Group would expand the breadth of the portfolio’s financial sector holdings and add a security with less correlation to XLF and the large banks already in the portfolio. The class unanimously approved Austin’s motion to purchase 40 shares of CME Group, to be funded through the sale of 230 shares of XLF.
On Monday, April 30th, Kyle Kinner pitched Keurig-Dr Pepper (NYSE: DPS) to add to the Consumer Staples Sector holdings. Keurig-Dr Pepper is a leading integrated brand owner, manufacturer, and distributor of non-alcoholic beverages. Bob Gamgort, new CEO, is coming into the company with over 30 years of experience in the consumer packaged goods industry with two previous leadership experiences managing big corporations. Kyle believes that KDP has a strong business with highly respected margin profile positioned to grow both top line as well as the bottom line perspective. After Keurig Green Mountain’s acquisition in March of 2018, the company now owns its Direct Store Delivery system combined with independent distributor partners, which will allow them to reach 100% of the population. DPS shows differentiation in the beverage industry with the inclusion of coffee after this acquisition, which will lead to increased penetration in households with their wealth of successful products. Additionally, there is an extreme likelihood for e-commerce integration coming in the near future. Kyle proposed to purchase 70 shares of DPS and sell 50 shares of KHC and 100 shares of XLP. The motion passed unanimously.