Consumer Discretionary Sector

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Consumer Discretionary Sector. October 27 th , 2009 Tiffany Arnett, Pinjalim Bora, Sam Brickell. Recommendation. Deriving at the recommendation Top-down approach. Sector Size and Composition Business Analysis Key Economic Drivers Financial Analysis Valuation Analysis - PowerPoint PPT Presentation

Text of Consumer Discretionary Sector

  • Consumer Discretionary SectorOctober 27th , 2009

    Tiffany Arnett, Pinjalim Bora,Sam Brickell

  • Recommendation

  • Deriving at the recommendation Top-down approachSector Size and CompositionBusiness AnalysisKey Economic DriversFinancial AnalysisValuation AnalysisRecommendation Recap

  • Sector Size and CompositionOverviewThe sector is composed of companies that vie for discretionary household income spent on non-necessities. Industries include:Retailing, Media, Consumer Services, Consumer Durables & Apparel, and Automobiles & Components

  • Sector Size and CompositionAs a percentage of S&P 500

    Chart1

    17997240

    1454629Financials

    1212927Healthcare

    1207249Energy

    1121465Consumer Staples

    995821Industrials

    887516Consumer Discretionary

    357115Utilities

    343746Materials

    285582Telecom

    Series 1

    Series 2

    18.62%

    15.05%

    12.55%

    12.49%

    11.6%

    10.3%

    9.18%

    3.69%

    3.56%

    2.95%

    Sheet1

    Series 1Series 2Series 3

    Information Technology18.62%17997242

    Financials15.05%14546292

    Healthcare12.55%12129273

    Energy12.49%12072495

    Consumer Staples11.60%1121465

    Industrials10.30%995821

    Consumer Discretionary9.18%887516

    Utilities3.69%357115

    Materials3.56%343746

    Telecom2.95%285582

  • Sector CompositionTop 10 Industries ( Market Value Weighted)

    Chart5

    0.0284

    0.0332

    0.0353

    0.0412

    0.0425

    0.0484

    0.0939

    0.1022

    0.1342

    0.1495

    S and P

    Percentage of TotalAdj Mkt CapQTD PerformanceYTD Performance

    S&P 5007705385-4.37%-2.67%

    Energy18.55%1429018-3.53%19.70%

    Materials14.21%1095288-2.59%-3.53%

    Industrials13.30%1024652-7.11%-11.53%

    Consumer Discretionary12.46%959884-0.35%-3.77%

    Consumer Staples12.07%929797-7.01%-10.02%

    Health Care9.71%748265-5.40%-12.67%

    Financials8.93%688210-4.61%2.57%

    Information Technology4.12%317790-3.50%-7.43%

    Telecommunication Services3.47%267242-6.13%-12.45%

    Utilities3.18%245238-5.54%6.06%

    100.00%

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    S and P

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    Telecommunication Services3%

    Companies

    % of SectorYTD Returns2008 Return5 Yr CAGR

    Consumer Discretionary3.90%-34.70%-6.00%

    Photographic Products0.10%-59.00%-69.90%-36.70%

    Consumer Electronics0.18%9.30%-77.30%

    Home Furnishings0.33%-7.10%-9.60%-6.10%

    Tires & Rubber0.40%92.10%-78.80%-4.60%

    Motorcycle Manufacturers0.52%-8.20%-63.70%-23.60%

    Broadcasting0.64%-19.50%-46.90%-15.20%

    Distributors0.76%-12.70%-18.20%-2.60%

    Specialized Consumer Services0.82%-25.70%22.30%

    Casinos & Gaming0.96%6.10%-73.10%-15.70%

    Homebuilding1.09%16.70%-13.50%

    Home Furnishing Retail1.10%-4.10%-12.90%-11.70%

    Housewares & Specialties1.12%-12.10%-50.60%-13.50%

    Leisure Products1.23%-8.50%-9.90%-4.20%

    Household Appliances1.30%-13.80%-37.50%-8.90%

    Education Services1.47%-12.00%9.20%

    Advertising1.72%17.10%-45.00%-6.50%

    Auto Parts & Equipment1.76%13.90%-49.60%-8.80%

    Automotive Retail1.77%22.80%2.30%

    Publishing & Printing1.95%4.90%-69.90%-36.70%

    Apparel, Accessories & Luxury Goods2.27%11.70%-34.70%-4.90%

    Computer & Electronics Retail2.31%9.80%-51.30%-6.90%

    Specialty Stores2.57%8.00%-37.40%-4.80%

    Automotive Manufacturers2.72%94.10%-76.40%-25.10%

    Footwear2.84%0.10%-20.60%8.20%

    Hotels, Resorts & Cruise Lines3.32%10.60%-50.10%-7.40%

    Apparel Retail3.53%27.00%-42.30%-5.20%

    Internet Retail4.12%57.30%-51.40%4.90%

    Department Stores4.25%23.50%-48.30%-6.60%

    General Merchandise Stores4.84%9.50%-26.10%-2.80%

    Cable & Satellite9.39%-10.30%

    Home Improvement Retail10.22%-3.10%-40.30%-20.80%

    Restaurants13.42%-0.50%-7.60%9.90%

    Movies & Entertainment14.95%3.00%-42.70%-7.50%

    99.97%

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    Companies

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    Industry Assigned

    S&P Consumer Discretionary Stocks

    StockMarket Cap (mil)Market Cap (mil)YTD ReturnSymbol

    McDonald's$62,940$62,940$62,940-8.26%MCD

    Walt Disney$41,610$41,610$41,610-1.23%DIS

    Home Depot$38,360$38,360$38,360-2.17%HD

    Comcast$38,230$38,230$38,230-21.45%CMCSA

    Amazon.com$33,350$33,350$33,35051.38%AMZN

    Time Warner Inc$28,660$28,660$28,660TWX

    Target$28,440$28,440$28,4409.47%TGT

    Lowe's Cos$27,830$27,830$27,830-12.41%LOW

    Nike$24,850$24,850$24,8500.59%NKE

    DirecTV$23,660$23,660$23,6602.44%DTV

    New Corp$21,360$21,360-10.12%NWSA

    Carnival Corp$20,710$20,7101.48%CCL

    Ford Motor Co$18,150$18,1503.44%F

    Yum! Brands$16,150$16,15011.05%YUM

    Staples$13,870$13,8708.20%SPLS

    TJX Inc$13,180$13,18054.98%TJX

    Kohl's Corp$13,050$13,0500.99%KSS

    Viacom$12,320$12,3206.56%VIA/B

    Johnson Controls Inc$11,760$11,7608.98%JCI

    Gap$10,420$10,42011.73%GPS

    Time Warner Cable$10,260$10,260TWC

    Apollo Group$10,000$10,000-15.10%APOL

    Starbucks$9,900$9,90042.18%SBUX

    Omnicon Group$9,510$9,51013.60%OMC

    McGraw-Hill$9,460$9,46029.71%MHP

    Autozone$8,270$8,27010.36%AZO

    Bed Bath & Beyond$7,780$7,78017.27%BBBY

    Coach$7,480$7,48013.43%COH

    Marriott$6,890$6,8900.62%Mar

    Sears Holdings Corp$6,880$6,88047.54%SHLD

    JC Penny$6,190$6,19033.35%JCP

    Sherwin-Williams$6,110$6,110-12.60%SHW

    VF Corp$6,040$6,0400.16%VFC

    H & R Block$5,470$5,470-27.99%HRB

    Mattell$5,450$5,450-5.06%MAT

    O'Reilly Automotive$5,340$5,34028.11%ORLY

    Genuine Parts$5,210$5,210-13.71%GPC

    Polo Ralph Lauren$5,040$5,04011.30%RL

    Fortune Brands$4,840$4,840-21.88%FO

    Macy's$4,460$4,4602.51%M

    Scripps Networks Interactive$4,440$4,44022.91%SNI

    Darden Restaurants$4,440$4,4400.65%DRI

    Family Dollar$4,220$4,22015.77%FDO

    Nordstrom$4,220$4,22046.66%JWN

    Expedia$4,200$4,20076.82%EXPE

    CBS Corp$4,060$4,060-27.11%CBS

    Wynn Resorts$3,810$3,810-26.69%WYNN

    Harley Davidson$3,790$3,790-4.66%HOG

    Starwood Hotel & Resort$3,690$3,69010.34%HOT

    Limited Brands$3,400$3,4005.38%LTD

    GameStop$3,360$3,360-5.63%GME

    Washington Post$3,270$3,270-10.88%WPO

    DeVry$3,250$3,250-20.80%DV

    Hasbro$3,240$3,240-20.50%HAS

    Whirlpool$3,220$3,2205.49%WHR

    Tiffany$3,050$3,0504.19%TIF

    AutoNation$2,930$2,93067.31%AN

    Newell Rubbermaid Inc$2,850$2,8505.01%NWL

    DR Horton$2,690$2,69020.23%DHI

    Stanley Works$2,660$2,660-1.26%SWK

    Interpublic Group$2,300$2,30021.21%IPG

    Leggett & Platt$2,240$2,240-6.06%LEG

    Pulte Homes$2,100$2,100-25.53%PHM

    Abercrombie & Fitch$2,030$2,0300.07%ANF

    Wyndham Worldwide$1,890$1,89062.44%WYN

    Big Lots$1,630$1,63036.37%BIG

    Black & Decker$1,630$1,630-34.97%BDK

    Radio Shack$1,620$1,6208.29%RSH

    Snap On Ince$1,570$1,570-30.98%SNA

    Lennar Corp$1,330$1,330-4.04%LEN

    Harman Intl$1,210$1,21022.95%HAR

    KB Homes$1,090$1,090-9.32%KBH

    Meredith Corp$1,090$1,09041.53%MDP

    Office Depot$1,070$1,07030.20%ODP

    Centex$971$971-26.69%CTX

    Eastman Kodak$762$762-56.84%EK

    Gannett Co$741$741-60.13%GCI

    New York Times$687$687-34.92%NYT

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    Industry Assigned

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    $62,940m

    $41,610m

    $38,360m

    $38,230m

    $33,350m

    $28,660m

    $28,440m

    $27,830m

    $24,850m

    $23,660m

    Sheet3

    % of SectorYTD Returns2008 Return5 Yr CAGR

    Consumer Discretionary3.90%-34.70%-6.00%

    1Leisure Products1.23%-8.50%-9.90%-4.20%

    1Auto Parts & Equipment1.76%13.90%-49.60%-8.80%

    1Computer & Electronics Retail2.31%9.80%-51.30%-6.90%

    1Photographic Products0.10%-59.00%-69.90%-36.70%

    1Motorcycle Manufacturers0.52%-8.20%-63.70%-23.60%

    1Hotels, Resorts & Cruise Lines3.32%10.60%-50.10%-7.40%

    1Casinos & Gaming0.96%6.10%-73.10%-15.70%

    1Movies & Entertainment14.95%3.00%-42.70%-7.50%

    1General Merchandise Stores4.84%9.50%-26.10%-2.80%

    2Tires & Rubber0.40%92.10%-78.80%-4.60%

    2Housewares & Specialties1.12%-12.10%-50.60%-13.50%

    2Advertising1.72%17.10%-45.00%-6.50%

    2Restaurants13.42%-0.50%-7.60%9.90%

    2Specialized Consumer Services0.82%-25.70%22.30%

    2Apparel, Accessories & Luxury Goods2.27%11.70%-34.70%-4.90%

    2Department Stores4.25%23.50%-48.30%-6.60%

    2Footwear2.84%0.10%-20.60%8.20%

    3Automotive Manufacturers2.72%94.10%-76.40%-25.10%

    3Home Furnishing Retail1.10%-4.10%-12.90%-11.70%

    3Home Furnishings0.33%-7.10%-9.60%-6.10%

    3Distributors0.76%-12.70%-18.20%-2.60%

    3Education Services1.47%-12.00%9.20%

    3Internet Retail4.12%57.30%-51.40%4.90%

    3Publishing & Printing1.95%4.90%-69.90%-36.70%

    3Home Improvement Retail10.22%-3.10%-40.30%-20.80%

    4Automotive Retail1.77%22.80%2.30%

    4Cable & Satellite9.39%-10.30%

    4Consumer Electronics0.18%9.30%-77.30%

    4Apparel Retail3.53%27.00%-42.30%-5.20%

    4Specialty Stores2.57%8.00%-37.40%-4.80%

    4Household Appliances1.30%-13.80%-37.50%-8.90%

    4Broadc