SIDE STREET TEAM. SIDE STREET TEAM Agenda Strategy Portfolio Performance

SIDESIDE STREET TEAMSTREET TEAM

SIDE STREET TEAMSIDE STREET TEAMAgendaAgenda

StrategyStrategy

PortfolioPortfolio

PerformancePerformance

SIDESIDE STREET TEAMSTREET TEAM

STRATEGYSTRATEGY

SIDE STREET TEAMSIDE STREET TEAMStrategyStrategy

Identify Companies with:Identify Companies with: Significant growth potential over the next 12 to Significant growth potential over the next 12 to

18 months18 months

Opportunities to outperform peersOpportunities to outperform peers

Management teams with strong track recordsManagement teams with strong track records

Theme or catalyst that should drive Theme or catalyst that should drive

out-performanceout-performance


Bottom-Up Approach Divide sectors among analystsDivide sectors among analysts

Narrow stock possibilities via appropriate Narrow stock possibilities via appropriate screensscreens

Gather ideas on upcoming market growth trendsGather ideas on upcoming market growth trends

Conduct individual research on respective Conduct individual research on respective sectorssectors

Research industry competitors and leadersResearch industry competitors and leaders

Present companies and team decides if the Present companies and team decides if the portfolio profile is metportfolio profile is met

Allocate capital among the selected companiesAllocate capital among the selected companies


How we analyzed the stock: Reviewed SEC documentsReviewed SEC documents

Examined Bull & Bear reports from analystsExamined Bull & Bear reports from analysts

Evaluated sales, margins, and earnings driversEvaluated sales, margins, and earnings drivers

Researched source of growth over 12 to 18 Researched source of growth over 12 to 18 month periodmonth period

Compared potential stocks to industry peers Compared potential stocks to industry peers

Ensured companies were taking action to Ensured companies were taking action to capitalize on existing growth potentialcapitalize on existing growth potential

Analyzed market expectations to determine if Analyzed market expectations to determine if current valuations have failed to incorporate the current valuations have failed to incorporate the value of growth over the next 12 to 18 monthsvalue of growth over the next 12 to 18 months


1.1. Increasing market Increasing market shareshare

2.2. Technological Technological innovationinnovation

3.3. Developing new Developing new marketsmarkets

4.4. Consistent performersConsistent performers

PPP, HAL, COL, MS, PPP, HAL, COL, MS, AMTD, STKL, PFE, AMTD, STKL, PFE, TXN, BSC, GDI, STR, TXN, BSC, GDI, STR, HIG, CHKHIG, CHK

DNA, PFE, HIG, BSC, DNA, PFE, HIG, BSC, GSK, UEIC, ENER, GSK, UEIC, ENER, ATR, BBBBATR, BBBB

DECK, KSWS, WFMI, DECK, KSWS, WFMI, ENER, AMTD, STR, ENER, AMTD, STR, PEIX, WAGPEIX, WAG

TAC, WB, WAG, CHD, TAC, WB, WAG, CHD, SIAL, ARJ, HIGSIAL, ARJ, HIG

THEME COMPANY

SIDE STREET TEAMSIDE STREET TEAM

PORTFOLIOPORTFOLIO

SIDE STREET TEAMSIDE STREET TEAMPortfolio: Stock Selection by SectorPortfolio: Stock Selection by Sector

IndustryIndustry Producer of specialty footwearProducer of specialty footwear

65% UGG - 30% Teva - 5% Simple65% UGG - 30% Teva - 5% Simple

ThemeTheme Aggressive product placement will increase Ugg and Teva Aggressive product placement will increase Ugg and Teva revenuerevenue

ValuationValuation 15X Forward PE and 2.6X Price to Book falls at shoe 15X Forward PE and 2.6X Price to Book falls at shoe industry’s mean valuationindustry’s mean valuation

FinancialsFinancials Historically consistent gross marginsHistorically consistent gross marginsNo debtNo debtUse strong cash flows to finance all venturesUse strong cash flows to finance all ventures

Deckers Outdoor Corp.Deckers Outdoor Corp.

Approach: Focus on companies with small but rapidly expanding market share

KSWS DECK ATR UEIC

Consumer Discretionary


Basic Materials

Approach: Focus on specialty chemical producers expanding into their high growth areas

ARJ SIAL

IndustryIndustry Global biocide producerGlobal biocide producer

40% Water - 26% Personal Care - 34% Wood Protection40% Water - 26% Personal Care - 34% Wood Protection

ThemeTheme Strong HTH Water demand will push overall revenue Strong HTH Water demand will push overall revenue growth above expectationsgrowth above expectations

ValuationValuation 20.8X Forward P/E and 2.2X Price to Book are 20.8X Forward P/E and 2.2X Price to Book are comparable to industry’s 18.2X and 2.7X comparable to industry’s 18.2X and 2.7X

FinancialsFinancials .62 Debt to Equity is low for its peer group.62 Debt to Equity is low for its peer groupStrong revenue growth since 2001 is comparable to Strong revenue growth since 2001 is comparable to peerspeers

Arch Chemicals Inc.Arch Chemicals Inc.


IndustryIndustry Provides energy: coal-fired, gas-fired, hydrogen, and Provides energy: coal-fired, gas-fired, hydrogen, and renewable facilities. Ensures reliable, low-cost source of renewable facilities. Ensures reliable, low-cost source of powerpower

ThemeTheme Positioned to increase market share and continue long Positioned to increase market share and continue long term growthterm growth

ValuationValuation 16.9X Forward P/E and 2.2X Price to Book are 16.9X Forward P/E and 2.2X Price to Book are comparable to better than industry’s 19.1X and 3.6Xcomparable to better than industry’s 19.1X and 3.6X

FinancialsFinancials Growth rate shot way up over past two yearsGrowth rate shot way up over past two yearsCash flow rises and debt decreasesCash flow rises and debt decreases

Utilities

Approach: Diversify portfolio with low beta stocks in a small sector

Transalta Inc.

TAC STR


IndustryIndustry Oil and natural gas exploration and productionOil and natural gas exploration and production

ThemeTheme Acquisitions fuel growth and hedges protect against Acquisitions fuel growth and hedges protect against downward volatility in commodity pricesdownward volatility in commodity prices

ValuationValuation 8.65X P/E and 1.53X Price to Book are low compared to 8.65X P/E and 1.53X Price to Book are low compared to industry’s 13.97X and 3.28Xindustry’s 13.97X and 3.28X

FinancialsFinancials Currently paying off accumulated debtCurrently paying off accumulated debt

Energy

Approach: Searched for companies actively pursuing growth opportunities

Chesapeake Energy CorporationChesapeake Energy Corporation

HAL PPP PEIX CHK


IndustryIndustry E-learning softwareE-learning software

ThemeTheme Expanding into new international markets will drive Expanding into new international markets will drive revenue growthrevenue growth

ValuationValuation 23.07X P/E and 5.99X Price to Book are in line with 23.07X P/E and 5.99X Price to Book are in line with industry at 29.20X and 5.56Xindustry at 29.20X and 5.56X

FinancialsFinancials Strong annual net income growthStrong annual net income growth Subscription renewal rates in excess of 90%Subscription renewal rates in excess of 90%

Technology

Approach: Searched for companies with market changing capabilities

Blackboard, Inc.

TXN BBBB ENER


Consumer Staples

Approach: Sought stocks with consistent earnings, high growth potential,and substantial product differentiation

WAG WFMI CHD

Whole Foods, Inc.

IndustryIndustry Whole Foods, Inc. is the largest domestic retailer of natural Whole Foods, Inc. is the largest domestic retailer of natural and organic foods. and organic foods.

ThemeTheme Increased demand from mainstream consumers predicts Increased demand from mainstream consumers predicts increased growth rates, the company holds consistent increased growth rates, the company holds consistent same-store sales growth, and Whole Foods holds a solid same-store sales growth, and Whole Foods holds a solid brand image that sets the firm apart as an industry leaderbrand image that sets the firm apart as an industry leader

FinancialsFinancials Annual sales increase to 21.4% in 2006 and average Annual sales increase to 21.4% in 2006 and average 23.5% over the next 5 years 23.5% over the next 5 years Operating margin of 4.97%Operating margin of 4.97% Historical revenue growth for the past 3 years has been Historical revenue growth for the past 3 years has been 20.4%, compared to the industry’s 3.65%20.4%, compared to the industry’s 3.65%


Telecommunications

Approach: Looked for stocks that had growth potential and were not

extremely volatile

No stocks were chosen:No stocks were chosen:- Overall sector was predicted to not perform well over- Overall sector was predicted to not perform well over short- termshort- term- No individual stocks held differentiation in their - No individual stocks held differentiation in their respective industries and valuations were unattractiverespective industries and valuations were unattractive- Certain industries, such as cable and cell phone - Certain industries, such as cable and cell phone services, were too aggressive services, were too aggressive


IndustryIndustry Investment BankInvestment Bank

ThemeTheme A “come-back” firm under newer management. Can MS A “come-back” firm under newer management. Can MS keep their promises? keep their promises?

FinancialsFinancials Increased Efficiency with major cuts to operating Increased Efficiency with major cuts to operating expensesexpenses Attractive Valuation seen in P/B and P/E that are below Attractive Valuation seen in P/B and P/E that are below those of its industry peersthose of its industry peers

HighlightsHighlights Improving Weak Divisions; Emphasizing Strong OnesImproving Weak Divisions; Emphasizing Strong Ones Strength in foreign developing markets leads to Strength in foreign developing markets leads to increased market shareincreased market share On Track (Exceeded Expectations Q2)On Track (Exceeded Expectations Q2)

Morgan StanleyMorgan Stanley

Approach: Stable yet attractive growth prospects

AMTD MS WB BSC HIG

Financials


IndustryIndustry Vertically integrated, ethical businessVertically integrated, ethical business

SunOpta Food = 90%; Opta Minerals = 9%; SunOpta SunOpta Food = 90%; Opta Minerals = 9%; SunOpta BioProcess = 1%BioProcess = 1%

ThemeTheme Trend towards affordable healthy and responsible Trend towards affordable healthy and responsible lifestyles, in addition to the importance of energy lifestyles, in addition to the importance of energy alternatives, will ensure continued strong growth.alternatives, will ensure continued strong growth.

ValuationValuation 21.9X Forward P/E and 3.1X Price to Book are 21.9X Forward P/E and 3.1X Price to Book are comparable to industry’s 18.7X and 3.22X comparable to industry’s 18.7X and 3.22X

FinancialsFinancials 34 consecutive quarters of record revenues (yoy)34 consecutive quarters of record revenues (yoy)Revenues for 1Revenues for 1stst Qtr 2006 have increased 54.6% and Qtr 2006 have increased 54.6% and expected to increase 47.6% for 2expected to increase 47.6% for 2ndnd Qtr. Qtr.

Industrials

Approach: Identify well-established companies with a strong market-share and potential for continued growth

Sunopta Inc.

COL GDI STKL


IndustryIndustry Leading biotech company with proven ability to produce Leading biotech company with proven ability to produce revolutionary medicine designed for various unmet medical revolutionary medicine designed for various unmet medical needsneeds

ThemeTheme Continuously developing innovative therapies for a variety Continuously developing innovative therapies for a variety of significant medical conditions ensures continued of significant medical conditions ensures continued earnings potential.earnings potential.

FinancialsFinancials ROE of 18.0 and ROA of 11.9 vs. Industry’s 0.9 and 0.8.ROE of 18.0 and ROA of 11.9 vs. Industry’s 0.9 and 0.8.Record annual revenues for 2005 & continued billion Record annual revenues for 2005 & continued billion dollar revenues for 1dollar revenues for 1stst 2 Qtrs of 2006 2 Qtrs of 200632.89% Operating Margin vs. Industry’s -319.36%32.89% Operating Margin vs. Industry’s -319.36%

Health Care

Approach: Identify companies with strong growth and earnings potential due to evolving product lines.

Genentech Inc.

DNA GSK PFE

SIDE STREET TEAMSIDE STREET TEAMPortfolio: ConstructionPortfolio: Construction

Stock pickersStock pickers

Sector weighting neutralSector weighting neutral

Position size dictated by Position size dictated by convictionconviction

SIDE STREET TEAMSIDE STREET TEAMPortfolio: Weekly Allocations

Goal:•Invest 30% to 50% of portfolio

Execution:•Invested in 10 Ideas

•Held off on 2 ideas formore research

•Considered underweighting utilities and telecom if there was a continuing difficulty finding new ideas

WEEK 1Arch Chemicals, Inc.

Sigma-Aldrich Corporation

Aptar Group, Inc.

Whole Food Market, Inc.

Halliburton Company

TD Ameritrade HoldingCorp.

Morgan Stanley

Wachovia Corporation

SPY

Sunopta Inc.

Texas InstrumentsIncorporated


Goal: •Invest 75% of portfolio into individual companies

Execution:•Capital was allocated based on confidence in stocks

•Added 6 new stocks•Added health care sector

•Diversified portfolio

WEEK 2

Arch Chemicals, Inc.


Aptar Group, Inc.

K-Swiss Inc.

Walgreen Company


Halliburton Company

TD Ameritrade Holding Corp.

Hartford Financial Services

Morgan Stanley


Aetna Inc.

SPY

Rockwell Collins, Inc.

Sunopta Inc.

Blackboard, Inc.

Texas Instruments Incorporated


Arch Chemicals, Inc.


Aptar Group, Inc.

Deckers Outdoor Corporation

K-Swiss Inc.

Walgreen Company


Halliburton Company

Pacific Ethanol Inc.

Pogo Producing Company

TD Ameritrade Holding Corp.

The Bear Stearns Companies Inc.

Hartford Financial Services

Morgan Stanley


Aetna Inc.

Pfizer Inc.

Rockwell Collins, Inc.

Sunopta Inc.

Blackboard, Inc.

Texas Instruments Incorporated

Questar Corporation

Goal:•Completely invest in portfolio

•Diversify energy, consumer discretionary, financials

Execution:•Added 6 new stocks

•Added Utility sector

WEEK 3


Arch Chemicals, Inc.Sigma-Aldrich CorporationAptar Group, Inc.Deckers Outdoor CorporationK-Swiss Inc.Church & Dwight Co., Inc.Walgreen CompanyWhole Food Market, Inc.Halliburton CompanyPacific Ethanol Inc.Pogo Producing CompanyTD Ameritrade Holding Corp.The Bear Stearns Companies Inc.Hartford Financial ServicesMorgan StanleyWachovia CorporationGenentech Inc.GlaxoSmithKlein plcPfizer Inc.Rockwell Collins, Inc.Gardner Denver, Inc.Sunopta Inc.Blackboard, Inc.Energy Conversion Devices, Inc.Texas Instruments IncorporatedQuestar CorporationTransalta Corporation

Goal:

•Diversify utilities and technology

Execution:•Added 5 new stocks

•Sold Aetna, did not fit into the Side Street strategy

WEEK 4


Goal:•Lower exposure to individual firms

•Diversify consumer discretionary

Execution:•Decreased all holdings to under 6%

WEEK 5

Arch Chemicals, Inc.Sigma-Aldrich CorporationAptar Group, Inc.Deckers Outdoor CorporationK-Swiss Inc.Church & Dwight Co., Inc.Walgreen CompanyWhole Food Market, Inc.Halliburton CompanyPacific Ethanol Inc.Pogo Producing CompanyTD Ameritrade Holding Corp.The Bear Stearns Companies Inc.Hartford Financial ServicesMorgan StanleyWachovia CorporationGenentech Inc.GlaxoSmithKlein plcPfizer Inc.Rockwell Collins, Inc.Gardner Denver, Inc.Sunopta Inc.Blackboard, Inc.Energy Conversion Devices, Inc.Texas Instruments IncorporatedQuestar CorporationTransalta Corporation

Goal:•Limit exposure and reduce risk in energy sector

Execution:•Reduced energy sector’s weight in portfolio

•Added another energy stock with lower beta

WEEK 6

Arch Chemicals, Inc.Sigma-Aldrich CorporationAptar Group, Inc.Deckers Outdoor CorporationK-Swiss Inc.Universal Electronics Inc.Church & Dwight Co., Inc.Walgreen CompanyWhole Food Market, Inc.Halliburton CompanyPacific Ethanol Inc.Pogo Producing CompanyChesapeake Energy CorporationTD Ameritrade Holding Corp.The Bear Stearns Companies Inc.Hartford Financial ServicesMorgan StanleyWachovia CorporationGenentech Inc.GlaxoSmithKlein plcPfizer Inc.Rockwell Collins, Inc.Gardner Denver, Inc.Sunopta Inc.Blackboard, Inc.Energy Conversion Devices, Inc.Texas Instruments IncorporatedQuestar CorporationTransalta Corporation


SIDE STREET TEAMSIDE STREET TEAMPortfolio: At a Glance

* Outliers have been removed

S&P 500's Weighted Average

Side Street's Weighted Average*

Market Cap 91.1 28.39

Beta 1.00 1.01

Forward P/E 15.59 15.21

Price to Book 3.68 3.75

Debt/Equity 0.71 0.53

Q1 '05 to Q1 '06 sales

Growth 17.24% 27.80%


PERFORMANCEPERFORMANCE

SIDE STREET TEAMSIDE STREET TEAMPerformancePerformance

Total Portfolio Return Compared to S&P 500

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

Time (days)

To

tal

Retu

rn (

%)

Side Street

S&P 500

SIDE STREET TEAM

Performance

Stock Performance ResultsQ2 EPS

ResultsMean Analyst

ExpectationPercent Above

Expectation

SIAL Sales growth = 1% Operating Margins

increase 2.2% 1.04 0.99 5%

ATR Sales growth = 12% 0.77 0.74 4%

KSWS Net Income growth = 21% 1.28 0.46 178%

DECK Revenue growth = 3.4% 0.21 0.05 320%

COL Profits growth 20% 0.70 0.69 1%

GDI Earnings growth = 124% 0.62 0.54 15%

WB Earnings growth = 14% 1.17 1.15 2%

HIG Earnings Fell 21% 1.52 1.74 -13%

HAL Net Income growth = 51% 0.55 0.49 12%

TXN Revenue Growth = 24% 0.47 0.45 4%

MS Net Sales growth = 61.35% 1.86 1.45 28%

STR Net Income growth = 49% 1.03 0.96 7%

PFEIncome growth = -30% (Up 10% w/o

$1 bil Tax Credit) 0.47 0.48 -2%

PPP Net Income Growth = 250% 1.01 1.01 0%

GSK Profit growth = 15% 0.86 0.88 -2%

DNA Earnings increase = 79% 0.49 0.46 7%

TACRevenue growth = -4% Income

growth 0.35 0.26 35%

CHK Profit growth = 85% 0.82 0.74 11%

Exceeded Expectations

Did Not Exceed Expectations

SIDE STREET TEAMSIDE STREET TEAMSummarySummary

Researched sectors and companiesResearched sectors and companies

Strategy to pick stocks that will Strategy to pick stocks that will exceed expectations in next 12-18 exceed expectations in next 12-18 monthsmonths

Gradual investment processGradual investment process

Weekly competition for capitalWeekly competition for capital

Invest in the Side Street Fund Invest in the Side Street Fund todaytoday

Learn more about Side Street Learn more about Side Street and research the Fund in the and research the Fund in the ProspectusProspectus

SIDE STREET SIDE STREET Next StepsNext Steps


Advisor:Advisor: Tim Ryan- CFA Value TeamTim Ryan- CFA Value Team

Team:Team: Brenna O’Regan- IMD Product Brenna O’Regan- IMD Product MarketingMarketing

Josh Davis- Corporate TechnologyJosh Davis- Corporate Technology

Chris Breen- RetirementChris Breen- Retirement

Anthony Gallardo- 529 College SavingsAnthony Gallardo- 529 College Savings

Nina Reyes- ComplianceNina Reyes- Compliance

Justin Sapolsky- Fixed IncomeJustin Sapolsky- Fixed Income

Documents

SIDE STREET TEAM. SIDE STREET TEAM Agenda Strategy Portfolio Performance