Materials SectorTicker: XLBFrank McLaughlinWalter Nabarrete

Overview Includes companies that are involved

with the discovery and processing of raw materials

Ranges from chemical producers to forestry product manufacturers to companies that mine and refine metals

Largest holdings: Mansanto – 11.34%, DuPont – 9.11% and Dow Chemical – 8.41%

MAT – Last Semester

08/20/2012 – 1/24/2013

XLB vs S&P 500

Current State of Sector Professional Viewpoint: Slightly Bullish

Good performer in 2012 & off to quick start in 2013

Relying heavy on chemical sector Currently outperforming S&P

Macroeconomic Threats Crude oil prices could rise Gold & mining companies not performing well Sector depends heavily on strong economy

Biggest Movers

Positive: Monsanto

+15.02% Dow Chemical

+13.90% Negative:

Newmont Mining Corp. -17.95%

Freeport-McMoran Copper & Gold -16.74%

(Past 3 Months)

Recent Headlines China Rallying Economic Strength

Great news for manufacturing & raw materials Monsanto Ends Patent Dispute with

Brazilian Farmers Dow Chemical Resigns from National

Association of Manufacturers (NAM) Opposes natural gas exports

Key Drivers Increase in World Population

More Food World Population 9.3 Billion by 2050

Health of Economy Increased Consumption

Available Land New Crop Growing Technology

Key Drivers Cost of Energy

Natural Gas Government Regulation

Safety of Product Supply and Demand

Relevant Valuation Matrices P/E Ratio P/S Ratio

Materials Sector is Sensitive to the Business Cycle

Keep Debt and Profit Margins in Mind P/B Ratio

A lot of Capital

The Mosaic Company (MOS)

Date Presented: Oct. 16th

Recommendation: No Vote: N/A Price Then: $54.49 Price Now: $59.46 MOS announced it has plans to open a

$700 million Ammonia plant. Expanding its Potash operation.

The Mosaic Company

Freeport-McMoRan Copper & Gold Inc. (FCX)

Date Presented: Nov. 1st Recommendation: No Vote: N/A Price Then: $40.50 Price Now: $35.02 Merger with Plains Exploration &

Production Company and McMoRan Exploration Co. on December 5, 2012.

Freeport-McMoRan Copper & Gold

Sigma-Aldrich Corporation Date Presented: Nov.27th Recommendation: No Vote: N/A Price Then: $72.20 Price Now: $76.91 Agreed to 50/50 joint venture with

Soulbrain Co. Ltd. On December 21, 2012.

(Ticker: SIAL)

Sigma-Aldrich Corporation

Sources http://finviz.com/map.ashx?t=sec&st=w13 Finance.yahoo.com Reuters.com http://seekingalpha.com/article/1123161-macroeconomics-technicals-and-season

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us-again?source=yahoo http://www.bizjournals.com/stlouis/blog/2013/01/monsanto-offers-compromise-to.

html

http://www.forbes.com/sites/jonentine/2013/01/24/odd-couple-will-dow-chemical-and-ed-markeys-opposition-to-natural-gas-exports-cripple-americas-energy-advantage/

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