summary highlights

Penn State Investment Association

PresidentPresidentRyan LimorVice PresidentVice PresidentJake EttoreSecretarySecretaryLee MooneyTreasurerTreasurerJohn Brozick

Y T D R etur n (%)

-15. 00%

-10. 00%

-5. 00%

0. 00%

5. 00%

10. 00%

15. 00%

NLF

S&P

Summary Highlights The Nittany Lion Fund LLC. returned a loss of -1.50% for the week

ending July 11, 2008, while the S&P 500 returned a loss of -1.81%. Year to date, the Fund has returned a loss of -9.29% versus the S&P 500 which has returned a loss of -14.92%. Since inception the Fund has returned 5.80% on an annualized basis while the S&P 500 has returned 2.31%. Performance this week was driven by the Healthcare, Consumer Staples, and Utilities sectors

There was 1 presentation last week. The Information Technology sector presented a buy for Research In Motion Ltd. (RIMM) for the bench, and it was approved

There are 4 presentations this week. The Consumer Discretionary sector is presenting a sell for Carnival Corp. (CCL), while the Financials sector is presenting a hold for MetLife Inc. (MET). The Telecommunications sector is presenting holds for Cisco Systems, Inc. (CSCO) and AT&T (T)

Weekly Update: July 14, 2008

Board of Directors

Economic Outlook:► Looking forward on Tuesday, the producer price index could jump about

1.5% for June, with the "core" rate up about 0.3%, while the Commerce Department tallies June retail data, with stimulus checks providing a lift. Fed releases minutes from its June 25 meeting, when it left rates unchanged but noted that uncertainty about the inflation outlook "remains high." CPI will also be out with regards to the economy’s inflation worries. On Thursday, there will be earnings reports from Microsoft, Google, Nokia and IBM, as well as J.P. Morgan, Merrill Lynch, United Technologies, Coca-Cola and Continental Airlines



Director of PAGTom [email protected]

Associate Director of PAGStratton [email protected]

Summer Director of PAGBrad [email protected]


Board of Directors


Performance* Weekly YTD Inception1 NLF Portfolio

Nittany Lion Fund (1.50%) (9.29%) 5.81% Base Portfolio Value $4,754,493

S&P 500 Index (1.81%) (14.92%) 2.32% Current Portfolio Value $4,757,330

NLF vs. S&P 500 2 0.31% 5.63% 3.49% Cash Balance $337,3581 Annualized & Net of fees; 2 Uses arithmetic calculation

Weekly Trades Price Shares Key Statistics S&P 500

Bank of New York Mellon Corp BUY $36.31 2,570 Portfolio Beta -

Coca-Cola Co BUY $51.46 2,435 Sharpe Ratio (1 yr.) -0.33

Wells Fargo & Co SELL $23.77 4,200 Volatility (26 week) 20.36%

Proctor & Gamble Co SELL $63.43 1,745 Weighted Ave. Market Value $92.11 billion

P/ E (TTM) 17.76

YTD Turnover Ratio 0.60%

Sector Weightings

Sector Analysis Weekly 4 Weeks YTD vs. S&P 500 4 NLF Target Current S&P 500

Consumer Discretionary (4.68%) (15.17%) (10.02%) 10.53% 0.87 1.40 7.10% 6.99% 7.91%

Consumer Staples 0.79% (3.46%) (8.62%) (1.70%) 0.93 0.74 11.48% 11.77% 11.31%

Energy (4.30%) (3.49%) 18.90% 18.22% 1.06 0.21 18.20% 16.75% 15.57%

Financials (4.14%) (11.54%) (22.23%) 21.08% 0.93 0.96 16.91% 16.77% 13.69%

Healthcare 2.97% (0.99%) (7.53%) 5.25% 1.34 0.43 10.11% 10.98% 12.49%

Industrials (0.66%) (8.51%) (10.78%) 6.36% 1.05 0.32 10.60% 10.54% 11.28%

Information Technology (0.62%) (7.24%) (17.46%) (2.22%) 0.93 0.67 15.90% 16.63% 16.52%

Materials (0.63%) (10.24%) 6.49% 11.93% 0.65 0.79 3.15% 3.00% 3.82%

Telecommunications (1.01%) (11.20%) (15.15%) 8.36% 0.69 0.82 3.14% 3.25% 3.31%

Utilities (0.20%) (2.01%) (2.46%) 2.58% 0.91 1.20 3.40% 3.32% 4.09%3As a ratio of NLF/S&P market cap weighted averages; 4 Excludes dividends

NLF Holdings Purchase Current NLF Target Weight P/E Ratio Market Cap (B) % Off High5Weekly Overall

Nike Inc 41.46$ 56.26$ 78.83$ 2.84% 14.39 27.72 19.71% (3.86%) 35.69%

The Walt Disney Co. 32.07$ 29.20$ 43.11$ 1.88% 12.65 55.63 16.55% (5.50%) (8.95%)

V F Corp. 78.99$ 70.64$ 86.45$ 1.01% 11.80 7.71 10.66% (5.17%) (10.57%)

Carnival Corp 40.96$ 30.29$ 48.03$ 1.25% 11.02 23.85 26.07% (5.02%) (26.05%)

Fomento Economico Mexicano ADR 42.73$ 43.58$ 56.00$ 2.42% 18.33 15.59 4.24% 1.61% 1.99%

CVS Corp. 28.48$ 38.64$ 47.00$ 3.32% 15.76 55.23 12.42% 0.39% 35.68%

Coca-Cola Co 51.46$ 50.27$ 67.21$ 2.77% 16.41 116.77 2.33% (2.35%) (2.31%)

Philip Morris International Inc 47.66$ 53.37$ 58.00$ 3.26% 15.64 112.57 1.17% 3.69% 11.99%

Apache Corp. 136.51$ 124.59$ 167.94$ 2.16% 8.28 41.56 15.13% (6.46%) (8.73%)

Helix Energy Solutions 36.92$ 38.39$ 42.89$ 1.23% 10.82 3.52 7.80% 1.80% 3.98%

Noble Corp. 43.50$ 58.91$ 73.96$ 3.19% 9.84 15.83 13.34% (4.44%) 35.43%

Chesapeake Corp. 34.11$ 63.52$ 69.80$ 4.20% 15.83 34.33 8.47% (4.88%) 86.20%

Schlumberger Ltd. 78.32$ 99.16$ 121.16$ 2.56% 20.68 118.31 11.54% (2.67%) 26.60%

Southwestern Energy 23.12$ 42.64$ 49.74$ 3.42% 28.93 14.58 12.43% (5.33%) 84.43%

The Goldman Sachs Group 134.58$ 162.48$ 230.00$ 3.49% 9.60 63.99 34.46% (9.17%) 20.73%

Metlife Inc. 62.40$ 51.06$ 68.00$ 2.11% 8.27 36.27 18.17% (3.20%) (18.17%)

Federated Investors Inc. 35.15$ 31.57$ 48.50$ 1.86% 13.09 3.22 28.88% (4.33%) (10.17%)

Aflac Inc. 65.07$ 60.72$ 75.00$ 2.75% 15.11 28.86 10.99% (2.71%) (6.68%)

Blackrock Inc. 183.96$ 174.71$ 218.37$ 1.58% 20.12 20.58 22.94% 3.03% (5.03%)

Bank of New York Mellon Corp 36.31$ 35.66$ 44.24$ 2.07% 12.05 40.79 4.22% (3.75%) (1.79%)

Visa Inc. 85.70$ 74.55$ 94.50$ 2.90% 36.62 80.81 14.86% (4.51%) (13.01%)

Gilead Sciences, Inc. 40.34$ 53.70$ 59.64$ 3.89% 25.79 49.54 5.19% 5.11% 33.12%

Becton Dickinson Co. 85.81$ 81.17$ 105.48$ 2.36% 18.57 19.81 9.21% (1.43%) (5.40%)

Mylan Labs Inc. 21.88$ 11.99$ 17.55$ 1.76% 23.00 3.65 47.04% 1.18% (45.20%)

Stryker Corp 65.19$ 65.64$ 76.38$ 2.97% 22.78 27.03 14.17% 5.02% 0.70%

General Dynamics 53.64$ 81.05$ 100.34$ 3.94% 13.72 32.30 14.32% (2.61%) 51.10%

Precision Castparts Corp 115.99$ 94.26$ 129.10$ 1.02% 11.45 13.13 18.73% (0.04%) (18.73%)

Ametek Inc. 38.51$ 47.16$ 54.77$ 1.69% 19.07 5.03 11.10% 2.41% 22.48%

Harsco Corp 58.67$ 52.49$ 69.76$ 1.66% 14.80 4.42 17.75% 3.25% (10.53%)

ABB Ltd. 28.65$ 26.62$ 34.35$ 2.23% 15.96 60.94 19.21% (2.74%) (7.09%)

Microsoft Corp. 26.50$ 25.25$ 37.00$ 2.29% 14.59 235.16 31.87% (2.81%) (4.71%)

Automatic Data Processing Inc. 43.59$ 41.47$ 53.00$ 3.85% 19.25 21.50 8.27% (1.45%) (4.86%)

Google Inc. 456.46$ 533.80$ 641.00$ 3.38% 26.54 167.66 28.04% (0.60%) 16.94%

Cerner Corp. 44.53$ 44.46$ 64.00$ 3.20% 20.56 3.58 32.07% 0.54% (0.16%)

Amphenol Corp. 35.29$ 45.21$ 54.00$ 3.92% 19.44 7.93 8.81% 0.56% 28.11%

Freeport Copper & Gold Inc. 64.88$ 107.74$ 148.93$ 1.31% 9.29 41.29 14.40% (0.83%) 66.07%

FMC Corporation 36.00$ 69.45$ 89.14$ 1.26% 16.94 5.20 12.82% (0.04%) 92.89%

Praxair Inc. 87.76$ 91.46$ 101.73$ 0.43% 21.56 28.64 8.08% (2.90%) 4.22%

L3 Communications 73.54$ 90.89$ 124.11$ 0.80% 13.58 11.15 20.75% 1.76% 23.59%

America Movil SA de CV 28.11$ 50.20$ 71.74$ 0.77% 14.09 86.62 27.14% (2.75%) 78.58%

Cisco Systems, Inc. 26.00$ 21.82$ 28.96$ 0.64% 14.15 128.89 17.25% (5.62%) (16.08%)

AT&T Inc. 38.44$ 32.58$ 45.53$ 1.03% 10.77 193.56 19.58% 0.00% (15.24%)

Transcanada Corp. 38.01$ 36.73$ 44.16$ 0.96% 16.63 21.22 9.17% (1.55%) (3.37%)

Constellation Energy 95.33$ 79.53$ 107.68$ 0.84% 14.40 14.19 25.76% (3.04%) (16.57%)

CPFL Energia SA 66.11$ 68.74$ 84.27$ 0.59% 25.65 11.00 1.60% 6.08% 3.98%

Exelon Corp. 85.66$ 90.55$ 96.52$ 0.94% 20.88 59.40 1.19% 0.10% 5.70%5 % difference between most recent price and highest weekly closing price since purchase*NLF performance is calculated to reflect the changes in net portfolio value for a specified period of time. Returns include dividends.**vs. S&P 500 is the performance relative to S&P 500 Index. Individual performance against S&P 500 Index is measured using returns against the unadjusted index.

Nittany Lion Fund

17.41

37.33%

Individual Performance

Market Cap vs.

S&P Sector 3P/E vs. S&P

Sector 3

0.918

0.37

18.29%

$48.84 billion

NLF

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Jul Oct Jan Apr Jul

NLF S&P 500

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Director of TAGJustin [email protected]


Technical Analysis Group


Market Overview Commentary:► The market is currently below the1300 level. TAG is expecting the

market to swing up slightly this week. The downward trend should continue after this week. Last week we had a break in the previous lows. After the short term rise for this week, we should continue to see the market fall to new lows. While the market is currently up a percent, it may gap fill on Monday and close down. However, from there it should rise for the most part of this week. Once we see a break in the new lows in the next few weeks, we should see a substantial downward move, as we do not have too much support to push the market up

S&P 500 30 Min Chart

S&P 500 Daily Chart



Nike (NKE) ►Sub-sector: Footwear►Status: Purchased on 4/6/05 at $41.46►Current Price: $56.26►Target Price: $78.83►Trailing P/E: 15.06►Forward P/E: 12.56►LT EPS Growth Rate: 13.90% ►Market Cap: $27.65 Billion►% of Total Portfolio: 2.84%

Commentary►Nike is trading down more than 25.00% from its 52-week high of $70.60 after reporting slow domestic growth in its fourth quarter

Walt Disney (DIS) ►Sub-sector: Entertainment►Status: Purchased on 11/28/07 at $32.07►Current Price: $29.20►Target Price: $43.11►Trailing P/E: 13.17►Forward P/E: 11.82►LT EPS Growth Rate: 13.78%►Market Cap: $55.63 Billion►% of Total Portfolio: 1.88%

Commentary►A Lehman Brothers analyst downgraded Disney to “underweight” from “equal-weight,” and cut his price target to $29.00 from $40.00, claiming the company is threatened by the growth of digital content distribution and potential weakness at its theme parks►Lehman also downgraded several of Disney’s competitors, such as Time Warner and News Corp, on overall concern with the media and entertainment sector


Equity Research: Focus on Consumer Discretionary

Director of Director of Equity Equity ResearchResearchJack Z. [email protected]

Consumer Consumer DiscretionaryDiscretionaryLead AnalystLead AnalystAdam [email protected]

Associate Associate AnalystAnalystBrad [email protected]

Company 4 Week Company Performance 4 Week Sector Performance Purchase Price Current Price (7/11/08) Target Price Since PurchaseNike -18.45% -15.17% $41.46 $56.26 $78.83 35.70%Disney -13.94% -15.17% $32.07 $29.20 $43.11 -8.95%VF Corp -2.94% -15.17% $78.99 $70.64 $86.45 -10.57%Carnival -18.11% -15.17% $40.96 $30.29 $48.03 -26.05%



VF Corp (VFC) ►Sub-sector: Apparel►Status: Purchased on 4/2/08 at $78.99►Current Price: $70.64►Target Price: $86.45►Trailing P/E: 13.21►Forward P/E: 10.67►LT EPS Growth Rate: 10.00% ►Market Cap: $7.71 Billion►% of Total Portfolio: 1.01%

Commentary►VF Corp will report second quarter earnings on July 15. Analysts are expecting an EPS of $0.88 a share, while they reported earnings of $0.93 a share for the second quarter of 2007►VF Corp raised its second quarter earnings outlook recently, saying earnings would rise by 10.00% to 12.00% over its previously-issued view of $0.80 per share "due to stronger earnings from operations and a net favorable benefit from the resolution of various tax matters”

Carnival (CCL) ►Sub-sector: Cruise-lines►Status: Purchased on 5/7/08 at $40.96►Current Price: $30.29►Target Price: $48.03►Trailing P/E: 10.41►Forward P/E: 10.91►LT EPS Growth Rate: 14.13%►Market Cap: $23.81 Billion►% of Total Portfolio: 1.25%

Commentary►Carnival is trading close to its 52-week low of $29.67 due to market concerns over the effect of high oil prices on the cruise liner's bottom line and weak discretionary spending




Consumer Consumer DiscretionaryDiscretionaryLead AnalystLead AnalystAdam [email protected]

Associate Associate AnalystAnalystBrad [email protected]



Bench Stocks: Status:

1. Macy’s, Inc. (M) Approved for bench

2. McDonald’s Corp. (MCD) Approved for bench

3. Omnicom (OMC) Approved for bench

Focus List: Status:

1. Boyd Gaming Corp. (BYD) Initiated coverage

2. American Eagle Outfitters, Inc. (AEO) Initiated coverage

3. TJX Companies, Inc. (TJX) Initiated coverage

4. MGM Mirage (MGM) Initiated coverage

5. GameStop (GME) Initiated coverage

6. Chipotle Mexican Grill (CMG) Initiated coverage

7. Dollar Tree (DLTR) Initiated coverage





CVS/Caremark Corp. (CVS) ►Sub-sector: Pharmacy Services►Status: Purchased on 12/27/05 at $28.48►Current Price: $38.64►Target Price: $47.00►Trailing P/E: 19.54►Forward P/E: 13.37►LT EPS Growth Rate: 15.90%►Market Cap: $55.23 Billion►% of Total Portfolio: 3.32%

Commentary►A Jefferies analyst initiated coverage on CVS with a “buy” rating and a $50.00 price target►CVS increased its quarterly dividend to $0.069 per share, which represents a 15.00% increase►CVS agreed to make Depomed, Inc. drug Glumetza available to its customers as a Tier 2, brand- preferred Metformin for the treatment of diabetes

Fomento Economico Mexicano (FMX) ►Sub-sector: Beverages►Status: Purchased on 6/26/08 at $42.73►Current Price: $43.58►Target Price: $56.00►Trailing P/E: 18.54►Forward P/E: 16.57►LT EPS Growth Rate: 19.20%►Market Cap: $15.59 Billion►% of Total Portfolio: 2.42%

Commentary►Femsa announced that it will release its Q2 results on Monday, July 28 before market opens. Analysts are expecting earnings of $0.62 a share►The Motley Fool gave FMX a 5-Star rating, citing the company’s “diversification and growth prospects” as well as it positioning to take advantage “of the rise of Mexican consumerism.” Historical data shows that Motley Fool 5-star stocks outperform the market by a significant margin


Equity Research: Focus on Consumer Staples


Consumer Consumer StaplesStaplesLead AnalystLead AnalystBill [email protected]

Associate Associate AnalystAnalystY. Dan [email protected]

Company 4 Week Company Performance 4 Week Sector Performance Purchase Price Current Price (7/11/08) Target Price Since PurchaseCVS -9.34% -3.46% $28.48 $38.64 $47.00 35.67%Fomento Economico Mexicano -1.13% -3.46% $42.73 $43.58 $56.00 1.99%Coca-Cola -9.29% -3.46% $51.46 $50.27 $67.21 -2.31%Philip Morris International 4.34% -3.46% $47.66 $53.37 $58.00 11.98%



Coca-Cola (KO)►Sub-sector: Soft Drinks►Status: Purchased on 7/7/08 at $51.46►Current Price: $50.27►Target Price: $67.21►Trailing P/E: 18.91►Forward P/E: 15.01►LT EPS Growth Rate: 8.67%►Market Cap: $116.77 Billion►% of Total Portfolio: 2.77%

Commentary ►Coca-Cola imposed a hiring freeze for the rest of the year in the United States. A company spokesman stated that “this action allows the company to focus all of their attention on their plans to continue to build their business.” The freeze does not include jobs in Mexico, Canada, or its Glaceau Vitamin Water►Coca-Cola along with Cargill released ‘Truvia’, a calorie-free sweetener on July 9. The product is derived from an herb called stevia, which represents approximately 40% of the low and no calorie sweetener market in Japan






Philip Morris Int’l (PM)►Sub-sector: Tobacco►Status: Purchased on 3/28/08 at $47.66►Current Price: $53.37►Target Price: $58.00►Trailing P/E: 1.24►Forward P/E: 14.70►LT EPS Growth Rate: 12.00%►Market Cap: $112.57 Billion►% of Total Portfolio: 3.26%

Commentary►Philip Morris International was up 3.69% over the week ending on July 11. This reflects investor confidence in tobacco and its strength in recessionary markets



Procter & Gamble (PG)►Sub-sector: Household Products►Status: Purchased on 2/22/08 at $67.14►Current Price: $63.45►Target Price: $81.44►Trailing P/E: 18.73►Forward P/E: 16.40►LT EPS Growth Rate: 11.60%►Market Cap: $193.71 Billion►% of Total Portfolio: 0.00%

Commentary ►The NLF closed our position our Proctor & Gamble on Monday, July 7, selling 1,745 shares at $63.43









1. William Wrigley Jr. Co. (WWY) Approved for bench

2. Target Corporation (TGT) Approved for bench

3. Bare Escentuals, Inc. (BARE) Approved for bench

Focus List: Status:

1. Wal-Mart Stores Inc. (WMT) Initiated coverage

2. Colgate-Palmolive (CL) Initiated coverage

3. H.J. Heinz Co. (HNZ) Initiated coverage

4. Sadia S.A. (SDA) Initiated coverage

5. Perdigao S.A. (PDA) Initiated coverage

6. Tupperware Brands CP (TUP) Initiated coverage

7. Unilever PLC (UL) Initiated coverage

8. Companhia de Bebidas Das Americas (ABV) Initiated coverage





Helix Energy Solutions Group (HLX) ►Sub-sector: Equipment and Services►Status: Purchased on 2/4/08 at $36.92►Current Price: $38.39►Target Price: $42.89►Trailing P/E: 10.89►Forward P/E: 8.76►LT EPS Growth Rate: 25.00% ►Market Cap: $3.52 Billion►% of Total Portfolio: 1.23%

Commentary►Standard & Poor's announced that Helix Energy Solutions Group Inc. will replace Activision Inc. in the S&P Midcap 400►Helix Energy Solutions will conduct a conference call regarding its financial and operational results for the second quarter of 2008 on Thursday, July 31, 2008 before the market opens. Analysts are expecting earnings of $0.85 per share, while they reported earnings of $0.70 per share one year ago

Apache Corp. (APA) ►Sub-sector: Exploration and Production►Status: Purchased on 4/15/08 at $136.51►Current Price: $124.59►Target Price: $167.94►Trailing P/E: 12.53►Forward P/E: 7.58►LT EPS Growth Rate: 9.81% ►Market Cap: $41.56 Billion►% of Total Portfolio: 2.16%

Commentary►Apache will announce its second quarter earnings on July 31, 2008 before the market opens. Analysts are expecting them to report earnings of $3.67 per share, while they reported earnings of $1.89 per share a year ago►Natural gas in New York declined to the lowest in six weeks amid speculation that supplies are adequate to meet demand lowered by milder weather conditions. Natural gas for August delivery fell $0.396, or 3.2%, to settle at $11.904 per million BTUs


Equity Research: Focus on Energy


EnergyEnergyLead AnalystLead AnalystCharles [email protected]

Associate Associate AnalystAnalystRishin [email protected]

Company 4 Week Company Performance 4 Week Sector Performance Purchase Price Current Price (7/11/08) Target Price Since PurchaseHelix Energy Solutions 1.64% -3.49% $36.92 $38.39 $42.89 3.98%Apache Corp. -10.02% -3.49% $136.51 $124.59 $167.94 -8.73%Noble Corp. -9.63% -3.49% $43.50 $58.91 $73.96 35.43%Chesapeake Energy 7.32% -3.49% $34.11 $63.52 $69.80 86.22%Schlumberger Ltd. -0.53% -3.49% $78.32 $99.16 $121.16 26.61%Southwestern Energy -8.56% -3.49% $23.12 $42.64 $49.74 84.43%



Noble Corporation (NE) ►Sub-sector: Drilling and Exploration►Status: Purchased 12/21/06 at $43.50►Current Price: $58.91►Target Price: $73.96►Trailing P/E: 11.83►Forward P/E: 8.15►LT EPS Growth Rate: 27.50% ►Market Cap: $15.83 Billion►% of Total Portfolio: 3.19%

Commentary►Noble Corporation announced that its second quarter 2008 earnings press release has been scheduled for Wednesday, July 23 after the market closes. Analysts are expecting earnings of $1.37 per share, while they reported earnings of $2.16 per share last year

Chesapeake Energy Corporation (CHK)►Sub-sector: Exploration and Production►Status: Purchased 02/02/07 at $34.11►Current Price: $63.52►Target Price: $69.80►Trailing P/E: 34.94►Forward P/E: 14.74►LT EPS Growth Rate: 15.60% ►Market Cap: $34.33 Billion►% of Total Portfolio: 4.20%

Commentary►Chesapeake Energy Corporation announced on July 8 it would publicly offer 25 million shares of its common stock with pricing set at $57.25 per share►Chesapeake Energy Corp said on Wednesday it expects a net loss for the second quarter due to its hedging strategy








Schlumberger Limited (SLB) ►Sub-sector: Equipment and Services►Status: Purchased 2/2/07 at $78.32►Current Price: $99.16►Target Price: $121.16►Trailing P/E: 22.92►Forward P/E: 16.84►LT EPS Growth Rate: 22.80% ►Market Cap: $118.31 Billion►% of Total Portfolio: 2.56%

Commentary►Schlumberger Limited will hold a conference call on July 18 before market opens to discuss the results for the second quarter ending on June 30, 2008. Analysts are expecting them to report EPS of $1.15, while they reported EPS of $1.02 a year ago

Southwestern Energy (SWN)►Sub-sector: Exploration and Production ►Status: Purchased 10/11/07 at $23.12►Current Price: $42.64►Target Price: $49.74►Trailing P/E: 53.23►Forward P/E: 24.51►LT EPS Growth Rate: 25.00% ►Market Cap: $14.58 Billion►% of Total Portfolio: 3.42%

Commentary►Southwestern Energy Company announced that it has closed the previously announced sale of its utility, Arkansas Western Gas Company, to SourceGas, LLC. SourceGas paid the company approximately $230.00 million










1. Royal Dutch Shell (RDS/A) Approved for bench

2. Global Industries Limited (GLBL) Approved for bench

3. Peabody Energy Corp. (BTU) Approved for bench

4. National Oilwell Varco, Incorporated (NOV) Approved for bench

5. Occidental Petroleum (OXY) Approved for bench

6. Transocean Inc. (RIG) Approved for bench

7. Exxon Mobile Corporation (XOM) Approved for bench

8. Arch Coal, Inc (ACI) Approved for bench

Focus List: Status:

1. Oceaneering International, Inc. (OII) Initiated coverage

2. Petroleo Brasileiro (PBR) Initiated coverage

3. Suncor Energy Inc. (SU) Initiated coverage

4. Diamond Offshore (DO) Initiated coverage

5. EOG Resources, Inc. (EOG) Initiated coverage

6. Petrohawk Energy Corp. (HK) Initiated coverage

7. XTO Energy Inc. (XTO) Initiated coverage

8. Valero Energy Corp. (VLO) Initiated coverage

9. Conoco Philips (COP) Initiated coverage




Equity Research: Focus on Financials


FinancialsFinancialsLead AnalystLead AnalystSteven [email protected]

Associate Associate AnalystAnalystTaylor Destefano [email protected]

AnalystsAnalystsPatrick CaponeJacob HarleyAnthony GrecoChao MaPaul SeitzAlan Zhou

Goldman Sachs Group Inc. (GS) ►Sub-sector: Investment Brokerage►Status: Purchased on 4/20/05 at $134.58►Current Price: $162.48►Target Price: $230.00►Trailing P/E: 7.75►Forward P/E: 8.18►LT EPS Growth Rate: 15.53% ►Market Cap: $69.53 Billion ►% of Total Portfolio: 3.49%

Commentary►On Wednesday, July 9, Goldman Sachs Inc. announced it had withdrawn from the leading international banking lobby, called the IFF. The firm voiced disagreement with the lobby’s attempt to alter current fair value accounting practices

Federated Investors Inc (FII) ►Sub-sector: Asset Management►Status: Purchased on 2/12/07 at $35.15►Current Price: $31.57►Target Price: $48.50►Trailing P/E: 14.56►Forward P/E: 11.74►LT EPS Growth Rate: 13.50% ►Market Cap: $3.22 Billion►% of Total Portfolio: 1.86%

Commentary►Federated Investors Inc. traded down 4.33% for the week ended July 13. Since purchase the stock is down 10.17%

Company 4 Week Company Performance4 Week Sector Performance Purchase Price Current Price (7/11/08) Target Price Since PurchaseGoldman Sachs Group Inc. -8.87% -11.54% $134.58 $162.48 $230.00 20.73%Federated Investors Inc. -15.97% -11.54% $35.15 $31.57 $48.50 -10.18%BlackRock Inc -16.90% -11.54% $183.96 $174.71 $218.37 -5.03%Aflac Inc -9.92% -11.54% $65.07 $60.72 $75.00 -6.69%MetLife Inc. -14.60% -11.54% $62.40 $51.06 $68.00 -18.17%Visa Inc. -8.56% -11.54% $85.70 $74.55 $94.50 -13.01%Bank of New York Mellon -14.42% -11.54% $36.31 $35.66 $44.24 -1.79%




Wells Fargo & Co. (WFC) ►Sub-sector: Money Center Banks►Status: Purchased on 9/12/07 at $35.79►Current Price: $23.00►Target Price: $42.00►Trailing P/E: 9.89►Forward P/E: 9.58►LT EPS Growth Rate: 10.96%►Market Cap: $75.96►% of Total Portfolio: 0.00%

Commentary►The NLF closed our position in Wells Fargo & Co. on Monday, July 7, selling 4,200 shares for $23.77

BlackRock, Inc. (BLK) ►Sub-sector: Asset Management►Status: Purchased on 2/22/08 at $183.96►Current Price: $174.71►Target Price: $218.37►Trailing P/E: 22.20►Forward P/E: 16.62►LT EPS Growth Rate: 17.50% ►Market Cap: $22.54 Billion►% of Total Portfolio: 1.58%

Commentary►Merrill Lynch & Co. Inc. continues to consider selling its stake in both Bloomberg Lp. and BlackRock Inc., as the firm attempts to raise capital after second quarter losses►On Friday July 11, BlackRock Inc. won approval to launch an asset management business in South Korea, becoming the 17th foreign money manager to enter the country’s $335.00 billion market►BlackRock Inc. announces second quarter earnings on July 17. Analysts are expecting earnings of $2.01 per share, while BlackRock earned $1.69 a year ago









Aflac, Inc. (AFL) ►Sub-sector: Accident and Health Insurance►Status: Purchased on 2/27/08 at $65.07►Current Price: $60.72►Target Price: $75.00►Trailing P/E: 17.62►Forward P/E: 13.26►LT EPS Growth Rate: 13.86% ►Market Cap: $28.86 Billion►% of Total Portfolio: 2.75%

Commentary►Aflac, Inc. traded down 2.71% for the week ended July 11. Since purchase the stock is down 6.68%

MetLife Inc. (MET) ►Sub-sector: Life Insurance►Status: Purchased on 4/8/08 at $62.40►Current Price: $51.06►Target Price: $68.00►Trailing P/E: 10.09►Forward P/E: 7.45►LT EPS Growth Rate: 10.33% ►Market Cap: $36.27 Billion►% of Total Portfolio: 2.11%

Commentary►On Monday, June 30, MetLife Inc. CEO Robert C. Henrikson exercised options for 3,100 shares of stock at $29.95









Visa Inc. (V) ►Sub-sector: Business Services►Status: Purchased on 5/8/08 at $85.70►Current Price: $74.55►Target Price: $94.50►Trailing P/E: N/A►Forward P/E: 29.35►LT EPS Growth Rate: 13.86% ►Market Cap: $58.00 Billion►% of Total Portfolio: 2.90%

Commentary►On Tuesday, July 1, Visa Inc. rescinded its policy that treats debit cards differently than credit cards, including requiring customers to enter a PIN during transactions. The move was prompted by an antitrust case filed by the Justice Department, which was subsequently dropped after Visa Inc. changed the policy

Bank of NY Mellon Corp. (BK)►Sub-sector: Money Center Banks►Status: Purchased on 7/7/08 at $36.31►Current Price: $35.66►Target Price: $44.24►Trailing P/E: 15.08►Forward P/E: 10.49►LT EPS Growth Rate: 10.25%►Market Cap: $40.79 Billion►% of Total Portfolio: 2.07%

Commentary►Bank of NY Mellon Corp. announces second quarter earnings on Thursday, July 17. Analysts are expecting earnings of $0.76 per share, while BK reported $0.63 in the second quarter of 2007►The Moscow Arbitration Court is hearing testimony in the Russian Federal Customs Service Claim of $22.54 billion against Bank of NY Mellon Corp. over the use of Racketeer Influenced and Corrupt Organizations Act (RICO) statutes in a case involving money laundering activities










1. Hartford Financial Services Group Inc. (HIG) Approved for bench

2. PNC Financial Services Group Inc. (PNC) Approved for bench

3. Arch Capital Group Ltd. (ACGL) Approved for bench

4. Shinhan Financial (SHG) Approved for bench

Focus List: Status:

1. Uniao de Bancos Brasileiros (UBB) Initiated coverage

2. Banco Bradesco S.A.(BBD) Initiated coverage

3. Janus Capital Group (JNS) Initiated coverage

4. Fortress Investment Group (FIG) Initiated coverage

5. Allstate Corp. (ALL) Initiated coverage

6. JP Morgan Chase & Co. (JPM) Initiated coverage

7. US Bancorp (USB) Initiated coverage

8. Bank of America Corp. (BAC) Initiated coverage

9. Franklin Resources Inc. (BEN) Initiated coverage

10. Eaton Vance Corp. (EV) Initiated coverage

11. Banco Santander (STD) Initiated coverage





Gilead Sciences (GILD) ►Sub-sector: Biotechnology►Status: Purchased on 6/14/07 at $40.34►Current Price: $53.70►Target Price: $59.64►Trailing P/E: 30.42►Forward P/E: 23.35►LT EPS Growth Rate: 27.90% ►Market Cap: $49.54 Billion►% of Total Portfolio: 3.89%

Commentary►The French National Agency for Research on AIDS and Viral Hepatitis announced the initiation of a combination study of Gilead’s Viread and Pharmasset’s Clevudine. The study will last 96 weeks and allow doctors to see how the two drugs work separately as well as when used together►Analysts continue to forecast growth in the HIV treatment market for Gilead and said the company will have a leading position in the sector. Deutsche Bank analyst Mark Schoenebaum initiated a “buy" rating on the stock in a note to investors

Mylan Laboratories (MYL) ►Sub-sector: Generic Products►Status: Purchased on 2/26/07 at $21.88►Current Price: $11.99►Target Price: $17.55►Trailing P/E: N/A►Forward P/E: 11.64►LT EPS Growth Rate: 8.20% ►Market Cap: $3.65 Billion►% of Total Portfolio: 1.76%

Commentary►Mylan received tentative FDA approval last week for Linezolid tablets, the generic antibiotic version of Pharmacia and Upjohn's Zynvox tablets, which had sales of about $422 million over the past 12 months►Mylan, along with Barr Pharmaceuticals, convinced a judge to invalidate a Parkinson’s disease patent owned by Boehringer Ingelheim GmbH. Boehringer sued the two companies in 2005 for infringement, but the ruling suggested the claims were invalid because Boehringer engaged in “double patenting”. The news sent Mylan’s shares up 5.19%

Equity Research: Focus on Healthcare


HealthcareHealthcareLead AnalystLead AnalystRyan [email protected]

Associate Associate AnalystAnalystChris [email protected]


Company 4 Week Company Performance 4 Week Sector Performance Purchase Price Current Price (7/11/08) Target Price Since PurchaseGilead Sciences Inc. -0.81% -0.99% $40.34 $53.70 $59.64 33.12%Mylan Laboratories Inc. -4.77% -0.99% $21.88 $11.99 $17.55 -45.20%Stryker Corporation 1.75% -0.99% $65.19 $65.64 $76.38 0.69%Becton, Dickinson & Company -1.68% -0.99% $85.81 $81.17 $105.48 -5.41%



Stryker Corp. (SYK)►Sub-sector: Medical Equipment►Status: Purchased on 4/30/07 at $65.19►Current Price: $65.64►Target Price: $76.38►Trailing P/E: 25.76►Forward P/E: 19.08►LT EPS Growth Rate: 18.90% ►Market Cap: $27.03 Billion►% of Total Portfolio: 2.97%

Commentary ►According to the Food and Drug Administration, off-label use of Stryker’s OP-1 Implant and OP-1 Putty have been linked to potentially fatal complications. The FDA has received 38 reports over the past four years about problems when these products were used in neck fusion surgeries, an unapproved use of these products►Stryker will showcase its Patriot Bed during an invite-only event at its Medical Division in Portage. The Patriot bed is part of a new line of hospital beds which will alert the nursing station if a patient falls out of bed. The beds are targeted toward Veterans Administration hospitals

Becton, Dickinson & Company (BDX)►Sub-sector: Medical Instruments & Supplies►Status: Purchased on 3/12/08 at $85.81►Current Price: $81.17►Target Price: $105.48►Trailing P/E: 19.58►Forward P/E: 16.63►LT EPS Growth Rate: 14.00% ►Market Cap: $19.81 Billion►% of Total Portfolio: 2.36%

Commentary ►Standard and Poor’s Rating Services raised Becton Dickinson’s long term corporate credit rating and senior unsecured debt rating from AA- to A+ citing their strength in their medical, diagnostic and bio-science segments►Shares of Becton Dickinson have slid recently over concerns of rising prices of oil-based resin, which accounts for about 9.00% of the company’s cost of goods sold, or $250.00 million. Becton Dickinson said during their April 23 conference call that the benefit of the weak dollar will more than offset the increase in resin prices, as more than half of the firm’s revenues come from outside the United States




HealthcareHealthcareLead AnalystLead AnalystRyan [email protected]

Associate Associate AnalystAnalystChris [email protected]






1. Genentech Inc. (DNA) Approved for bench

2. Abbott Laboratories (ABT) Approved for bench

3. Medtronic (MDT) Approved for bench

4. Novartis A.G. (NVS) Approved for bench

5. Davita (DVA) Approved for bench

6. WellPoint Inc. (WLP) Approved for bench

7. Covance Inc. (CVD) Approved for bench

8. Medco Health Solutions (MHS) Approved for bench

Focus List: Status:

1. Novo Nordisk A/S (ADR) (NVO) Initiated coverage

2. Icon plc (ADR) (ICLR) Initiated coverage

3. Intuitive Surgical (ISRG) Initiated coverage

4. GlaxoSmithKline plc (ADR) (GSK) Initiated coverage

5. Allscripts Healthcare Solutions (MDRX) Initiated coverage

6. Allergan, Inc (AGN) Initiated coverage



General Dynamics (GD) ►Sub-sector: Aerospace & Defense►Status: Purchased on 2/2/05 at $53.64►Current Price: $81.05►Target Price: $100.34►Trailing P/E: 14.92►Forward P/E: 12.39►LT EPS Growth Rate: 10.10% ►Market Cap: $32.30 Billion►% of Total Portfolio: 3.94%

Commentary►General Dynamics received a $23.60 million contract for 41 digital modular radios and other hardware from the Navy►General Dynamics was awarded a $367.00 million contract from Canadian Forces for support and maintenance services fro a fleet of wheeled light armored vehicles

ABB Ltd (ABB) ►Sub-sector: Heavy Electrical Equipment►Status: Purchased on 10/25/2007 at $28.65►Current Price: $26.62►Target Price: $34.35►Trailing P/E: 14.55►Forward P/E: 13.65►LT EPS Growth Rate: 30.50% ►Market Cap: $61.09 Billion►% of Total Portfolio: 2.23%

Commentary►ABB is expected to report earnings on Thursday, July 24, 2008. Analyst are expecting an EPS of $0.42 a share for the second quarter, while they reported $0.32 a share a year ago


Equity Research: Focus on Industrials


IndustrialsIndustrialsLead AnalystLead AnalystDavid [email protected]

Associate Associate AnalystAnalystJim [email protected]

Summer AnalystMahir [email protected]

Company 4 Week Company Performance 4 Week Sector Performance Purchase Price Current Price (7/11/08) Target Price Since PurchaseGeneral Dynamics -5.85% -8.51% $53.64 $81.05 $100.34 51.10%ABB -11.09% -8.51% $28.65 $26.62 $34.35 -7.09%Ametek -8.55% -8.51% $38.51 $47.16 $54.77 22.46%Harsco -10.70% -8.51% $58.67 $52.49 $69.76 -10.53%Precision Castparts -9.08% -8.51% $115.99 $94.26 $129.10 -18.73%









Ametek (AME) ►Sub-sector: Electrical Components and Equipment►Status: Purchased on 8/10/07 at $38.51►Current Price: $47.16►Target Price: $54.77►Trailing P/E: 20.88►Forward P/E: 16.43►LT EPS Growth Rate: 14.00%►Market Cap: $5.03 Billion►% of Total Portfolio: 1.69%

Commentary►Ametek is expected to release earnings on Monday, July 21. Analysts are expecting an EPS of $0.57 a share for the second quarter, while they reported an EPS of $0.54 a year ago

Harsco Corp. (HSC) ►Sub-sector: Industrial Machinery►Status: Purchased on 4/15/08 at $58.67►Current Price: $52.49►Target Price: $69.76►Trailing P/E: 14.41►Forward P/E: 13.06►LT EPS Growth Rate: 13.50%►Market Cap: $4.42 Billion►% of Total Portfolio: 1.66%

Commentary►Harsco is expected to release second quarter earnings on Tuesday, July 22, 2008. Analysts are expecting an EPS of $1.02 a share, while they reported $0.91 a share in the second quarter of 2007►Harsco was upgraded up Keybanc Capital Markets to “buy” from “hold”. They also assigned a $62.00 price target and stated that the stock was “cheap”



Precision Castparts Corp. (PCP)►Sub-sector: Aerospace & Defense►Status: Purchased on 6/03/2008 at $115.99►Current Price: $94.26►Target Price: $129.10►Trailing P/E: 13.39►Forward P/E: 9.97►LT EPS Growth Rate: 14.00%►Market Cap: $13.13 Billion►% of Total Portfolio: 1.02%

Commentary►UBS has cut its price target on Precision Castparts from $145.00 to $120.00, however, they kept their “buy” rating










1. Danaher Corp. (DHR) Approved for bench

2. Manitowoc Co. Inc (MTW) Approved for bench

3. United Technologies Corp. (UTX) Approved for bench

4. Canadian National Railway (CNI) Approved for bench

Focus List: Status:

1. Deere & Co. (DE) Initiated coverage

2. Caterpillar Inc. (CAT) Initiated coverage

3. Textron Inc. (TXT) Initiated coverage

4. Boeing Co. (BA) Initiated coverage

5. Bucyrus International Inc. (BUCY) Initiated coverage

6. Joy Global Inc. (JOYG) Initiated coverage

7. Illinois Tool Works (ITW) Initiated coverage





Microsoft (MSFT)►Sub-sector: Software►Status: Purchased on 2/2/05 at $26.50►Current Price: $25.25►Target Price: $37.00►Trailing P/E: 14.67 ►Forward P/E: 11.69►LT EPS Growth Rate: 12.30% ►Market Cap: $235.16 Billion►% of Total Portfolio: 2.29%

Commentary►Microsoft, Mobile TeleSystems OJSC, and Fujitsu Siemens announced the launch of the first integrated 3G notebook solution in the CIS►On Monday, July 7, Microsoft said it would be willing to reopen talks to buy all or part of Yahoo Inc, but only if a new Yahoo board is elected, backing investor Carl Icahn’s proxy battle

Automatic Data Processing (ADP)►Sub-sector: Business Software & Services►Status: Purchased on 4/21/08 at $43.59►Current Price: $41.47►Target Price: $53.00 ►Trailing P/E: 18.59 ►Forward P/E: 17.21►LT EPS Growth Rate: 12.70% ►Market Cap: $21.50 Billion►% of Total Portfolio: 3.85%

Commentary►Automatic Data Processing, in collaboration with other industry-leading Fortune 500 companies, launched AllianceQ, an organization created to build a free, exclusive, and perpetually growing pool of job candidates to drive down its members’ cost of recruiting►Automatic Data Processing returned -1.45% this week, trading down with the overall market

Equity Research: Focus on Information Technology


Company 4 Week Company Performance 4 Week Sector Performance Purchase Price Current Price (7/11/08) Target Price Since PurchaseMicrosoft -13.14% -7.24% $26.50 $25.25 $37.00 -4.72%Automatic Data Processing -3.87% -7.24% $43.59 $41.47 $53.00 -4.86%Google -6.60% -7.24% $456.46 $533.80 $641.00 16.94%Cerner -7.38% -7.24% $44.53 $44.46 $64.00 -0.16%Amphenol -7.26% -7.24% $35.29 $45.21 $54.00 28.11%

Director of Director of Equity Equity ResearchResearch Jack Z. [email protected]

Information Information TechnologyTechnologyLead AnalystLead AnalystJohn [email protected]

Associate Associate AnalystAnalystBrian [email protected]



Google Inc. (GOOG) ►Sub-sector: Internet Information Provider►Status: Purchased on 2/15/07 at $456.46►Current Price: $533.80►Target Price: $641.00►Trailing P/E: 36.91►Forward P/E: 21.50►LT EPS Growth Rate: 30.40%►Market Cap: $167.66 Billion►% of Total Portfolio: 3.38%

Commentary►Google reports earnings this week on Thursday, July 17 after the close of the market. Analysts are expecting earnings of $4.00 per share, while they reported earnings of $2.93 a year ago►A federal judge denied a request by Viacom Inc. that Google Inc. and its YouTube subsidiary be forced to turn over code relating to their search functions►Google launched a three-dimensional virtual experience Web site, called Lively, to enable effective competition with the popular virtual world of Second Life

Cerner Corp (CERN) ►Sub-sector: Healthcare Information Services►Status: Purchased on 10/20/06 at $44.53►Current Price: $44.46 ►Target Price: $64.00 ►Trailing P/E: 27.23 ►Forward P/E: 17.17►LT EPS Growth Rate: 27.20% ►Market Cap: $3.58 Billion►% of Total Portfolio: 3.20%

Commentary►Cerner will release second quarter 2008 earnings results after the market closes on Tuesday, July 22. Analysts are expecting earnings of $0.47 per share, while they report earnings of $0.41 a year ago►Cerner returned 0.54% this week, as the street patiently waits for their earnings call next week








Amphenol Corp (APH) ►Sub-sector: Diversified Electronics►Status: Purchased on 11/9/06 at $35.29►Current Price: $45.21►Target Price: $54.00►Trailing P/E: 22.05►Forward P/E: 17.39►LT EPS Growth Rate: 16.70% ►Market Cap: $7.93 Billion►% of Total Portfolio: 3.64%

Commentary►Amphenol will release second quarter 2008 earnings results on Thursday, July 17. Analysts are expecting earnings of $0.58 a share, while APH reported earnings of $0.46 in the second quarter of 2007►Collins Stewart initiated coverage of Amphenol on July 2 with a “buy” rating issued►Amphenol returned 0.56% this week with the market and overall Information Technology sector









1. Ansys Inc. (ANSS) Approved for bench

2. International Business Machines Corp. (IBM) Approved for bench

3. Oracle Corp. (ORCL) Approved for bench

4. Cisco Systems, Inc. (CSCO) Approved for bench

Focus List: Status:

1. Nvidia Corporation (NVDA) Initiated coverage

2. Cognizant Technology Solutions (CTSH) Initiated coverage

3. EMC Corporation (EMC) Initiated coverage

4. MEMC Electronics (WFR) Initiated coverage

5. Research in Motion Ltd. (RIMM) Initiated coverage





Equity Research: Focus on Materials


MaterialsMaterialsLead AnalystLead AnalystDiego [email protected]

Associate Associate AnalystAnalystDarrell [email protected]


Freeport-McMoRan (FCX)►Sub-sector: Copper►Status: Purchased on 2/6/06 at $64.88►Current Price: $107.74►Target Price: $148.93►Trailing P/E: 13.16►Forward P/E: 8.39►LT EPS Growth Rate: 44.50%►Market Cap: $41.29 Billion►% of Total Portfolio: 1.31%

Commentary►Freeport-McMoRan will announce earnings on Tuesday, July 22. Analysts are expecting earnings of $2.54 a share, while FCX reports earnings of $2.62 a year earlier►Freeport-McMoRan said it doesn’t expect the ongoing strike at the Peruvian base metals miner to hurt copper production

Company 4 Week Company Performance 4 Week Sector Performance Purchase Price Current Price (7/11/08) Target Price Since PurchaseFreeport-McMoRan -12.26% -10.24% $64.88 $107.74 $148.93 66.06%FMC Corp -9.41% -10.24% $36.00 $69.45 $89.14 92.92%Praxair -6.28% -10.24% $87.76 $91.46 $101.73 4.22%

FMC Corp (FMC)►Sub-sector: Diversified Chemicals►Status: Purchased on 3/5/07 at $36.00►Current Price: $69.45►Target Price: $89.14►Trailing P/E: 29.70►Forward P/E: 14.17►LT EPS Growth Rate: 9.75%►Market Cap: $5.20 Billion►% of Total Portfolio: 1.26%

Commentary►FMC Corp will announce earnings on Tuesday, July 29. Analysts are expecting earnings of $1.20 a share, while they reported earnings of $1.79 a year earlier►FMC Corp’s spent $390,000 in the first quarter on chemical plant security and other issues





MaterialsMaterialsLead AnalystLead AnalystDiego [email protected]

Associate Associate AnalystAnalystDarrell [email protected]


Praxair Inc. (PX) ►Sub-sector: Synthetics►Status: Purchased on 4/8/08 at $87.76►Current Price: $91.46►Target Price: $101.73►Trailing P/E: 24.25►Forward P/E: 18.82►LT EPS Growth Rate: 12.40% ►Market Cap: $28.64 Billion►% of Total Portfolio: 0.43%

Commentary►Praxair Inc will announce earnings on Wednesday, July 23. Analysts are expecting earnings of $1.05 a share, while PX reported earnings of $0.89 a year earlier►Praxair China has signed an contract to supply liquid nitrogen to the Jiangsu Defeng Pharmaceutical & Chemical Co., Ltd.






1. Stillwater Mining (SWC) Approved for bench

2. Rio Tinto (RTP) Approved for bench

3. Cameco (CCJ) Approved for bench

4. Sherwin-Williams Co. (SHW) Approved for bench

5. Potash Corp. of Saskatchewan (POT) Approved for bench

Focus List: Status:

1. Monsanto Co. (MON) Initiated coverage

2. Syngenta AG (SYT) Initiated coverage

3. Nucor (NUE) Initiated coverage

4. Arcelor Mittal (MT) Initiated coverage



L-3 Communications (LLL) ►Sub-sector: Communication Equipment►Status: Purchased on 2/9/05 at $73.54►Current Price: $90.89►Target Price: $124.11►Trailing P/E: 14.58►Forward P/E: 12.17►LT EPS Growth Rate: 16.55% ►Market Cap: $11.15 Billion►% of Total Portfolio: 0.80%

Commentary►Zacks investment research said that LLL is “one of the best-positioned pure defense plays by virtue of its non-platform focus, broad diversification of programs, and exposure to both the investment account and expanding order booking.” They also went on to say that L-3 is well-positioned to become a “significant market leader in providing technology for rail security” ►Aerospace and Defense stocks traded down midweek due to soaring oil prices and recent analyst downgrades to the sector. LLL maintained most of its gains from earlier in the week and traded up 1.76% for the week ending on July 11

America Movil (AMX) ►Sub-sector: Wireless Communications►Status: Purchased on 9/23/05 at $28.11►Current Price: $50.20►Target Price: $71.24►Trailing P/E: 15.67►Forward P/E: 11.90►LT EPS Growth Rate: 30.53% ►Market Cap: $87.32 Billion►% of Total Portfolio: 0.77%

Commentary►AMX reports second quarter earnings on Friday, July 25. Analysts are expecting earnings of $0.82 a share and are saying that the results for the second-quarter should reveal whether the weakness in the first-quarter was isolated of “a sign of changing growth trends”►AMX traded down 2.75% for the week, showing that many investors are waiting to see its Q2 results


Equity Research: Focus on Telecommunications


TelecomTelecomLead AnalystLead AnalystDan [email protected]

Associate Associate AnalystAnalystPaul [email protected]

Company 4 Week Company Performance 4 Week Sector Performance Purchase Price Current Price (7/11/08) Target Price Since PurchaseL-3 Communications -7.19% -11.20% $73.54 $90.89 $124.11 23.59%America Movil -11.29% -11.20% $28.11 $50.20 $71.24 78.58%AT&T -10.07% -11.20% $38.44 $32.58 $45.53 -15.24%Cisco Systems -17.25% -11.20% $26.00 $21.82 $28.96 -16.08%

Splits:21



AT&T (T) ►Sub-sector: Telecommunications Services ►Status: Purchased on 4/8/08 at $38.44►Current Price: $32.58►Target Price: $45.53►Trailing P/E: 15.84►Forward P/E: 9.67►LT EPS Growth Rate: 8.50% ►Market Cap: $193.56 Billion►% of Total Portfolio: 1.03%

Commentary►AT&T released the new iPhone 3G on July 11, 2008 in 22 countries, including the U.S. Bloomberg reported that AT&T Inc. stores have “mostly emptied out of inventory” just two days after its release. AT&T spokesman stated that “obviously, there’s been overwhelming demand” and that AT&T was “thrilled with the results”




TelecomTelecomLead AnalystLead AnalystDan [email protected]

Associate Associate AnalystAnalystPaul [email protected]

Cisco Systems (CSCO) ►Sub-sector: Communications Equipment►Status: Purchased on 6/11/08 at $26.00►Current Price: $21.82►Target Price: $28.96►Trailing P/E: 17.05►Forward P/E: 12.84►LT EPS Growth Rate: 8.50% ►Market Cap: $128.89 Billion►% of Total Portfolio: 0.64%

Commentary►RBC cut its target for CSCO from $29.00 to $27.00, while UBS also cut their price target to $25.50 from $27.00. A UBS analyst stated that enterprise spending for Cisco remains challenging and that there has been further slowing in the U.S.►CEO John Chambers said that many of his customers see the economy picking up early 2009 rather than second half of 2008 as originally thought. Cisco traded down 5.62% for the week




1. China Mobile Limited (CHL) Approved for bench

2. Rogers Communications (RCI) Approved for bench

3. Comtech Telecommunications (CMTL) Approved for bench

4. Corning (GLW) Approved for bench

7. Commscope (CTV) Approved for bench

8. Vimpel Communications (VIP) Approved for bench

Focus List: Status:

1. Brocade Communication Systems (BRCD) Initiated coverage

2. Verizon Communications (VZ) Initiated coverage

3. Sprint Nextel (S) Initiated coverage

4. Netgear (NTGR) Initiated coverage

5. BT group (BT) Initiated coverage

6. Cogeco Cable (CCA.TO) Initiated coverage

7. Embarq (EQ) Initiated coverage

8. Arris Group Inc. (ARRS) Initiated coverage

9. Harris Corp. (HRS) Initiated coverage





Constellation Energy Group Inc. (CEG)►Sub-sector: Electric Utility►Status: Purchased on 11/05/07 at $95.33►Current Price: $79.53►Target Price: $107.68►Trailing P/E: 18.74►Forward P/E: 12.43►LT EPS Growth Rate: 18.00%►Market Cap: $14.19 Billion►% of Total Portfolio: 0.84%

Commentary►Constellation’s subsidiary, Constellation Energy Commodities Group Limited, acquired Nufcor International Limited, a uranium market advisor, on June 30►Constellation returned -3.04% for the week ended July 11

TransCanada Corp. (TRP) ►Sub-sector: Gas Utility►Status: Purchased on 5/7/08 at $38.01►Current Price: $36.73►Target Price: $44.16►Trailing P/E: 14.25►Forward P/E: 15.63►LT EPS Growth Rate: 5.00% ►Market Cap: $19.91 Billion►% of Total Portfolio: 0.96%

Commentary►Alaska’s House Speaker, John Harris, announced on July 13 that he intends to have the vote on TransCanada’s proposed state license for the company’s Alaska-Alberta natural gas pipeline, which entails a $500.00 million subsidy, by Wednesday, July 16►TransCanada’s proposed expansion on the Keystone Pipeline, running from Alberta to Texas, will cost an estimated $7.00 billion, while enabling the pipeline to move an additional 700,000 barrels of oil per day


Equity Research: Focus on Utilities


UtilitiesUtilitiesLead AnalystLead AnalystSteven [email protected]

Associate Associate AnalystAnalystBlaine [email protected]

4 Week Company Performance 4 Week Sector Performance Purchase Price Current Price (7/11/08) Target Price Since PurchaseConstellation Energy Group -7.67% -2.01% $95.33 $79.53 $107.68 -16.57%TransCanada Corp. -3.11% -2.01% $38.01 $36.73 $44.16 -3.37%Exelon Corp. 0.89% -2.01% $85.66 $90.55 $96.52 5.71%CPFL Energia SA 5.75% -2.01% $66.11 $68.74 $84.27 3.98%



Exelon Corp. (EXC) ►Sub-sector: Diversified Electric Utility►Status: Purchased on 12/19/07 at $85.66►Current Price: $90.55►Target Price: $96.52►Trailing P/E: 23.20►Forward P/E: 18.79►LT EPS Growth Rate: 10.20% ►Market Cap: $59.40 Billion►% of Total Portfolio: 0.94%

Commentary ►S&P equities analyst Justin McCann downgraded Exelon from “buy” to “hold” due to their 10.00% appreciation from mid-January to late June

CPFL Energia SA (CPL) Sub-sector: Foreign Electric UtilityStatus: Purchased on 6/17/08 at $66.11Current Price: $68.74Target Price: $84.27Trailing P/E: 12.23Forward P/E: 31.82LT EPS Growth Rate: N/A

Market Cap: $11.00 Billion% of Total Portfolio: 0.59%

Commentary ►CPL invested in four small hydro plants in southern Brazil. The total cost of the investment is $175.00 million and will expand CPL’s total installed capacity by 76MW►Jack Dzierwa, co-manager of the Global MegaTrends fund, recommended CPL at a “buy” rating on July 9, citing CPL’s infrastructure exposure and high dividend yield




UtilitiesUtilitiesLead AnalystLead AnalystSteven [email protected]

Associate Associate AnalystAnalystBlaine [email protected]




1. Questar Corp. (STR) Approved for bench

2. Sempra Energy Corp. (SRE) Approved for bench

3. Allegheny Energy (AYE) Approved for bench

Focus List: Status:

1. PNM Resources Inc. (PNM) Initiated coverage

2. PowerShares Water Resources (PHO) Initiated coverage

3. Edison International (EIX) Initiated coverage

4. Atmos Energy Corp. (ATO) Initiated coverage

5. Southern Co. (SO) Initiated coverage

6. FPL Group Inc. (FPL) Initiated coverage

7. Duke Energy Corp. (DUK) Initiated coverage

8. Consolidated Edison (ED) Initiated coverage

9. Firstenergy Corp. (FE) Initiated coverage





Overall Portfolio Compliance►92.91% of the Fund’s net assets are currently in common stocksThe Fund Managers will pursue the objective of investing between 75%-100% of the Fund’s net assets in common stocks of U.S. issuers.► 46 different securities are currently being held in the portfolioAt any one time, the Fund Managers expect to hold the securities of between 30-50 different issues.►0% of companies in the portfolio have a market capitalization under $800 millionA portfolio security is generally expected to have a minimum market capitalization of $800 million.►0.918 is the portfolio’s current beta The target equity portfolio beta for the Fund will be between 0.75 and 1.25, but no assurances can be given that this will be accomplished.►0% of the portfolio is leveragedThe Fund will not use leveraging or short sales.►7.09% of the Fund is invested in cash, cash equivalents, money-market funds, and ETFsFor short temporary defensive purposes during periods of adverse market conditions the Fund may invest up to 100% of the Fund’s net assets in cash, cash equivalents, money-market funds, and ETFs.►2 sectors are currently marketweight compared to the S&P 500 Index►3 sectors are currently overweight compared to the S&P 500 Index►5 sectors are currently underweight compared to the S&P 500 Index

Equity Presentations►There will be 4 equity presentations this week:

Current Holdings►Fifteen stocks have appreciated over 20% above their base value and will be held.

Weekly Compliance Report

Director of Director of ComplianceComplianceKevin [email protected]

Director of Director of Compliance – Compliance – Summer Summer SessionSessionBrandon [email protected]


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