INVESTMENT STRATEGY

2 Asset allocation

Asset categories Company name

US Large- cap equity Apple
Ford Motors Company
Netflix
Tyson Foods
US Mid/small cap equity Physicians Realty Trust
Astro Nova
US treasury bond treasury bond

3 Stock evaluation

Company name stock name

Apple AAPL
Ford Motors Company F
Netflix NFLX
Tyson Foods TNS
Physicians Realty Trust DOC
Astro Nova A LOT

Forward Rate of Return = Normalized Free Cash Flow/ Price + 5-Year EBITDA Growth Rate

Company name stock name

Apple AAPL
Ford Motors Company F
Netflix NFLX
Tyson Foods TNS
Physicians Realty Trust DOC
Astro Nova A LOT

Company name stock name

Apple AAPL
Ford Motors Company F
 Netflix NFLX
Tyson Foods TNS
Physicians Realty Trust DOC
Astro Nova A LOT

>>>>All the stocks are under evaluated

4 Variance Covariance Matrix

Year AAPL
1st year 53.07%
2nd year 25.56%
3rd year 35.57%
4th year 10.67%
5th year 43.22%
6th year -0.93%
7th year 0.3506352047
8th year 0.277170539
9th year -0.0361782851

AAPL
AAPL 0.1005387114
F 0.0193491009
NFLX 0.0348417292
TNS 0.04473369
DOC 0.0538152949
A LOT -0.002269951
0

Asset's expected return 14.84%

5 Portfolio
Exected return 21.93%
Variance 3.56%
Standard deviation 18.88%
Company name stock name
Apple AAPL
Ford Motors Company F
Netflix NFLX
Tyson Foods TNS
Physicians Realty Trust DOC
Astro Nova A LOT

portfolio
Equal weight
constraining variable None
value of constraint N/A
AAPL 16.67%
F 16.67%
NFLX 16.67%
TNS 16.67%
DOC 16.67%
A LOT 16.67%
total weight 100.00%
expected return 0.2193180769
standard deviation 0.1888007674
ESTMENT STRATEGY

stock name market cap

AAPL 926.517B
F 36.806B
NFLX 125.182B
TNS 31.915B
DOC 3.231B
A LOT 115.214M

. .
2015 2016
$ 98.66 $ 130.97
$ 11.95 $ 8.30
$ 114.38 $ 123.80
$ 50.13 $ 58.59
$ 12.98 $ 12.92
$ 13.48 $ 12.85

ice + 5-Year EBITDA Growth Rate

Normalized Free Cash Flow Price

10.67 210.36
3.28 8.96
-3.70 298.99
4.06 87.87
0.78 17.65
0.38 22.9

beta market return

1.08 11.75%
0.97 11.75%
 1.48 11.75%
0.43 11.75%
0.48 11.75%
0.44 11.75%
0 11.75%

F NFLX
67.90% 218.93%
-35.91% -60.56%
23.25% 33.63%
23.38% 297.63%
4.78% -7.21%
-4.15% 134.38%
-0.2549393764 0.08235711
0.420677379 0.2436187663
-0.317581288 0.7385034543

F NFLX
0.0193491009 0.0348417292
0.1714107087 -0.0765230222
-0.0765230222 0.3057600745
0.0219135292 -0.0433396285
0.0829752865 0.026821122
-0.0452514235 0.1538968049
0 0

35.50% 18.76%
 expected return standard deviation
14.84% 20.54%
35.50% 28.60%
18.76% 34.19%
21.56% 28.68%
24.43% 22.35%
16.50% 22.21%

olio
Max return
at standard deviation <=
15.00%
5% 5%
30% 44%
5% 5%
25% 36%
30% 5%
5% 5%
100% 100%
0.2587361749 0.271601305
0.2136573094 0.2150319855
1.2630739764
Asset allocation
10%
10%
10%
15%
10%
15%
30%

price
2017
$ 164.75
$ 11.19
$ 153.96
$ 63.29
$ 17.42
$ 13.45

5-Year EBITDA Growth Rate

0.10
-0.01
0.20
0.17
0.20
0.15

risk free rate

1.46%
1.46%
 1.46%
1.46%
1.46%
1.46%
1.46%

TNS
0.4317151305
0.2193860841
-0.0405841724
75.61%
22.02%
35.99%
0.1716590659
0.0841866851
-0.1642863784

TNS
0.04473369
0.0219135292
-0.0433396285
0.0317721235
0.0205543592
-0.0319790852
0

21.56%
. . E(dividend) .
2018 2016 2017 2018
$ 155.87 2.28 2.52 2.92
$ 7.04 0.6 0.6 0.6
$ 267.66 0 0 0
$ 52.60 0.15 0.225 0.3
$ 16.33 0.225 0.23 0.23
$ 18.51 0.28 0.28 0.28

forward rate of return standard deviation

14.84% 20.54%
35.50% 28.60%
18.76% 34.19%
21.56% 17.43%
24.43% 22.35%
16.50% 22.21%

CAPM: required rate of reforward rate of return evaluate

12.57% 14.84% underevaluated
11.44% 35.50% underevaluated
 16.69% 18.76% underevaluated
5.88% 21.56% underevaluated
6.40% 24.43% underevaluated
5.99% 16.50% underevaluated
1.46%

DOC A LOT
0.00% 0.1036982263
0.00% 0.0190361104
0.00% 0.3844033081
0.00% 39.11%
46.87% 25.39%
12.83% -10.23%
0.0131619235 -0.0262754067
0.3652315957 0.0686863827
-0.0493146032 0.3970520149

DOC A LOT weight

0.0538152949 -0.002269951 0 16.67%
0.0829752865 -0.0452514235 0 16.67%
0.026821122 0.1538968049 0 16.67%
0.0205543592 -0.0319790852 0 16.67%
0.0679996424 0.0025800699 0 16.67%
0.0025800699 0.0815292593 0 16.67%
0 0 0

24.43% 16.50% 100%

0.3170783994 0.1391010457 0.1866593935 0.2115034

0.1391010457 0.4140177637 #VALUE! 0.1480322
 0.1866593935 #VALUE! 0.5529557618 #VALUE!
0.2115034042 0.1480321899 #VALUE! 0.1782474
0.2319812382 0.2880543118 0.1637715543 0.1433679
#VALUE! #VALUE! 0.3922968326 #VALUE!

.
. yearly return . expected return standard deviation
2016 2017 2018
35.06% 27.72% -3.62% 19.72% 20.54%
-25.49% 42.07% -31.76% -5.06% 40.94%
8.24% 24.36% 73.85% 35.48% 34.19%
17.17% 8.42% -16.43% 3.05% 17.43%
1.32% 36.52% -4.93% 10.97% 22.35%
-2.63% 6.87% 39.71% 14.65% 22.21%

SML
40.00%

35.00%
 40.00%

35.00%

30.00%

25.00%
r
return r
20.00% L
o
15.00% f

10.00%

5.00%

0.00%
0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6
beta

0.2319812 #VALUE!
0.2880543 #VALUE!
0.1637716 0.3922968326
0.1433679 #VALUE!
0.2607674 0.0507943881
0.0507944 0.2855332894
 0.3506352 0.2771705 -0.036178
-0.254939 0.4206774 -0.317581
0.0823571 0.2436188 0.7385035
0.1716591 0.0841867 -0.164286
0.0131619 0.3652316 -0.049315
-0.026275 0.0686864 0.397052

ML
 required rate of
return
Linear (required rate
of return)
forecast return

2 1.4 1.6