Michigan Based Portfolio

MI Portfolio

Investment Summary

        We have positioned our portfolio for a mix of value and high growth stocks. In our portfolio we have a total of 15 stocks all based out of Michigan. When evaluating these positions, we first looked at the intrinsic value two years out to find stocks trading at a discount our portfolio as a whole using intrinsic value is projected to make 84%. To solidify our numbers and positions, we collected 5 years past data using portfolio theory and the results showed that we are expected to make 183% compared to the SPY which makes 89.1%, that is 94% premium over SPY. To get this return however we are taking on more risk our annualized volatility is 18.8% while SPY volatility is 15.2%. Using this data, we are certain our portfolio is well positioned to out preform the market by a great margin. The Michigan portfolio we created also has a 1.6% annual dividend yield with most companies increasing dividend going into the future. Finally, our Intra-portfolio correlation is 0.36, the closer the number is to 0 the better, this shows our portfolio isn’t highly correlated.

Positions Summary

        XPO Logistics- XPO Logistics, Inc. is a provider of transportation logistics services and a provider of engineered, technology-enabled contract logistics. XPO logistics recently acquired Con-Way freight a Michigan based company. The company is growing very rapidly in q3 of 2015 the company reported, total gross revenue increased 256.5% year-over-year to $2.4 billion, and net revenue increased 542.4% to $1.1 billion. Full year EBITDA was $625 million, for 2016 the company announced it is projected to make an adjusted $1.25 billion of EBITDA using existing operations. This stock is massively underpriced using our calculations this stock is worth is worth 157.4 dollars intrinsically. This stock is currently trading at $29.48. There is a potential upside of 434% over 2 years.

WHR- Whirlpool Corporation is a manufacturer and marketer of home appliances. The Company manufactures products in 14 countries and markets products in nearly every country around the world under brand names, such as Whirlpool, KitchenAid, Maytag, Consul, Brastemp, Amana, Bauknecht, Jenn-Air and Indesit. In q3 the company reported record profit net sales are up 9% YoY even with currency dollar being strong. The stock is trading at $156 dollars per share while intrinsically is worth $303 dollars representing a 212% upside over 2 years.

MBWM- Mercantile Bank Corporation is a bank holding company. The Company owns Mercantile Bank of Michigan (the Bank). The Bank is a state banking company. The bank, through its approximately 53 office locations, provides commercial banking services primarily to small- to medium-sized businesses and retail banking services in and around the West and Central portions of Michigan. Using intrinsic value this stock is worth $75 dollars per share, and is currently trading at $25.26 dollars representing a 142% upside in two years.