Telecom Sector SP50

1
Telecom Sector (SP-50)

• July 2007

• George Andress
• Brandi Bennington

2
Agenda

• Sector Weights-SP 500 and SIM
• Economic Analysis
• Financial Analysis
• Valuation
• Recommendation

3
Sector Weights-SIM portfolio
4
Sector Weight- SP 500
5
Size and Composition

• Telecom sector composition

Current SIM Holdings
6
Telecom Sector/Unemployment Rate
7
Telecom Income Statement
8
Sector Price/Earnings relative to SP 500
9
Sector Price/EDITDA relative to SP 500
10
Sector Price/Cash Flow relative to SP 500
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Summary/Recommendation

• Defensive Sector
• Cheap sector relative to the SP 500
• Trending toward consolidation
• Opportunities in new technologies
• Opportunities in international growth

• Increase overweight in SIM portfolio by 100 basis
  points
• Results in a total overweight to the Telecom
  Sector of 2.01

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Questions ?
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Telecom Sector/Fed Funds Rate
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Telecom Sector/Change in Non-farm Payroll
15
Telecom Cash Flow
16
Historical Sector Performance
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Sector Price/Book relative to SP 500
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Sector Price/Sales relative to SP 500