WESTERN INVESTMENT CLUB

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WESTERN INVESTMENT CLUB

• September 22, 2003.

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AGENDA

• Introduction of the WIC Executive
• Summer in Review Craig Podolsky
• Portfolio Review
• WIC Opportunities

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WIC EXECUTIVE
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PRESIDENTS

• Joe Bubel
• Program HBA2, Richard Ivey School of Business
• Dave Dobrowolski
• Program HBA2, Richard Ivey School of Business
• Responsible for
• Coordinating WIC Executive team
• Liaison between WIC and the University Student
  Council
• Organizing clubs week and club membership

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FUND MANAGERS

• Josh Herzog
• Program 4th year Honours Philosophy
• Blaine Kideckel
• Program HBA2, Richard Ivey School of Business
• Responsible for
• Building, running analyst team
• Coordinating weekly WIC educational and buy sell
  presentations
• Liaison between WIC and Foundation Western

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VP Communications

• Matt Hendriks
• Program 2nd year Bachelor of Economics
• Responsible for
• Managing communications between the Exec and
  general members including
• Weekly emails
• Web page updates
• Booking social events

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VP ADMINISTRATION ALUMNI AFFAIRS

• Jackie Michalchuk
• Program 2nd year Music Administrative Studies
• Responsible for
• Recording meetings
• Weekly meeting minutes
• Voting process, Ballots
• Monthly Review to USC

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VP FINANCE

• Anuroop Duggal
• Program 2nd year Electrical Engineering
• Responsible for
• Maintaining WICs finances
• Monthly bank reconciliation, financial statements
  
• Yearly budgeting
• Keeping track of all receipts and paperwork

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VP Corporate Affairs

• Shane Heywood
• Program 2nd year Honours Political Science and
  International Relations
• Responsible for
• Finding, soliciting and organizing investment
  oriented speakers

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PORTFOLIO REVIEW
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NAVIGO NVG.TO

• Oil and Gas Producer focused in Western Canada
  (53-47 respectively)
• In Q2 2003, quarterly cash flow and earnings were
  up 42 and 912 respectively in comparison to the
  same period of 2002

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KEY STATISTICS

• Price 3.41 52wk Range 2.20-3.77
• P.E. (TTM) 17.74 TEV/EBITDA (2002) 5.48
• Price/Sales 1.59 Price/Book 1.11
• ROA 0 Debt/Equity 0.3
• Dividend Yield 0 Market Cap. 120 mil

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INCO N.TO

• Inco Limited is one of the world's premier mining
  and metals companies
• The world's second largest producer of nickel
  with a global market share of 20
• A producer of copper, cobalt and precious and
  platinum-group metals and a major producer of
  specialty nickel-based products.
• Inco is a Canadian-based global company with
  operations in over 40 countries.

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KEY STATISTICS

• Price 37.86 52wk Range 24.30-37.72
• P.E. (TTM) 34.99

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BOMBARDIER BBDb.TO

• Operated in the fields of aerospace, rail
  transportation equipment, recreational products
  and financial services
• Aerospace and transportation both generate close
  to CDN10 billion in revenues
• Bombardier currently has a CDN44 billion backlog

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KEY STATISTICS

• Price 5.70 52wk Range 2.56-6.77
• Dividend Yield 1.62

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CELESTICA

• Celestica Inc. specializes in providing a full
  range of electronics manufacturing services
  (outsourcing for other companies)
• Their focus is on the technology and
  telecommunications sector
• They operate in Asia, Europe and the Americas
• Celestica had 8.27 billion in revenues in 2002

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KEY STATISTICS

• Price 24.70 52wk Range 13.50 -34.30
• P.E. (TTM) N/A TEV/EBITDA (TTM) -4.38
• Price/Sales 0.58 Price/Book 1.06
• ROA -9.34 Debt/Equity 0.001
• Dividend Yield 0 Market Cap. 6.0 b.

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ABERCROMBIE FITCH

• Abercrombie Fitch Co. is a specialty retailer
  that operates stores selling casual apparel,
  personal care and other accessories for men,
  women and kids
• Abercrombie also runs the Hollister brand and as
  of February 1, 2003, operated 602 stores in the
  United States
• The flagship brand, targets 18-college while the
  Hollister brand targets 14-18

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KEY STATISTICS

• Price 27.70 52wk Range 14.97-33.65
• P.E. (TTM) 13.76 TEV/EBITDA (TTM) 6.1
• Price/Sales 1.63 Price/Book 3.44
• ROA 21.23 Debt/Equity 0
• Dividend Yield 0 Market Cap. 2.7 b.

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BERKSHIRE HATHAWAY

• A holding company with primary businesses in
  insurance (GEICO, General Re)
• Owns significant stakes in Coca-Cola, Gillette,
  and the Washington Post
• Run by the worlds greatest investor and second
  richest man Warren Buffet

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KEY STATISTICS

• Price 2537 52wk Range 2015-2549
• P.E. (TTM) 18.32 TEV/EBITDA (TTM) N/A
• Price/Sales 2.38 Price/Book 1.64
• ROA 3.72 Debt/Equity 0.113
• Dividend Yield 0 Market Cap. 117 b

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BOEING

• The Boeing Company had total company revenues in
  2002 of 54.1 b
• Involved in the production of commercial
  airplanes (Boeing 747)
• They develop, produce, support and modify
  aircraft for the U.S. military
• They build launch vehicles capable of lifting
  more than 14 tons into orbit
• They improve communications for people around the
  world through an advanced network of satellites,

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KEY STATISTICS

• Price 35.79 52wk Range 24.73-38.90
• P.E. (TTM) 103.26 TEV/EBITDA (TTM) 15.01
• Price/Sales 0.56 Price/Book 4.15
• ROA 0.58 Debt/Equity 2.09
• Dividend Yield 1.88 Market Cap. 28.6 b

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CHECK POINT

• Check Point Software Technologies Ltd. develops,
  markets and supports Internet security and
  Virtual Private Network (VPN) solutions with a
  65 market share
• 97 of the fortune 100 use Check Point security
  solutions

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KEY STATISTICS

• Price 18.36 52wk Range 12.62 22.20
• P.E. (TTM) 19.29 TEV/EBITDA (TTM) 12.05
• Price/Sales 10.83 Price/Book 3.49
• ROA 17.4 Debt/Equity 0
• Dividend Yield 0 Market Cap. 4.5 b

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ERICSSON

• Ericsson is engaged in international
  telecommunications, providing systems and
  products for fixed and mobile communications in
  more than 140 countries
• Ericsson has two main businesses
• The first is a very profitable systems business
  in which they sell the infrastructure to
  companies like ATT
• The second is their mobile phone business which
  for the past several years has been incurring
  substantial losses

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KEY STATISTICS

• Price 16.06 52wk Range 3.40-17.50
• P.E. (TTM) N/A TEV/EBITDA (TTM) -7.44
• Price/Sales 1.68 Price/Book 6.21
• ROA -9.51 Debt/Equity 0.63
• Dividend Yield 0 Market Cap. 25.40

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GENZYME

• Genzyme Corporation is a global biotechnology
  that develops and markets therapeutic products
  and services for serious diseases
• Their focus is on rare genetic disorders, renal
  (kidney) disease and osteoarthritis (breakdown of
  cartilage in the joints)
• Genzyme also researches into novel approaches to
  cancer, heart disease and other areas of unmet
  medical need
• The division's leading revenue generator in 2002
  with 90 million was Synvisc (Hylan G-F 20), a
  fluid that is injected into the knee for the
  treatment of pain in patients with osteoarthritis

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KEY STATISTICS

• Price 49.50 52wk Range 17.95-52.43
• P.E. (TTM) 48.08 TEV/EBITDA (TTM) 33.53
• Price/Sales 9.09 Price/Book 3.91
• ROA 5.9 Debt/Equity 0.21
• Dividend Yield 0 Market Cap. 10.99 b

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Magna

• Through various subsidiaries makes everything
  needed to put together a car, van, or truck.
• Company chairman Frank Stronach and his daughter,
  CEO Belinda, control the company.
• Customers include DaimlerChrysler, General
  Motors, Ford, Honda, Nissan, Isuzu, and Toyota

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KEY STATISTICS

• Price 49.50 52wk Range 49.35-83.60
• PE (TTM) 12.59 EV/EBITDA (TTM) 4.71
• Price/Sales 0.50 Price/Book 1.22
• ROA 6.36 Debt/Equity 0.15
• Dividend Yield 1.83 Market Cap. 7.12 b

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Bank of Montreal

• Canadian bank
• Maintains 1100 branches in Canada
• Provides investment services through BMO Nesbitt
  Burns
• Operates internationally in 12 other countries
• In U.S. owns Chicagos Harris Bankcorp which
  provides retail and corporate banking in the
  midwestern U.S.

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KEY STATISTICS

• Price 34.52 52wk Range 21.20-34.60
• PE (TTM) 14.89 EV/EBITDA (TTM) NA
• Price/Sales 2.54 Price/Book 2.10
• ROA 0.70 Debt/Equity NA
• Dividend Yield 2.94 Market Cap. 17.2 b

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Kingsway Financial

• Kingsway Financial Services makes risky drivers
  feel like kings. Hoovers.com
• Provides property and casualty insurance in U.S.
  and Canada
• Non-standard auto insurance accounts for more
  than half of premiums
• More than three quarters of premiums written in
  U.S.

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KEY STATISTICS

• Price 11.50 52wk Range 6.00-14.00
• PE (TTM) 7.89 EV/EBITDA (TTM) NA
• Price/Sales 0.34 Price/Book 1.32
• ROA 3.46 Debt/Equity NA
• Dividend Yield - Market Cap. 563 m

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Kraft Foods

• Spun off by Philip Morris (now Altria) in June
  2001 in USs 2nd largest IPO ever
• Altria owns 84 of Kraft
• Manufactures and markets packaged food products
• Business is conducted through two subsidiaries,
  Kraft Foods North America (KFNA) and Kraft Foods
  International (KFI)
• KFNA manages operations by product category
• KFI manages operations by geographic region
• Brands include Nabisco, Oscar Mayer, and Post
  cereals

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KEY STATISTICS

• Price 29.35 52wk Range 26.35-41.30
• PE (TTM) 14.26 EV/EBITDA (TTM) 9.75
• Price/Sales 1.70 Price/Book 1.86
• ROA 6.25 Debt/Equity 0.49
• Dividend Yield 2.43 Market Cap. 50.8 b

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MTR Gaming Group

• Owns and operates Mountaineer Racetrack and
  Gaming Resort
• This is one of four racetracks in West Virginia
  permitted to operate slot machines
• Complex includes a convention centre and 100-room
  lodge
• Also owns and operates the Ramada Inn and
  Speedway Casino in North Las Vegas

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KEY STATISTICS

• Price 8.83 52wk Range 5.05-10.33
• PE (TTM) 16.07 EV/EBITDA (TTM) 7.15
• Price/Sales 0.90 Price/Book 2.60
• ROA 6.90 Debt/Equity 1.50
• Dividend Yield - Market Cap. 245 m

41
Oracle

• Develops, markets and distributes computer
  software that helps customers manage their
  businesses
• Makes database management software which allows
  companies to store and access data across various
  platforms
• Offers business applications for data
  warehousing, customer relationship management
  (CRM), and supply chain management
• Currently trying to ruin a competitor, PeopleSoft

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KEY STATISTICS

• Price 12.12 52wk Range 7.30-14.03
• PE (TTM) 27.47 EV/EBITDA (TTM) 14.86
• Price/Sales 6.79 Price/Book 9.93
• ROA 22.94 Debt/Equity 0.05
• Dividend Yield - Market Cap. 63.4 b

43
Pfizer

• Global pharmaceutical company
• Discovers, develops, manufactures, and markets
  prescription medicines for humans and animals
• Also sells consumer products including
  self-medications for oral care, upper respiratory
  health, eye care, skin care, and others
• Has 14 drugs that are top sellers in their
  categories

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KEY STATISTICS

• Price 31.45 52wk Range 27.00-36.92
• PE (TTM) 51.69 EV/EBITDA (TTM) 37.78
• Price/Sales 6.96 Price/Book 3.56
• ROA 6.06 Debt/Equity 0.21
• Dividend Yield 1.87 Market Cap. 244.9 b

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Tyco

• Diversified manufacturing and service company
  with four business segments
• Fire and Security Services (includes ADT)
• Electronics (includes Telecommunications unit)
• Healthcare and Specialty Products
• Engineered Products and Services
• Through these segments manufactures, designs, and
  sells electronic components, undersea cable,
  disposable medical supplies, fire suppression and
  detection equipment, security systems, and flow
  control products

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KEY STATISTICS

• Price 21.90 52wk Range 11.20-21.97
• PE (TTM) - EV/EBITDA (TTM) 15.98
• Price/Sales 1.14 Price/Book 1.57
• ROA -0.20 Debt/Equity 0.80
• Dividend Yield 0.24 Market Cap. 43.7 b

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Wal-Mart

• Number one retailer in U.S., Canada, and Mexico
• Operates in all 50 states as well as in
  Argentina, Brazil, Mexico, Puerto Rico, and the
  UK
• Has 4700 stores
• These include Wal-Mart stores, Wal-Mart
  Supercenter stores (ASDA in the UK), and
  membership-only warehouse stores (Sams Club)
• Founder Sam Waltons heirs own about 38 of the
  companys stock

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KEY STATISTICS

• Price 58.14 52wk Range 46.25-60.20
• PE (TTM) 30.15 EV/EBITDA (TTM) 15.23
• Price/Sales 1.02 Price/Book 6.00
• ROA 9.12 Debt/Equity 0.60
• Dividend Yield 0.62 Market Cap. 254 b

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Retirement Residences Real Estate Investment Trust

• Provides care services and accommodation to
  Canadian seniors
• Makes monthly distribution to unit holders
• Has distribution reinvestment program providing
  1.03 in new units for each 1.00 reinvested

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WIC OPPORTUNITIES
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GENERAL MEMBERS

• Learn from presentations at general meeting
• Vote on club transactions
• Free booze/food at socials
• 1 hour/week

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RESEARCHERS

• No experience necessary
• Attend weekly researcher meetings
• Aide analysts in conducting research for club
  transactions
• 2-3 hours/week
• Researcher forms due next Monday (October 1st) at
  meeting.

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ANALYSTS

• Prepare buy/sell presentations and educational
  presentations
• Attend weekly meetings (researcher/ analysts
  meeting)
• Lead your own meetings with your researcher group.

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NEXT WEEK

• Hand in researcher and analyst forms for Monday
  September 29, 2003
• Meeting
• WICs Investment Strategy and Philosophy for the
  upcoming year
• Educational Presentation
• What is a stock?