SPDR Financial Services ETF - Final New

2016
Mark Fanagan
4/26/2016
SPDR Financial Services ETF – Weighting Analysis

MARKET OVERVIEW
As quarter one of 2016 comes to an end, no one can argue that it was the most volatile quarter in living memory. It
was the worst start to the year ever for most major global indexes, even worse than 2008. Several of the world’s major
indices – the FTSE 100, Nikkei and EUROSTOXX Index entered bear market territory, which is defined as a fall of over 20%
from the highs set last spring. If the so-called January effect* is to be believed, then investors are in for a roller-coaster
ride for the remainder of the1 year. Comparisons were being drawn back to the financial crisis of 2008 with many
commentators and analysts predicting the world was on the brink of recession. Given the market rout, it was
understandable why investors were nervous and panicked. Analysts such as Andrew Roberts at RBS, warned investors
to ‘sell everything’ and that 2016 would be a ‘cataclysmic’ year. It is this type of hyperbole that can exacerbate panic.
As the saying goes, the stock market has forecasted nine of the last five recessions. While hindsight is great, fast forward
to today as we close out quarter one. If everyone had taken Andrew Roberts advice, they might feel short changed
as markets haven significantly recovered from the lows reached in February. At the time of writing, U.S markets were
positive for the year and had hit 2016 highs despite being in correction (10% loss or greater) only a few weeks ago. The
Dow Jones Industrial Average had it best comeback in any quarter since 1933, at the time of the Great Depression
(CNBC, 2016). Despite the recovery, it is important to address the factors driving the selling and what sectors saw the
greatest impact. Some sectors did worse than others, most obvious has been energy due to the collapse in oil prices.
However, the focus of the research will be the financial sector which also came under significant pressure which we
will now explore.
China: The epicentre of this global market rout was
China. The health of the Chinese economy has been
hanging over investor’s mind for months now and there
are fears that a slowdown will dampen global growth
or worse tip the world economy into recession. The
stock market crash in the summer of 2015 is still fresh in
the minds of investors and Chinese regulators. Attempts
to curb the volatility and stimulate growth only
exacerbated the fear. Regulators introduced circuit
breakers, which were designed to prevent stock market
crashes by halting trading if the market fell more than
7%. It was no coincidence on January 4th, that the day
the circuit breakers came into effect, the Shanghai
Composite plunged by 7%. The trigger was set off twice
that week as Chinese investors panicked and tried to
dump stocks before the circuit breakers kicked in. The
Chinese authorities scraped the new rules that week. In
addition, the People’s Bank of China devalued the
Yuan (Renminbi) by the most since 2011. This sent a
worrying signal that the Chinese economy may be in
worse shape than initially thought. Credit has exploded
in China since 2008/2009 as authorities attempted to
kick-start growth as the rest of the world was in deep
crisis. This debt explosion fuelled a property and stock
bubble, which has since burst. Ghost cities lie idle across
China as construction has come to a halt. The
economy is struggling to transition and adjust to a ‘new
normal’ of slower growth. GDP Growth for this year has
been cut to between 6.5% - 7%. Many analysts believe
the real growth in the economy is far below what is
being reported.
*January Effect -the first month provides strong indication on the market trend for the year

Oil: The oil price collapse since last year has driven the
direction of global equity markets over the last few
months, as the highly leveraged energy sector struggles
to survive on lower oil revenue. All eyes have focused
on OPEC on whether they will freeze or cut supply in
order to drive up the price of oil. Brent Crude and WTI
hit 12 year lows earlier this year. Oil has fallen over
50% since its peak, trading below $30 a barrel as
shown in the chart below. Oil companies are not only
feeling the pressure, countries like Russia, Venezuela
and Saudi Arabia, who are highly dependent on oil
revenue have had to announce massive cuts in their
budgets to shore up their deficits. The spill over effect of
all this, has put pressure on banks, as it is estimated that
there is $123 billion of outstanding loans and lending
commitments to the industry. European banks exposure
could be as high as $200 billion which has and could
impact future earnings growth (Bloomberg: 2016).
Interest rates: One positive note for the financial
sector, was the Federal Reserve’s first interest rate last
December, since 2006. However, many investors are
worried that the U.S. economy is too fragile for a rate
rise and feared it would derail the recovery. The Fed
announced, that they planned further monetary
tightening for 2016, while other global central banks
were planning further monetary easing. The Bank of
Japan (BOJ) shocked investors by announcing
negative interest rates at its meeting in February. The
European Central Bank (ECB) announced a range of
measures – increasing QE (Quantitative Easing) monthly
purchases, cutting interest rates further to tackle low
inflation and low growth which has plagued Europe for
years. Negative interest rates are now becoming the
norm across Europe and Japan. Nearly two thirds of
sovereign and corporate bond yields are trading at
negative rates. However, with the Fed signalling further
rate hikes this year, this will provide welcome news for
the U.S. banks and the financial sector as bank margins
are likely to improve. However, this depends on the
Fed’s assessment of the economy. Expectations on
further rates cuts have diminished due to the market
turmoil.
Banking: As mentioned, fears of a global slowdown,
low to negative interest rates and plunging oil prices
have all put pressure on the global financial sector over
the last two quarters. In particular, European banking
stocks have been hardest hit, with Deutsche Bank
being at the epicentre. Rumours circulated that the
bank may be in trouble due to concerns it might be
unable to pay interest on some of its debt causing
panic (CNN Money: 2016). The panic prompted
Deutsche Bank’s CEO and the German Finance
Minister to take the unprecedented step of reassuring
investors that the bank was ‘rock solid’. This was
reminiscent of the days of the financial crisis. Bank
shares have recovered since the February lows. The
Euro STOXX 600 Bank Index is still down nearly 20% YTD
(as at 29/03). While the panic has subsided for now, these
elements are not far from the minds of investors. The U.S.
financial sector has not been immune from the panic
selling in Europe either which we will examine using the
SDPR Financial Services ETF (XLFS.).

SPDR FINANCIAL SERVICES INDEX (XLFS)
Summary:
The SPDR Financial Services Index (XLFS.) is primarily
comprised of companies from the following industries:
Insurance, Banks, Capital Markets, Mortgage Real
Estate Investment Funds and Diversified Financial
Services. XLFS is very much a banks ETF, with about 58%
of its holdings in bank and bank-like stocks. This
research will focus on the top ten holdings of the index
which are shown in the below pie chart. Berkshire
Hathaway, Wells Fargo, J.P. Morgan, Citigroup, AIG,
Goldman Sachs are the top names.
Performance:
As mentioned in the Index’s prospectus and shown in
the chart above, the fund has yet to complete a full
calendar year of investment operations. Therefore,
there is no past performance. However, as the widely
used disclaimer says past performance is not a reliable
indicator of future results. Therefore, we must examine
the holdings and highlight stocks which could provide
growth, that will positively impact the ETF. The
performance has been poor. Year to Date (31/03/16) the
fund is down 8.20%, while the low point of the quarter
the XLFS was down by over 22% in mid-February
(Bloomberg: 2016). As mentioned in the introduction,
fears over China’s economy, European banking sector
and the oil crisis have impacted financial shares
substantially. Despite the recent recovery, the XLFS is still
down 5.3% as at 31/03/16 since inception date on 6th
October 2015.
Distributions:
The fund pays a dividend quarterly. The latest dividend
per share was 0.12264c a share, paid on 29/03/16. This
is an increase on the Q4 2015 when the rate was
0.11461 according to the XLFS data. The fund also pays
any capital gains annually when the index realizes
capital gains or losses, whenever it sells securities.
Analysis:
Given the fund’s recent performance, I will be
analyzing the top ten weighted holdings and will
recommend if any of the stock weightings need to be
amended either by selling more of one stock or buying
another to adjust to weighting in an attempt to impact
the fund’s performance positively. I will be using 17
financial ratios to analyze each stock. I have broken the
ratios into five different categories including – Valuation
(P/E, PEG, EPS, Price/Cash Flow, EV/EBITDA, Dividend
Yield, Return on Total Capital) – Profitability (ROA, ROE)
- Liquidity (Cash Ratio, Current Ratio) – Capital Structure
(Debt/Equity, Tier 1 Capital) – Interest Margins (Interest
Coverage, Net Margin Interest). All are shown in the
stock screener on the next page.
12%
10%
10%
6%
5%
3%
3%3%
2%
2%
44%
XLFS. Holdings
BRK.B WFC JPM C USB BAC
AIG GS CB AXP Other

FINANCIAL RATIOS – STOCK SCREENER
Ratios (as at 24.03.16)
BRK.B WFC JPM C USB AIG GS CB BAC AXP
% of SPDR
11.63 10.01 9.68 6.26 5.48 2.73 2.55 2.44 2.96 2.2
Market Cap (B)
342.77 244.3 217.18 13.68 70.57 60.9 64.58 55.12 139.72 57.98
Shares Outstanding
(m)
2452.66 5076.71 3670.26 128.16 1737.32 1149.45 33820 461.67 10325.6 32818
Beta 0.84 0.99 1.21 2948 0.08 1.3 1.37 1.07 1.26 1.19
EPS
9.77 4.15 5.99 5.4 3.17 1.42 12.09 8.61 1.37 5.03
P/E
14.34 11.78 9.94 7.76 12.86 37.31 12.66 13.89 9.99 12.02
Price/Cash Flow
(ttm)*
11 16.6 2.9 3.1 10.7 29.4 16.2 9.7 10 6.7
PEG
0.93 0.99 1.44 1.42 1.08 1.05 3.51 2.49 0.2 1.14
Dividend Yield
N/A 3.06 2.91 0.48 2.48 1.89 1.72 2.23 1.46 1.87
Dividend Pay-out
Ratio
N/A 0.36 0.29 3 0.32 0.49 0.21 0.31 0.16 0.22
EV/EBITDA 8.22 14.52 5.83 8.26 14.78 8.59 24.96 14.23 10.64 9.87
Return on Total
Capital
7.3 4.97 2.96 2.72 5.53 1.71 1.46 7.45 2.25 7.98
ROA* 4.47 1.31 0.99 0.95 1.42 0.43 0.7 2.85 0.74 3.28
ROE 9.78 12.13 13 7.62 12.55 2.16 6.47 9.63 5.73 23.84
Current Ratio (Q4
2015)
3.04 0.52 2.11 2.15 0.4 2868 0.62 1.7 2.31 4.18
Cash Ratio N/A 0.2 1.87 1.78 0.4 0.96 0.3 0.15 0.96 1.37
Debt/Equity Ratio 0.33 1.54 1.31 1 1.3 0.327 2.801 0.324 1.034 2.558
Tier 1 Capital Ratio N/A 10.77 11.64 2 12.82 N/A 11.38 N/A 12.9 N/A
Interest Coverage 0.1 0.09 4.11 2.08 5.73 2.56 1.63 10.99 2.1 4.89
Net Interest Margin N/A 2.92 2.47 2.94 3.1 N/A N/A N/A 3 N/A
All figures:
Ycharts.com;
*Source: Morningstar

BERKSHIRE HATHAWAY BRK.B
Q4/FY 2015 Earnings:
Berkshire Hathaway (BRK.B), the third most valuable company in the world,
had an impressive 2015, as the company saw its net worth jump by $15.4 bn.
The company owned and operated by Warren Buffet, saw significant gains
across its portfolio. For the full year, Berkshire earned $17.36bn in operating
profit, with $4.67bn in Q4. Overall, Berkshire's profit increased to $24.08 billion
over the year. According to the annual report, the conglomerate’s recent
acquisition of Precision Castparts Corp for $32bn in cash will become one
the new ‘Powerhouses’ in its portfolio. These so called ‘Powerhouses’ are the
conglomerate's most profitable non-insurance companies. The report notes
that this acquisition will substantially increase their ‘normalized per-share
earning power’. BNSF, one of the company’s original ‘Powerhouse Five’,
earned $13.1 billion last year a raise of $650 million. The highly anticipated
annual report gives experts and analysts an insight into the mind of one of
the greatest value investors of all time. The report highlights the ‘Big Four’
investments made by the company. Interestingly enough two of his ‘big four’
investments are the top ten weighted holdings in the SPDR Financial Services
ETF – American Express & Wells Fargo. The reports states that the additional
shares of WFC were purchased increasing their holdings to 9.8% from 9.4%
while their AXP holdings rose as a result of stock repurchases by the company.
Berkshire’s Fundamentals:
Berkshire Hathaway has a strong list of key financial ratios. Initially as
mentioned in its latest earnings the company posted an impressive EPS of
$9.77 for 2015 and with its latest acquisition, EPS growth is likely to increase for
2016. BRK.B continues to invest for the future with $16 billion invested in
property, plant and equipment with more than two thirds of that investment
being deployed in the United States. This can be seen by its healthy ROA &
ROE ratios of 4.47% & 9.78% respectively. One attraction of the stock is its low
debt to equity ratio. Given that its recent purchase of Precision for $32bn in
cash highlights the Berkshire’s strong cash flow. Its P/CF ratio is 11%. The stock
continues to yield no dividend as Warren Buffet himself prefers, to reinvest
profits in things that will allow the company to prosper further. Finally, the
share price is currently trading at over 14 times earnings, while looks
expensive but its EV/EBITA is only at 8.22. This is explained by its low debt.
Analyst Recommendation:
Given the strong earnings growth across its portfolio and recent acquisitions,
no one can doubt the Oracle of Omaha’s expertise as shown by the last half
a century. There is potential for further deals in 2016. As mentioned in its
annual report, the company ‘craves efficiency’ and avoids companies that
are bloated and not cost efficient and Warren Buffet’s commitment to
search for opportunities that will likely add to future growth. The
conglomerate boasts strong financials and I believe the company is currently
undervalued as shown by its EV/EBITA ratio. In addition, the share price has
underperformed the S&P 500 by nearly 10%. Therefore, I would recommend
to buy the stock as the recent sell off has provided a perfect buying
opportunity. I would increase the weighting in the XLFS ETF to enhance its
performance.
Rating: Buy
March 24 2016
Company Summary:
Berkshire Hathaway, Inc. is a holding
company. Through its subsidiaries, the firm
engages in the insurance and reinsurance,
utilities and energy, freight rail transportation,
finance, manufacturing, service and retailing
businesses.
Company Profile:
Ticker: BRK.A
Exchange: NYSE
Industry: Conglomerate
Sector: Financials
CEO/Chairman: Warren Buffet
Share Price Performance:
Closing Price (24/03): $140.07
1 Year Performance (24/03): -7.80%
YTD Performance (24/03): -10.04%
S&P 500 YTD Performance (24/03): -0.39%
SPDR XLFS YTD Performance (24/03): -8.20%
**Source: StockChart.com
Key Financials: (as at 24/03)
Summary
% Weighting of XLFS. 11.63
Market Cap (B) 342.77
Shares Outstanding (M) 2452.66
Beta 0.84
Valuation
EPS (ttm) 9.77
P/E (ttm) 14.34
PEG (ttm) 0.93
Dividend Yield N/A
Dividend Pay-out Yield N/A
EV/EBITA 8.22
Return on Total Capital 7.30
Price/Cash Flow Ratio 11
Profitability
ROA (Return on Asset) 4.47
ROE (Return on Equity) 9.78
Liquidity Ratio
Current Ratio 3.04
Cash Ratio N/A
Capital Structure
Debt/Equity Ratio (31/12/15) 0.33
Tier Capital 1 Ratio (31/12/15) N/A
Margin
Interest Coverage 0.10
Net Interest Margin N/A
**Source: Ycharts.com & Morningstar

WELLS FARGO WFC.
Wells Fargo (WFC) delivered results of $4.15 (EPS) for 2015, up 1% in line with
expectations, according to its 2015 annual report. Total deposits remain
strong up 6% year on year to $1.2tr while loan growth continued to rise up
$13.3 billion. Non-performing assets fell by nearly $500m while non-accrual
loans decreased by $155m ‘driven by improvements in commercial and
consumer real estate portfolios’ however the decrease was ‘partially offset’
by a rise of nonaccrual loans, mainly as result of the deterioration in the oil
and gas portfolio. The energy sector is likely to cause a strain on bank’s
balance sheets in the coming quarters. This is something that will need to be
watched. WFC reported that its net interest margin was 2.92%, down 4 basis
points from third quarter 2015. Income from variable sources improved but this
gain was offset by consumer deposit growth. The San-Francisco based bank
relies more on a traditional loans-and-deposits business model than
competitors and is therefore more exposed to interest rate decisions (Forbes,
2016). The recent Fed rate hike and expected further increases will improve
this margin. Wells Fargo’s recent purchase of $32bn portfolio of loans and
leases from GE Capital brings the total value of deals it has struck with GE to
more than $126bn as General Electric decided to move out of its financial
services arm (WSJ: 2016). As a result, it’s long term debt increased by $14.3bn
as shown by its high Debt/Equity ratio. WFC saw higher net income in its
Wealth & Investment Management & Wholesale banking while it’s
Community Banking arm saw a 1% year on year.
Wells Fargo’s Fundamentals:
WFC’s fundamentals are very attractive. The bank still provides investors with
a healthy dividend yield of over 3%, higher than the other nine holdings. The
bank returned $12.6 billion to investors in 2015 via dividends and stock
repurchases. The Capital Tier 1 ratio, a primary yardstick employed by
regulators to measure bank's capital strength, remained strong in the Q4 at
10.77%, above the required 9%. The stock offers an impressive ROE at 12.13%.
While its return on total capital remains attractive for investors at nearly 5%.
This compares to the risk free rate (US Treasury 10-year 24/03/16) was yielding
just 1.91%. As noted, its purchase of GE’s loan portfolio has increased the
Debt/Equity to 1.54. This is slightly above average of other banking stocks. The
bank has a P/CF of 16.6 which represents better value in the stock screener.
Finally, the firm’s P/E ratio of 11.78 is below the historical average of 15 in the
S&P 500 while the EV/EBITA is 14.52 due to its moderate debt levels.
Bank shares in particular have endured a rough ride and Well Fargo is no
exception. The stock is down 10% YTD, significantly underperforming both the
S&P 500 & the SDPR XLFS. The bank’s fundamentals and key financial ratios
provide a healthy snapshot of the bank’s strength. The recent decline in my
view is overdone amidst the panic and provides a perfect buying
opportunity. Therefore, given the bank’s strong capital position, loan &
deposit growth and generous return to shareholders, I would recommend a
buy rating on the stock and to increase the weighting in the ETF
Rating: Buy
March 24 2016
Company Summary
Wells Fargo & Company is a diversified
financial services company providing
banking, insurance, investments, mortgage,
leasing, credit cards, and consumer
finance. The Company operates through
physical stores, the Internet and other
distribution channels across North America
and elsewhere internationally.
Company Profile:
Ticker: WFC
Exchange: NYSE
Industry: Banking
Sector: Financials
Chairman/CEO: John G Stumpf
1 Year Performance: -7.80%
YTD Performance -10.04%
Summary
Beta 0.99
Valuation
EPS (ttm) 4.15
P/E (ttm) 11.78
PEG (ttm) 0.99
Dividend Yield 3.06
Dividend Pay-out Yield 0.36
EV/EBITA 14.52
Price/Cash Flow Ratio 16.6
Profitability
ROA (Return on Assets) 1.31
Liquidity Ratio
Current Ratio 0.52
Cash Ratio 0.20
Capital Structure
Tier Capital 1 Ratio (31/12/15) 10.77
Margin
Net Interest Margin 2.92

J.P. MORGAN CHASE JPM
JPM delivered another strong set of results, with a record EPS of $6 on
revenue of $96.6bn beating analyst’s estimates. Consumer banking was a
point of strength during the fourth quarter. Its retail bank grew revenues 2%
to $11.2 billion, while profits increased 10% to $2.4 billion. Total loans
increased 25%, deposits rose 10% and credit card were up 6% across the unit.
These figures would suggest that the US consumer continues to spend and
not of a slowing economy. The nation’s largest bank by assets, was able to
post rising earnings as strong expense management amid an absence of
major litigation or trading blunders. Profits across the investment bank surged
80% to $1.7 billion, even as revenue fell 4% to $7 billion. Trading revenues fell
3% to $4.3 billion, reflecting weakness in bond, commodity and currency
trading, offset by higher activity in interest rates. Weaker trading revenue
added with these legal costs resulted in 6.6% decline in profits. The oil crash
continues to have spill-over effects for bank’s balance sheets as mentioned
by JPM’s CEO Jamie Dimon, who commented on the results in the annual
report. He said ‘businesses generated strong loan growth and credit
quality, except for some stress in energy’. While this is based on Q4, oil at the
time was trading in a high range of $50 and a low of $37. Q1 of this year saw
oil plunge to $27 a barrel which will likely increase this ‘stress’.
JPMorgan’s Fundamentals:
Its Tier 1 Capital Ratio was 11.68%, well above regulatory requirements while
its Return on Equity was 13% as result of lower legal costs and cost cutting.
However, despite the reduced legal costs, they still amounted to nearly $1bn
in the fourth quarter. JPM’s interest margins remain robust. Its net interest
margin is 2.47 – any positive number means the investment strategy pays
more than it costs. The Fed’s recent interest rate hike and possible further
hikes in 2016 will likely boost its margin further. While its interest coverage ratio
- a measure of how well a company can meet its interest obligations is a
healthy 4.11. The company continued to reward investors with $11bn return
to shareholders and a common dividend of $1.72 per share with a dividend
yield of 2.91%. Price/Cash flow is low more than likely as a result of the legal
costs. The stock is trading at under 10 times its earnings (P/E = 9.94) and It
EV/EBITDA is only 5.83%, the lowest amongst the other nine holdings.
Despite strong earnings investors shunned the stock as worries persisted over
the global banking system. However, I believe its low P/E ratio represents
value for money and looks cheap especially with the recent decline in its
share price. The stock is performing 9% worse than the S&P 500 which is slightly
worse than the SDP XLFS ETF. The firm maintains a strong capital buffer, strong
earnings and a generous dividend yield given the low rate environment.
There are headwinds for the company and while the recent turmoil will
impact on Q1 earnings, over the medium term the stock still looks attractive.
I recommend a buy rating on the bank and increase the weighting in the
SPDR XLFS.
Rating: Buy
March 24 2016
Company Summary
JPMorgan Chase & Co. provides global
financial services and retail banking. The
Company provides services such as
investment banking, treasury and securities
services, asset management, private
banking, card member services, commercial
banking, and home finance. JP Morgan
Chase serves business enterprises, institutions,
and individuals.
Company Profile:
Ticker: JPM
Exchange: NYSE
Industry: Banking
Sector: Financials
President/CEO: Jamie Dimon
1 Year Performance: 2.53%
YTD Performance: -9.92%
Summary
Beta 1.21
Valuation
EPS (ttm) 5.99
P/E (ttm) 9.94
PEG (ttm) 1.44
Dividend Yield 2.91
EV/EBITA 5.83
Profitability
Liquidity Ratio
Current Ratio 2.11
Cash Ratio 1.87
Capital Structure
Margin

CITIGROUP C
Citi group reported EPS of $5.40 for full year 2015 on net income of $17.2bn
with revenues of $77.2bn. For the quarter compared to last year, profits
increased substantially due to lower legal costs compared to Q4 2014.
Revenues rose 3% to $18.46bn compared to 2014. All reported quarterly
earnings this year have beaten analyst’s expectations. This comes after a
year ‘marred by failed stress test, problems in the Mexico subsidiary Banamex,
and a big mortgage-securities settlement with the Justice Department’
(WSJ). The bank is now the fourth largest in the US by assets as a result of cut
backs since the financial crisis while its competitors have expanded most
notably Wells Fargo. Citigroup ended 2015 with just $74 billion in assets, a 43%
year-over-year decline. But as Citigroup has trimmed its reach by shedding
scores of under-performing or burdensome businesses. It has re-focused on
core markets like North America, Mexico and Asia. The bank has made little
progress in chipping into its book value discount (WSJ). Under CEO Mike
Corbat, Citigroup has exited a number of businesses ranging from retail
banking to commodities trading in a handful of emerging markets and most
recently, One Main Financial, which it sold to Springleaf Financial, netting a
major accounting gain in the fourth quarter. Trading revenue fell 39% Q-On-
Q but up 29% Year-on-Year. Their earnings also showed deposits increased a
modest 1% to $908bn while loans decreased 4% year on year. The bank has
a strong Tier Capital 1 Ratio of 12%. Citigroup’s allowance for loan losses
declined overall. However, corporate non-accrual loans increased 32% to
$1.6 billion, ‘primarily related to the previously disclosed third quarter 2015
actions related to the North America energy portfolio in ICG’ (Citi Annual
Report, 2016).
Citigroup’s Fundamentals:
The stock is trading at under 8 times its earnings while its EV/EBITA of 8.26 is
also one of the lowest amongst compared to other banking stocks in the
XLFS top 10 holdings. This can be attributed to the low Debt/Equity ratio of 1-
1 which again is the lowest among the top U.S banks in the ETF. It is clear the
recent cost cutting measures have improved the capital structure of the
bank. Citi has a poor dividend yield of 0.48% which is below the US 10Yr yield.
This was a result of the bank rejecting a plan to increase capital returns to
shareholders. Given the stock’s recent run, investors have little to be cheerful
about. The company’s interest margins are encouraging with interest
coverage of 2.08 & net interest margin of 2.94 even in this low rate
environment. ROE is a modest 7.62% while the liquidity of the bank remains
fluid as shown by its current and cash ratio. P/CF is low as a result of
settlement with the Justice Department.
The company's strengths can be seen in multiple areas, such as its attractive
valuation levels, expanding profit margins and notable return on equity.
However, as a counter to these strengths, I also find weaknesses including
the unimpressive growth in net income and the company’s EPS. The stock
has suffered losses on a scale comparable to its European counterparts.
Therefore, I am recommending to sell the stock and reduce the stock’s
weighting in the XLFS ETF.
Rating: Sell
March 24 2016
Company Summary
Citigroup Inc. is a diversified financial
services holding company that provides a
broad range of financial services to
consumer and corporate customers. The
Company services include investment
banking, retail brokerage, corporate
banking, and cash management products
and services. Citigroup serves customers
globally.
Company Profile:
Ticker: C
Exchange: NYSE
Industry: Banking
Sector: Financials
CEO: Mike Corbat
Summary
Beta 2948.00
Valuation
EPS (ttm) 5.40
P/E (ttm) 7.76
PEG (ttm) 1.42
Dividend Yield 0.48
EV/EBITA 8.26
Profitability
Liquidity Ratio
Current Ratio 2.15
Cash Ratio 1.78
Capital Structure
Margin

US BANCORP USB
US Bancorp’s recent earnings for Q4 2015 and full year results recorded EPS
of $3.17 which was over 2% higher on 2015. However, its net income of
$1.476bn in Q4 was 0.8% lower than the previous year as a result of ‘higher
provision for credit losses and lower non-interest income’. The bank’s results
showed encouraging signs with higher deposits and loans in the fourth
quarter. Average loans in Q4 were 4.2% higher year on year at $10.bn while
deposits were $19bn higher compared o Q4 of 2014, a rise of 7%. Note one
recurring theme amongst bank’s latest are the higher provisions made for
credit losses. The annual reports note that approx. 1.2% of outstanding loans
related to the energy related business with the collapse in oil in Q4. This has
resulted in the ‘deterioration of a portion’ of these loans, while the impact
was not significant, further lower prices could see ‘additional stress’ within its
energy portfolio for 2016. It’s provision for credit losses was 5.9% higher than
in Q4 of 2014. The company boasts strong net interest margin of 3.10%. The
Chairman, President and CEO Richard K Davis wrote 2015 was a ‘remarkable
performance’ despite the challenges of ‘persistent and historically low
interest rate, modest economic growth and increasing regulatory
requirements’. He speaks about ‘momentum building in its core businesses
(Wealth Management and Security Services) and USB’s new agreement with
Fidelity Investments – exclusive issuer of Fidelity credit cards which will
strengthen their Payment Services business
US Bancorp’s Fundamentals:
USB’s fundamentals look healthy. Its P/E is under the historical average of 15.
However, its EV/EBITA is around the average for the other bank stocks in the
ETF. Its PEG looks attractive at 1.08 compared to other holdings. The net
interest margin in the fourth quarter of 2015 was 3.10 percent. ROA is one of
the highest amongst the top 10 holdings of 1.42. The company provides a
strong dividend yield for shareholders of nearly 2.5%, the second highest
amongst its peers. As noted in its report – it returned 72% of earnings back to
its shareholders. In addition, all regulatory ratios continue to be in excess of
“well-capitalized” requirements. It has a Tier 1 Capital Ratio of 12. Its liquidity
position is one area of concern. The current ratio - measures a company’s
liquidity is 0.40% which is much weaker than other bank stocks.
The stock’s performance YTD or the past year has remained resilient over Q1
among other banking stocks. It has outperformed the SDPR XLFS. Like other
banking sectors there are many things to be cautious of. US Bancorp’s recent
earning and attractive ratios do make the stock look attractive. The bank still
has to contend with many tail winds. As mentioned the higher provision for
credit losses as a result of slumping oil prices will likely impact Q1 earnings. I
would recommend buy USB and increase the weighting slightly.
Rating: Buy
March 24 2016
Company Summary
U.S. Bancorp is a diversified financial services
company that provides lending and
depository services, cash management,
foreign exchange and trust and investment
management services. The Company also
provides credit card services, mortgage
banking, insurance, brokerage, and leasing.
U.S Bancorp operates in the Midwest and
Western United States.
Company Profile:
Ticker: USB
Exchange: NYSE
Industry: Banking
Sector: Financials
Chairman/CEO: Richard K Davis
Summary
Beta 0.08
Valuation
EPS (ttm) 3.17
P/E (ttm) 12.86
PEG (ttm) 1.08
Dividend Yield 2.48
Dividend pay-out Yield 0.32
EV/EBITA 14.78
Profitability
Liquidity Ratio
Current Ratio 0.40
Cash Ratio 0.40
Capital Structure
Margin

AMERICAN INTERNATIONAL GROUP AIG
Q4/FY 2015 Earnings & Icahn Dispute:
AIG’s current restructuring plans have made in the headlines in the last few
months. Activist investor Carl Icahn has been pressuring and calling for a
breakup of the company. However, AIG’s CEO Peter Hancock has publically
rebuffed Icahn’s plans. Hancock has put forward a more modest plan to
simplify the company, including the sale of a broker dealer operations and
an initial public offering of up to 19.9% stake of United Guaranty Corporation.
However, the dispute has since ended. Carl Icahn and another activist
investor, John Paulson have been given two board seats in order to resolve
the dispute. The CEO notes in the company’s Q4 2015 earnings reports, that
their three year restructuring plan aims to make the company ‘leaner, more
profitable and focused insurer’. The latest earnings missed analyst’s
expectations as the insurer posted a larger after tax operating loss of $1.3
billion in Q4 2015 compared to an operating income after tax of $1.4 billion.
For the full year, operating income fell sharply to $2.2billion ($1.65 EPS) from
$7.5 billion in 2014. The loss related to ‘adverse prior year loss reserve
development, and lower returns on alternative investments as well as
realised capital losses and restructuring costs’.
AIG’s fundamentals:
Looking at their key financial ratios, AIG has the largest P/E ratio of 37.31 in
the top ten holdings. This would suggest that the stock is overvalued. While
their EV/EBITA of 8.59, is relatively cheap. This is due to the very low
debt/equity ratio of just 0.33. The issuer continues to reward shareholders by
returned more than $12 billion of capital through dividends and share
repurchases. Share buy backs totalled $2.5 billion with an additional $5 billion
authorised by the board of directors. Also they have increased their quarterly
dividend by 14% to $0.32c. The insurer’s goal is to return at least $27 billion to
shareholders by end of 2017. However, the current dividend yield is broadly
in line with the risk free rate. Price to Cash flow is the highest in the top ten
weighted stocks of 29.4. The company’s interest coverage ratio, a measure
of how well a company can meet its interest payments is quite strong at over
2.5%. Rising rates are good for large insurers because they tend to invest the
premiums paid by individuals and businesses in high-quality corporate bonds
as a way of generating income until claims come due. The fear among
insurance investors is that the Federal Reserve won’t follow through on its
desire to gradually raise interest rates. That means the pressure on insurers’
investment income could remain—potentially for years.
Despite the company’s restructuring plans and continued strong returns to
shareholders, I believe the stock is overvalued. I believe the recent
announcement of Carl Icahn being added to the board could result in
tensions and possibly derailing the planned restructure of the company in
the coming year despite the dispute being ‘resolved’. This could put pressure
on the stock. The share price is already down over 14% YTD. Therefore, I
would recommend to sell the stock and reduce its weighting in the XLFS.
_______________________
Rating: Sell
March 24 2016
Company Summary
AIG. is an international insurance
organization serving commercial,
institutional and individual customers. AIG
provides property-casualty insurance, life
insurance and retirement services.
Company Profile:
Ticker: AIG
Exchange: NYSE
Industry: Insurance
Sector: Financials
President/CEO: Peter D Hancock
Key Financials:
Summary
Beta 1.30
Valuation
EPS (ttm) 1.42
P/E (ttm) 37.31
PEG (ttm) 1.05
Dividend Yield 1.89
EV/EBITA 8.59
Profitability
Liquidity Ratio
Current Ratio 2868.00
Cash Ratio 0.96
Capital Structure
Margin

GOLDMAN SACHS GS
Q4/FY 2015 Earnings & Latest, News:
Goldman Sachs (GS) has been in the headlines for all the wrong reasons over
the past year due to litigations and settlements. The bank has agreed to pay
$5.06 billion in a lawsuit against the group that it misled mortgage bond
investors during the financial crisis resulting in investors losing billions of dollars.
The bank expected the agreement to reduce fourth quarter earnings by
about $1.5bn after tax. The settlement reduced earnings by $3.41 a share.
Adjusted earnings were $4.68 a share. These amount to $12.36 billion for 2015
with $4.01 billion as result of mortgage related litigation and regulatory
matters. This compares with $754m for 2014. Earnings have been hit because
of the settlements. During the fourth quarter of 2015, the firm recorded
provisions for the settlement with the RMBS Working Group of $1.80 billion
($1.54 billion after-tax). Their Q4 earnings were mixed. As mentioned
Goldman’s Q4 diluted EPS was $12.14 compared to $17.07 for 2014. However,
the provisions for settlements reduced their EPS by $6.53. It reported that its
2015 net revenue was $33.82bn. Revenue for the fourth quarter was $7.27bn,
down from $7.69bn a year ago. It was, however, more than the $7.07bn that
the analysts expected. Its Investment Banking section has performed well as
the company was ranked first worldwide in completed mergers &
acquisitions. Goldman’s revenue from trading bonds, currencies and
commodities (FICC) was $1.12bn, the lowest since the fourth quarter of 2008
during the depths of the financial crisis, during which the firm recorded losses
from investments and trading credit products. Goldman, like other banks,
had a tough year and according to WSJ, beset by a steady decline in a
fixed-income trading operation, that was once its most-reliable source of
profits. It is now turning its attention back to debt financing (WSJ: 2016)
Goldman Sachs’ Fundamentals:
GS is currently trading at over 12.5 times earnings with a high EV/EBITA of
24.96 which is the highest amongst the other top nine holdings. This can be
explained by the fact the company is highly leveraged – its Debt/Equity Ratio
is nearly 3/1. The company’s ROE of 6.47% ranks lower as it was impacted by
settlement costs which reduced the ratio by 3.8%. On a bright note, the firm’s
Common Equity Tier 1 ratio was 12.4%, well above regulatory requirements.
The company’s PEG ratio of 3.51 is higher than the other 9 holdings in the ETF.
GS continued its share buy back in 2015. It repurchased 22.1m shares of its
common stock. Its dividend yield is in line with other competitors while the
spread between the US 10 Year. Finally, the price to cash ratio of 16.2 would
suggest the firm is overvalued.
Analyst Recommendations:
The latest settlements, and possibly more in the future will damage image for
the firm further and impact earnings growth. I believe the stock is
unattractive, shown by its share price performance, high debt ratio, poor
liquidity position and I recommend to reduce the weighting in the ETF.
_________________________
Rating: Sell
March 24 2016
Company Summary
Goldman, Sachs & Co. focuses on the
distribution of Goldman Sachs Funds. The
company provides services that include
securities brokerage, dealership, and
underwriting; investment banking; commodity
trading; and investment consulting.
Company Profile:
Ticker: GS
Exchange: NYSE
Industry: Institutional Financial Services
Sector: Financials
Chairman/CEO/Partner: Lloyd C Blankefein
Summary
Beta 1.37
Valuation
EPS (ttm) 12.09
P/E (ttm) 12.66
PEG (ttm) 3.51
Dividend Yield 1.72
EV/EBITA 24.96
Profitability
Liquidity Ratio
Current Ratio 0.62
Cash Ratio 0.30
Capital Structure
Margin

CHUBB CB
Acquisition:
ACE Limited completed its $29.9bn acquisition of Chubb Corporation on
January 14th this year, creating the world largest publically traded
property/casualty insurer under the name Chubb Limited. Prior to this deal,
ACE also acquired Fireman’s Fund’s U.S. high net worth personal lines
business and launched ABR Re. According to the latest earnings report for
Q4 2015 and full year results, the new entity will be ‘better positioned and be
able to ‘pursuer profitable growth opportunities’ as the new firm will ‘enjoy
huge diversity and product mix’.
Following the acquisition, the two companies (ACE & Chubb) released
separate earnings but as one. It is important to view both earnings to give
an insight into potential future earnings.
ACE Ltd: In its full-year results, ACE reported: A 1.7 percent increase in
property/casualty underwriting income to $1.93 billion. A record 87.4
combined ratio in P/C versus 87.7 for 2014. Investment income for the year
of $2.2 billion, down a bit from $2.2 billion in 2014. A P/C expense ratio for the
year of 29.2 compared with 29.4 last year. ACE ‘s North American P/C
operation reported net premiums written increased 10.3 percent for the
year. Net premiums written, excluding Fireman’s Fund in-force business in the
second quarter of 2015, increased 6.3 percent for the year. The combined
ratio for the North American P/C operation for the year was 88.1 compared
with 88.4. Chubb: Chubb Limited (NYSE: CB) today reported net income for
the quarter ended December 31, 2015, of $2.08 per share, compared with
$1.66 per share for the same quarter last year. Operating income was $2.38
per share, compared with $2.47 per share for the same quarter last year. The
property and casualty (P&C) combined ratio for the quarter was 87.7%. Book
value and tangible book value per share remained flat from September 30,
2015, and were adversely impacted by net unrealized losses in the
company's investment portfolio (net of mark-to-market gains in the
company’s variable annuity reinsurance portfolios) of $356 million, after-tax.
In addition, book value and tangible book value per share were impacted
by unfavourable foreign currency movement of $138 million, after-tax, and
$120 million, after-tax, respectively.
Chubb’s Fundamentals and Recommendation:
Current PEG of 2.49% is the second highest on the stock screener. Attractive
dividend yields with a low pay-out ratio for investors. Its capital structure
remains strong with a low Debt/Equity Ratio. Its P/E & EV/EBITA while high, its
recent acquisition is likely to accelerate future growth. Chubb Ltd is the only
stock in the SPDR ETF which has outperformed both the S&P 500 & the EFT
itself clocking a gain of 2.36% YTD while other financial stocks have seen
declines of 10%-20%. The company maintains a strong liquidity position and
its interest coverage is very robust at 11%. The Return on Total Capital for
investors for investors is 7.45% which is impressive. Therefore, given the
insurer’s strong fundamentals, I recommend to buy more of this stock and
increase the weighting in the ETF.
Rating: Buy
March 24 2016
Company Summary
Chubb Limited operates as a property and
casualty insurance company. The Company
provides commercial and personal property
and casualty insurance, personal accident
and supplemental health insurance,
reinsurance and life insurance to a diverse
group of clients.
Company Profile:
Ticker: CB
Exchange: NYSE
Industry: Insurance
Sector: Financials
Chairman/CEO: Evan G Greenberg
1 Year Performance: +9.85%
YTD Performance: +2.36%
Summary
Beta 1.07
Valuation
EPS (ttm) 8.61
P/E (ttm) 13.89
PEG (ttm) 2.49
Dividend Yield 2.23
EV/EBITA 14.23
Price/Cash flow Ratio 9.7
Profitability
Liquidity Ratio
Current Ratio 1.70
Cash Ratio 0.15
Capital Structure
Margin

BANK OF AMERICA BAC
Bank of America’s 2015 results were the strongest in a decade. The bank
made $15.89 billion, the best result since 2006 and twice the amount made
in 2014. In its consumer business, loans grew by $12bn and deposits up $48bn.
Revenues rose 4% in Q4 to $19.8 bn. Net income reported at $15.9bn for 2015
with an EPS of $1.37. Although profit did improve, Bank of America endured
a number of stumbles along the way, including a flawed submission in the
Federal Reserve’s annual stress test and a shareholder battle over whether
Mr. Moynihan should remain chairman of the bank’s board. Mr. Moynihan
ultimately survived both tests but now needs to prove he can knit the slow-
and-steady consumer bank and the hard-charging investment bank into a
single force that can work together to best serve customers. One area I have
been focusing which will impact Q1 earnings for the banks is their exposure
to energy and the credit loss provision figures. The bank said that credit
quality ‘remained strong’ however there is reference to the energy sector of
their commercial portfolio which experienced ‘elevated charge off and
criticized levels’. Commercial loan defaults were up $75 million over the
quarter, driven by losses in energy, and the bank set aside an extra $144
million mostly to prepare for potential future defaults in that portfolio.
According to the earnings, the $21.3 billion energy portfolio is only about 2%
of the overall loan book The bank’s expense-cutting goals were helped by
the winding down of the unit that services troubled mortgages. Over the year,
that business cut about 6,000 jobs. Quarterly trading revenue, excluding an
accounting adjustment, rose 11% to $2.65 billion from $2.37 billion a year ago,
though that quarter was one of the industry’s weakest in recent years.
Compared with the third quarter, trading revenue fell 16%.
Bank of America’s Fundamentals:
Their PEG is the lowest among the other nine holdings at 0.20. Its dividend
yield and payout ratio are the second worst and worst in the top ten holdings.
The company does maintain a healthy Tier Capital 1 ratio of 12.90, the
compared to the other banks. While in this low rate environment, BAC’s has
strong interest margins. The bank’s P/E ratio of 9.99 does make the stock look
cheap. While the more reliable ratio – EV/EBITA is only 10.64. The share price
has lost over a fifth of its value earlier on in the quarter and is still down over
18% YTD. The bank’s liquidity positon is strong as shown by its current ratio and
cash ratio. BAC also boast a low debt/equity ratio on a comparable basis to
the other banks. Its ROE & ROA remain low at 0.74 & 5.73 respectively.
Earnings and their financials have been mixed. I believe the stock’s recent
decline does provide a perfect buying opportunity as the panic surrounding
the banking sector has been overdone. Concern about Moynihan’s position
at the bank could impact the stock negatively in the short term. Therefore, I
would recommend to hold and keep the weighting of the stock as 2.96% of
the ETF. I would re-assess the bank’s Q1 earnings and then make a
recommendation whether to increase or decrease the weighting.
Rating: Hold
March 24 2016
Company Summary
Bank of America Corporation accepts
deposits and offers banking, investing, asset
management, and other financial and risk-
management products and services. The
Company has a mortgage lending
subsidiary, and an investment banking and
securities brokerage subsidiary.
Company Profile:
Ticker: BAC
Exchange: NYSE
Industry: Banking
Sector: Financials
Chairman/CEO/President: Brian T Moynihan
Summary
Beta 1.26
Valuation
EPS (ttm) 1.37
P/E (ttm) 9.99
PEG (ttm) 0.20
Dividend Yield 1.46
EV/EBITA 10.64
Price/Cash Flow Ratio 10
Profitability
Liquidity Ratio
Current Ratio 2.31
Cash Ratio 0.96
Capital Structure
Margin

AMERICAN EXPRESS AXP
AXP’s saw its Q4 2015 earnings beat analyst’s expectations, however despite
the growth the company continues to shed jobs and restructure. The outlook
as outlined in the company’s earnings reported noted that it plans to
increase efficiency so as to reduce its overall cost base by $1bn. It also aims
to increase its EPS this year to between $5.40 and $5.70 compared to $5.03
in 2015. The stronger than expected EPS growth will be due to the planned
sale of box retailer Costco co-brand portfolio and ‘elevated spending on
growth opportunities’. Revenue rose 7% to $9.1 billion, largely driven by the
$719 million sale of the company’s investment in Concur Technologies. Much
of this money was then reinvested back into the company, put towards
things like growth initiatives and a renewed partnership with Delta. It also
went toward a $313 million restructuring charge related to the company’s
layoff plans. Net income was $1.4 billion, or $1.39 per share, up 11% from $1.3
billion, or $1.21 per share, a year ago. New York-based American Express is a
smaller competitor to Visa V and MasterCard, and is known for catering to
higher net worth customers. Recent efforts to position itself in the changing
payments landscape include acceptance of Apple Pay. The changing
technology landscape is also behind its plans to slash jobs. “Our business and
industry continue to become transformed by technology,” said Chenault on
a conference call. “As a result of these changes, we have the need and the
opportunity to evolve our organization and cost structure.” The company did
note that earnings were hurt by strong dollar. The amount cardholders spent
on their American Express cards rose 6% in the fourth quarter, while loan
balances rose 7% which would suggest consumers are more confidant and
continue to spend.
American Expresses’ Fundamentals:
The company’s earnings and fundamentals look healthy. The stock
according to its EV/EBITA ratio looks cheap at 9.87 and given the recent
share decline makes it look a bargain. Its P/E ratio is under the historical
average of 15 and its Price to Cash Ratio is low to 6.7. Looking at the
profitability ratios one figure stands out which is Its ROE. The company’s
impressive ROE is the highest compared to the other nine holdings at nearly
24% and the company’s underlying strength is also shown by its liquidity
position. One worrying ratio is the debt to equity ratio - AXP has a very high
debt to equity ratio. But given the current restructuring this should reduce.
Helping to drive the strong quarter. The interest coverage which is a measure
of how well a company can meet its interest payment obligations is strong
at 4.89. Finally, its dividend yield is in line with the other holdings.
AXP’s financials speak for themselves. The proceeds from the sale of Concur
Technologies being reinvested back into the firm could increase future
growth in earnings. The stock’s recent decline provides a perfect opportunity
for value investors. Therefore, I would recommend to purchase more of the
stock and increase the weighting in the XLFS.
_________________________
Rating: Buy
March 24 2016
Company Summary
American Express Company is a global
payment and travel company. The
Company's principal products and services
are charge and credit payment card
products and travel-related services
offered to consumers and businesses
around the world.
Company Profile:
Ticker: AXP:US
Exchange: NYSE
Industry: Specialty Finance
Sector: Financials
Chairman/CEO: Kenneth Chenault
Summary
Beta 1.19
Valuation
EPS (ttm) 5.03
P/E (ttm) 12.02
PEG (ttm) 1.14
Dividend Yield 1.87
EV/EBITA 9.87
Price/ Cash Flow Ratio 6.7
Profitability
Liquidity Ratio
Current Ratio 4.18
Cash Ratio 1.37
Capital Structure
Margin

CONCLUSION:
Company BRK.B WFC JPM C USB AIG GS CB BAC AXP
Rating Buy Buy Buy Sell Buy Sell Sell Buy Hold Buy
Current Weighting % of
XLS.
11.63 10.01 9.68 6.26 5.48 2.73 2.55 2.44 2.96 2.2
Analyst Summary:
The financial sector is facing a tough first quarter earnings season as result of the market rout. As shown with many of
the top holdings, the collapse in oil prices in the fourth quarter of 2015 has impacted the balance sheets of many firms
as banks have had to set aside more credit loss provisions for further deterioration in their energy portfolios. Given that
oil dropped further in Q4, this Is will have an impact for earnings. My view is that the recent declines are pricing in lower
expected earnings growth and therefore some stocks like JPM provide a perfect buying opportunity to seek bargains
as some stocks have lost between 10-20% of their value in the space of a few weeks. Of the top ten weighted stocks in
the SDPR Financial Services ETF (XLFS), I have recommended a buy rating on BRK.B, WFC, JPM, USB CB & AXP to increase
their weightings in the ETF. I have recommended four sell ratings for C, AIG & AXP to decrease their weighting in the
XLFS, while I have advocated a hold rating on BAC.
The ETF has had a tough ride since its inception in
October 2015. as the financial sector has had to deal
with strong economic headwinds from China, to
increased regulation and dovish monetary policy over
the past seven years. But the Federal Reserve’s
anticipated interest rises and more hawkish tone will be
a positive for bank shares while the rest of the developed
world in grappling with negative interest rates. However,
that said, raising rates too fast could impact negatively
on the economic outlook for the U.S. and the globe. The
IMF have recently cut their global growth forecasts again
citing the slowdown in emerging economies remain
fragile and the stability and recovery of the Chinese
economy will be crucial. It is important for investors to take stock of the recent rout. Despite the comeback, was it the
correction that many have predicted that has been long overdue or it is a calm before the storm? Only time will tell.
* Warning: The value of your investment may go down as well as up and you may lose some or all of the money you invest. Past performance is not a reliable
guide to future performance. Investments denominated in a currency other than your base currency may be affected by changes in currency exchange rate
60%
30%
10%
Stock Ratings
Buy Sell Hold

REFERENCES:
Stock Charts:
Stock Charts (2016): Berkshire Hathaway, Stock Charts: Available at: http://stockcharts.com/h-sc/ui?s=BRK%2FB
[Accessed, 25th March 2016]
Stock Charts (2016): Wells Fargo, Stock Charts: Available at:http://stockcharts.com/h-sc/ui?s=WFC [Accessed,
25th March 2016]
Stock Charts (2016): JPMorgan, Stock Charts, Available at:http://stockcharts.com/h-sc/ui?s=JPM [Accessed,
25th March 2016]
Stock Charts (2016); Citigroup, Stock Charts Available at:http://stockcharts.com/h-sc/ui?s=C [Accessed, 25th
March 2016]
Stock Charts (2016): USBancorp, Stock Charts, Available at:http://stockcharts.com/h-sc/ui?s=USB [Accessed,
25th March 2016]
Stock Charts (2016): American International Group, Stock Charts, Available at:http://stockcharts.com/h-
sc/ui?s=AIG [Accessed, 25th March 2016]
Stock Charts (2016): Goldman Sachs, Stock Charts, Available at:http://stockcharts.com/h-sc/ui?s=GS
Stock Charts (2016): Chubb, Stock Charts, Available at:http://stockcharts.com/h-sc/ui?s=CB [Accessed, 25th
March 2016]
Stock Charts (2016): Bank of America, Stock Charts, Available at:http://stockcharts.com/h-sc/ui?s=BAC
Stock Charts (2016): American Express, Stock Charts, Available at:http://stockcharts.com/h-sc/ui?s=AXP
Financial Ratios:
Morningstar
Morningstar (2016): Berkshire Hathaway. MorningStar, Available at:
http://www.morningstar.com/stocks/xnys/jpm/quote.html [Accessed, 25th March 2016]
MorningStar (2016): JPMorgan Cash & Co., Available
at:http://www.morningstar.com/stocks/xnys/brk.b/quote.html [Accessed, 25th March 2016]
MorningStar (2016): Wells Fargo, MorningStar., Available
at:http://www.morningstar.com/stocks/xnys/wfc/quote.html [Accessed, 25th March 2016]
MorningStar (2016): Citigroup., Available:http://www.morningstar.com/stocks/xnys/c/quote.html [Accessed,
25th March 2016]
MorningStar (2016): US Bancorp., Available at:http://www.morningstar.com/stocks/xnys/usb/quote.html
MorningStar (2016): American International Group., Available
at:http://www.morningstar.com/stocks/xnys/aig/quote.html [Accessed, 25th March 2016]

REFERENCES:
MorningStar (2016): Goldman Sachs., Available at:http://www.morningstar.com/stocks/xnys/gs/quote.html
MorningStar (2016): Bank of America., Available at:http://www.morningstar.com/stocks/xnys/bac/quote.html
MorningStar (2016): Chubb Ltd., Available at:http://www.morningstar.com/stocks/xnys/cb/quote.html
MorningStar (2016): American Express Co., Available
at:http://www.morningstar.com/stocks/xnys/axp/quote.html [Accessed, 25th March 2016]
Ycharts
Ycharts (2016): Berkshire Hathaway (BRK.B): Ycharts, Available at: https://ycharts.com/companies/BRK.B
Ycharts (2016): Wells Fargo (WFC): Ycharts, Available at: https://ycharts.com/companies/WFC [Accessed, 25th
March 2016]
Ycharts (2016): JPMorgan Chase & Co. (JPM): Ycharts, Available at: https://ycharts.com/companies/JPM
Ycharts (2016): Citigroup (C): Ycharts, Available at: https://ycharts.com/companies/C [Accessed, 25th March
2016]
Ycharts (2016): US Bancorp (USB): Ycharts, Available at: https://ycharts.com/companies/USB [Accessed, 25th
March 2016]
Ycharts (2016): American International Group (AIG): Ycharts, Available at: https://ycharts.com/companies/AIG
Ycharts (2016): Goldman Sachs (GS): Ycharts, Available at: https://ycharts.com/companies/GS [Accessed, 25th
March 2016]
Ycharts (2016): Bank of America (BAC): Ycharts, Available at: https://ycharts.com/companies/BAC [Accessed,
25th March 2016]
Ycharts (2016): Chubb Ltd (CB): Ycharts, Available at: https://ycharts.com/companies/CB [Accessed, 25th
March 2016]
Ycharts (2016): American Express (AXP): Ycharts, Available at: https://ycharts.com/companies/AXP [Accessed,
25th March 2016]

REFERENCES:
Market Overview:
Linsell, K. (2016): Deutsche Bank to Buy Back $5.4 Billion Bonds in Euros, Dollars. Bloomberg, Available at:
http://www.bloomberg.com/news/articles/2016-02-12/deutsche-bank-to-buy-back-5-4-billion-bonds-in-euros-
dollars [Accessed, 25th March 2016]
Egan, M. (2016): Why investors are freaking out over European banks (again). CNN Money, Available at:
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2016]
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REFERENCES:
Stocks:
BRK.B
Berkshire Hathaway 2015 Annual Report:
http://www.berkshirehathaway.com/2015ar/linksannual15.html
WFC:
Team, T (2016): Energy Exposure Drags down Wells Fargo’s Q4 Performance. Forbes. Available at:
http://www.forbes.com/sites/greatspeculations/2016/01/20/energy-exposure-drags-down-wells-
fargos-q4-performance/#1325ce937620 [Accessed, 15th April 2016]
Mann, T., Glazer, E (2016): GE to Sell Commercial Lending, Leasing Business to Wells Fargo. Wall Street
Journal, Available at: http://www.wsj.com/articles/ge-to-sell-commercial-lending-leasing-businesses-
to-wells-fargo-1444742310 [Accessed, 4th April 2016]
Wells Fargo Q4 2015 news release: https://www.wellsfargo.com/about/investor-relations/quarterly-
earnings/
JPM:
Lopez, L (2016): JPMorgan Misses Big, Business Insider, Available at: http://uk.businessinsider.com/jpm-
q4-earnings-2015-1?r=US&IR=T [Accessed, 4th April 2016]
Team, T (2016): Strong Q4 Retail Banking Performance Helps JPMorgan Post Record Results for 2015.
Available at: http://www.forbes.com/sites/greatspeculations/2016/01/15/strong-q4-retail-banking-
performance-helps-jpmorgan-post-record-results-for-2015/#20d2ff2f6ee8 [Accessed, 4th April 2016]
JPMorgan 4Q 2015 Earnings Press Release: https://www.jpmorganchase.com/corporate/investor-
relations/quarterly-earnings.htm
C:
Citigroup Reports Fourth Quarter 2015 Earnings per Share of $1.02; $1.06 Excluding
CVA/DVA1http://www.citigroup.com/citi/news/2016/160115a.htm
Rexrode, C., Rudegeair, P (2016): A Leaner Citigroup Weighs in with a Robust Profit. Wall Street
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Gara, A (2016): Citigroup Misses Lowered Earnings Bar as CEO Corbat Faces Capital Test. Forbes,
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lowered-bar-as-capital-test-looms/#5657e3138131 [Accessed 16th April 2016]
USB
US Bancorp 4Q Earnings Release: http://phx.corporate-ir.net/phoenix.zhtml?c=117565&p=irol-
quarterlyearnings

REFERENCES:
AIG:
Basak, S. (2016): Icahn says AIG Presentation Inadequate, Seeks Director Slate. Bloomberg. Available
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seeks-director-slate [Accessed 10th April 2016]
Benoit, D, Scism, L (2016): Activist Investors Make Peace with AIG. Wall Street Journal, Available
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1455226425 [Accessed 10th April 2016]
AIG Reports Fourth Quarter 2015 After-Tax Operating Loss of $1.3 Billion or $1.10 Per Diluted
Sharehttp://www.aig.com/about-us/news-and-media
GS:
http://www.goldmansachs.com/media-relations/press-releases/current/announcement-14-jan-
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Keats, R (2016): Investment Banking Drove Goldman Sachs’ Earnings Growth. Yahoo Finance,
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Barlyn, S. (2016): Goldman Sachs to pay $5 billion in U.S. Justice Dept Mortgage bond pact. Reuters.
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CB:
Simpson, A (2016): ‘Old’ ACE, Chubb Report Q4, Full Year 2015 Results. Insurance Journal, Available
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2016]
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information/default.aspx
BAC:
Bank of America 2015 Quarterly Earnings Dec 31 2015:
http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=quarterlyearnings#fbid=IleMLAN4wg
U

REFERENCES:
Rexrode, C., Rudegeair, P (2016). Bank of America’s Profit Gains, as Legal Costs Tumble. Wall Street
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[Accessed 12th April 2016]
AXP:
American Express Q4 2015 Earnings Dec 31 2015. http://ir.americanexpress.com/Earnings-and-Events
http://ir.americanexpress.com/file/Index?KeyFile=32615475
Gensler, L (2016: American to Slash 4,000 jobs on heels of strong quarter. Forbes, Available
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