Edison International

Edison International NYSE Symbol EIX • In S&P 500 Large-cap growth “Our key operating principles emphasize financial discipline, superior execution and innovative solutions to the challenges of today and tomorrow” EDISON INTERNATIONAL®

Edison International is a public utility engaged in supplying electricity to a service territory of 50,000 square miles of central costal and southern California. As a public utility company it has the characteristic of stability in performance and it is a good reason to transfer that stability in my portfolio. The company has investments worldwide in energy and infrastructure, power generation, electric transmission and distribution. This utility has been providing electric service for more than 120 years. Its service territory includes more than 180 cities and company’s consolidated assets account for $ 32.6 billion. I bought the stock because other than being a stable utility company, the analyst’s report was very promising for the future. With the housing and business market starting to recover from the recession, the company earnings are expected to grow by 10% for fiscal 2010. By carefully analyzing earnings per share for the past five years, I realized that the deviation from year- to- year is small, which is a good indicator of stability. EPS were stable for the second quarter of 2009. ROE is above industry average and the company has a strong P/E ratio as compared to other competitors. My decision to buy shares of Edison Int. was influenced by the management strategies to enhance liquidity through strong cash flow generation.

There is an ongoing process of developing projects in expansion of distribution systems and investments in other areas.

Dell Inc. DELL • In S&P 500 Large-Cap Growth

Dell designs, develops, manufactures, market, sells, and supports computer systems and services worldwide. It’s a four-star rating company and is the preferred desktop and laptop provider of enterprises in the U.S. It’s the number one PC supplier to small and medium businesses for 10 year in a row. Dell ships 140,000 systems per day, more than one in every second. The top 5 commercial banks in U.S. run on Dell. I bought shares from the company because the estimation of analysts indicates a growth of 10% in revenues for the fiscal year 2009. The positive steady stream of EPS for the last 5 years is a strong indicator. Dell is a company that has been successful in keeping a high level of ROE for the last 4 years. During this period, the increase in the current ratio shows the ability of management to reinforce liquidity. The most important thing I like about the company is its management ability to keep up with the innovation of its products not only in their technical characteristics, but from a diversification point of view also. Another important strategy I like about Dell is the way that they design the communication channel with the customers. By communicating directly to the customer, the company is able to understand customer needs and assistance. This is a strategy that when combined with their expertise in exploring and penetrating global markets, increases my confidence as an investor.

The shares of this large-cap growth will enhance my portfolio and increase the possibility of capital gains. The quality of their products, and the opportunity to decide how to build and at what cost for the customer gives Dell a high rating as a technology firm.

Black & Decker Corporation NYSE Symbol BDK • In S&P 500 Large-Cap Blend

Black & Decker is a global manufacturer and marketer of quality power tools and accessories, hardware and home improvement products, and technology-based fastening systems. Its products are marketed in more than 100 countries. Its manufacturing operations are established in 11 countries around the world. The company is characterized by a strong brand name along with strong capabilities for new product development. By looking at its income statement for 2008 it reveals growth despite the decline in its revenues. This is a good indicator of strong foundation and management ability to turn things around and control costs even during difficult economic times. According to the analyst for the company’s stock, the 12-month target price of $52 represents a target multiple just below 14X of company’s 2010 EPS. An economic indicator of better performance is the predicted increase in the housing market. Foreclosures being purchased cheap and in the need of repair will increase sales of the company’s products for the next months. With average price volatility for the past year, the good news is that the company has received a higher quality ranking from B to B+ from S & P. The main reason for it is the relative growth and stability of earnings and dividends during the last 10 years. For the last 4 years EPS increased steadily and that increased my confidence to buy shares of BDK and add it to my portfolio as a potential for capital gains.

Corning Inc.

NYSE Symbol GLW • In S&P 500 Large-Cap Blend

Corning incorporated is the world leader in specialty glass and ceramics. The company focuses on many key components that are used by other companies to build high-tech systems for consumer electronics, mobile emissions control, telecommunications and life sciences. The four major segments of the company are, Display Telecommunications, Specialty Materials, Environmental Technologies, and Life Sciences. Major products include: Optical Fiber, Cable systems, Ceramic substrates, Diesel particulate filters and many other products. The main reason for purchasing the stock was the company’s performance in the period 2007-2008. Net income doubled for the period along with Earning per share. I see the increase in demand from China for the company’s product as a strong economic indicator for future growth in earnings. It’s a four-star stock as recommended by S & P 500. I look at the company’s products increasing demand as a direct response to the fast development of electronic products and a tremendous increase in telecommunications channels around the world. There are two more key indicators that influenced my decision to buy company’s shares: The first one is the positive cash flow from operations for three consecutive years. The second is the increase in capital expenditures. The need for increased capital expenditures is an indicator of expansion, and growth.

FedEx Corporation

NYSE Symbol FDX • In S&P 500 Large-Cap growth

It’s the world’s largest provider of guaranteed express delivery services. The company has four operating segments: FedEx Express which is specialized in shipping service for delivery of packages internationally, as well as international trade services. FedEx Ground operates in business and residential package delivery in the U.S. FedEx freight operates in less-than- truck load freight services as well as shipment carrier services. FedEx Services specializes in sales, marketing, and information technology support as well as in document solutions. I decided to buy shares of FedEx because of its segmentation nature which is a good strategy not only for growth, but to deal with economic downturns as well. Over a 10-year period revenues have increased at an annual growth rate of 6.9%. Its long-term debt represents only 11% of total equity, which is an indicator of a strong financial structure. Another good reason is the quarterly data which shows an increase in revenue and net income for the third quarter of 2009. With a beta of 1.09 this is stock of low volatility. With the global recession the company decreased the capital expenditures as a function of decreased demand, but the management was able to maintain positive cash flow from operations. Another important fact to be taken into consideration for future growth is the strategy of cost-reduction by buying fuel-efficient airplanes. I’m confident that the shares purchased will enhance my capital gains.

Barnes & Noble NYSE Symbol BKS • In S&P Mid-Cap 400

Mid-Cap Blend

It’s the world’s largest bookseller and the highest nationally rated bookseller brand. Founded in 1986 and based in New York, the company sells trade books, mass market paperbacks, bargain books, magazines, gift, café products and services. It sells music and movies directly to customers. According to Yahoo’s business summary, as of January 31 the company operated 726 book stores. It is a company with a continuous positive cash flow from operations. Knowing that the introduction of nook TM, its wireless eBook reader, will have an effect in sales, I decided to pay attention to its stock. I shop at Barnes & Noble and I like their products and their shelf organization. They manage a quick delivery service for new releases. Looking at the current economic downturn, more people are turning to school and it represents a good opportunity for the company to increase sales. As baby boomers retire, they are going to read more books and use the areas of the book store. The company applies an aggressive discount pricing strategy. The ROE for the fiscal year 2009 was 9.4% and the industry average was 7.7% It is a medium-risk investment and I wanted to increase the risk of my portfolio on top of the companies with a more stable growth.

Alaska Air Group Inc. NYSE Symbol ALK • In S&P Mid-Cap 400 Mid-Cap Value

Alaska Air Group is the holding company for Alaska Airlines and Horizon Air. The company is a passenger air service, freight, and mail services primarily operating within the state of Alaska and on the West Coasts. Increased economic activity in Alaska indicates possibility for higher returns to investors. As the intensity of flights and postal services increases, the revenues increase. It is a variable that increases the possibility for future earnings and investor’s confidence. An interesting development is the increase in the numbers of projects related to energy for the nation. That’s why I find this stock as a good representation of the possibility for profit. But I did not rely only on that as I decided to financially analyze the company’s performance for the past 5 years. So, to combine the increase in business activity for the state of Alaska with the company’s financial performance, I gave consideration to the steady increase of EPS from 2004 to 2008. The $2.7 EPS for 2004 and $3.6EPS for 2008 represents a total of 34% increase for the period or an 8.6% average increase for each year. Cash flow from operation is positive. The stock carries a beta of 0.39 so it indicates higher risk for my portfolio as compared to the market risk. This is my strategy to achieve short-term capital gains as I do not expect it to come from more stable companies.