Select Holdings

In addition to other securities, PCM has acquired long positions in the following which we believe are poised to significantly appreciate in value over a 10 year horizon:

Tyson Brands (TSN), Phillips 66 (PSX), Delta Airlines (DAL), Jetblue (JBLU)

TSN: Tyson presented an attractive purchase price after allegations of excessive pollution were discovered in a single operating plant. We believe sell-offs were unwarranted and have little to no impact on the long term health of the business. Tyson is the world’s leading chicken manufacturer and has one of the strongest intangible asset values through it’s brands in the food/beverage industry. Earnings growth has vastly outpaced price appreciation which leads us to believe TSN is significantly undervalued.

PSX: Oil price declines drove the entire O&G market capitalization down, however, PSX is heavily vested in downstream chemicals which have been thriving through the oil recession. With a trailing 5-Y P/E ratio of 13.7, PSX is available at a substantial discount to the O&G average 5-Y P/E of 35.1. Low free cash flow may have intimidated prospective investors, but this is exclusively from large capital expenditures for future projects. We believe PSX is undervalued and is a future-minded company that will expand their market share in the future.

DAL/JBLU:  The airline industry overall appears undervalued and JBLU presented a buy opportunity from short term sell-offs. JBLU has significant market exposure in the recently damaged areas of the Caribbean where they service flights. We believe DAL is an industry leader and is not threatened from the recent boom of Southwest Airlines. American and United, offering lower quality and extremely poor customer service ratings, lead us to believe they will eventually lose market share to competitors, particularly Southwest. JBLU boasts some of the highest customer satisfaction in the industry and offers higher quality service at a fraction of the price.