Guidelines for firm/stock/analyst reports

Each group will write up and present three analyst reports (due on three different dates) on individual firms/stocks. The first report is guided in the sense that we will gladly answer any questions/provide feedback on it beforehand if asked to do so.

The first step is to choose [eventually three] firms for analysis. First, create a pool of potential firms for analysis. This pool should include the following:

A. The firms in your industry (as we have defined your industry, using the GICS code) that are currently in the Praxis portfolio.

B. All firms in your industry that are at least $1.2 billion in market capitalization. This can include international firms traded in the US (possibly in American Depositary Receipt form).

You may wish to apply some cursory measures to the pool in order to filter to a manageable set of firms to consider. As some examples, you may wish to concentrate on firms with low market price/earnings (P/E) ratios, firms with low market price/book (P/B) ratios, or firms with low stock price volatility.

The firm for your first report must be a firm in your industry that is currently in the Praxis portfolio. The firms for your second and third reports can be either (i) a firm in your industry that is currently in the portfolio; or (ii) a firm in your industry outside the portfolio that seems (tentatively) attractive based on the criteria above (or some other criteria), and that you would (tentatively) like to consider for inclusion in the portfolio. (Note that, after you complete your analysis, and have learned more about the firm, you might change your mind, and your report might ultimately present a firm that you do not recommend for Praxis ownership.) To be considered for addition to the Praxis portfolio a firm must satisfy the two following conditions at the time of your analysis:

1. Market capitalization is at least $1.2 billion.

2. If the firm’s bonds are rated, the rating(s) must be of investment grade (S&P: BBB– or above; Moody’s: Baa3 or above).

(Note that we may sometimes have stocks in the portfolio of firms that no longer satisfy these criteria. We can keep those positions, but should not increase those positions. Therefore, firms for your second and third reports must either be a current Praxis holding, or satisfy both criteria 1 and 2 above!