Hennessy Focus Fund Inv Cl · NASDAQ:HFCSX
Hennessy Focus Fund Inv Cl — Hennessy Funds — Investor Presentation (October 2006)
21 slides from Hennessy Focus Fund Inv Cl's investor presentation, October 2006
Slide 1: Hennessy Funds: Formulas for Smart Investing
Hennessy Funds Formulas for Smart Investing
Slide 2: Disclosure
Disclosure Mutual fund investing involves risk; loss of principal is possible. The Cornerstone Growth Fund (Series I & II) and Focus 30 Fund may invest in small and medium-capitalization companies, which tend to have limited liquidity and greater price volatility than large-capitalization companies.
Slide 3: Who is Hennessy Funds?
Who is Hennessy Funds? • Mutual fund management since 1996. • Family of six formula-based, no-load mutual funds. • Mutual fund assets of over $2 billion as of 09/30/06 • Over 130,000 investors nationwide.
Slide 4: Hennessy Investment Philosophy
Hennessy Investment Philosophy Our investment formulas are smart, yet straightforward • The Hennessy Funds are built on time-tested stock selection strategies. • We use sound, proven criteria such as price to sales ratio, dividend yield and stock price appreciation to select stocks. We manage ou
Slide 5: Hennessy Investment Philosophy
Hennessy Investment Philosophy We take a long-term approach to investing • We believe the key to success is implementing sound investment strategies, buying quality stocks and sticking with them. • We don’t try to outsmart or time the market because that doesn’t work. Our funds are managed in th
Slide 6: The Hennessy Funds
The Hennessy Funds The six Hennessy Funds satisfy a wide range of investment objectives and risk tolerance levels Aggressive • Hennessy Cornerstone Growth Fund (HFCGX) – small-cap blend • Hennessy Cornerstone Growth Fund Series II (HENLX) – small-cap ↕ blend • Hennessy Focus 30 Fund (HFTFX) – mid-ca
Slide 7: The Hennessy Cornerstone Growth Fund: Formula
The Hennessy Cornerstone Growth Fund Cornerstone Growth Fund Formula: 1. Compustat database of stocks with market cap over $175MM 2. Price-to-sales ratio below 1.5 - This value criteria helps to uncover relative bargains. - Sales figures are more difficult for companies to manipulate than earnings a
Slide 8: Cornerstone Growth Fund: Sector Exposure
The Hennessy Cornerstone Growth Fund Sector Exposure • Stocks are selected by formula without special attention to sectors. • No more than 25% of the fund’s assets will be invested in a single SIC code. • Since 2000, the largest exposure to a single sector was 18%, at time of stock selection.
Slide 9: Cornerstone Growth Fund: Market Cap Exposure
The Hennessy Cornerstone Growth Fund Market Cap Exposure • The Cornerstone Growth formula screens for companies with a market cap above $175 million. • The formula does not have an upper limit on market cap, however, in the past five years, an average of 4%, and a maximum of 10%, of the portfolio ha
Slide 10: Cornerstone Growth Fund: Foreign Exposure
The Hennessy Cornerstone Growth Fund Foreign Exposure • The Cornerstone Growth formula allows for foreign securities traded in the US (ADRs), provided company data can be verified by multiple sources. • In the past five years, an average of 3%, and a maximum of 8%, of the portfolio has been invested
Slide 11: Cornerstone Growth Fund: Cash/Temporary Investments
The Hennessy Cornerstone Growth Fund Cash/Temporary Investments • The fund’s goal is to be fully invested in the market at all times. • The fund will hold no more than 5% in cash. • On average, having 2-3% of the portfolio in cash has met shareholder redemption needs.
Slide 12: Cornerstone Growth Fund: Sell Criteria
The Hennessy Cornerstone Growth Fund Sell Criteria • The fund is rebalanced once annually, and will not sell stocks within the year, with the following exceptions: • To satisfy redemption needs • In the event of a merger or acquisition • Should earnings or other information that form the basis for s
Slide 13: Cornerstone Growth Fund Organization
The Hennessy Cornerstone Growth Fund Organization The Hennessy Mutual Funds, Inc. Neil Hennessy, Director & President Dennis DeSousa, Independent Director Robert Doyle, Independent Director Gerald Richardson, Independent Director Hennessy Advisors, Inc. KPMG Investment Manager Independent Auditors F
Slide 14: Hennessy Advisors Organization
Hennessy Advisors Organization Hennessy Advisors, Inc. Directors: Neil Hennessy, Rodger Offenbach, Brian Hennessy, Tom Seavey, Dan Libarle, Henry Hansel, Chuck Bennett, Teresa Nilsen, Dan Steadman President & CEO Neil Hennessy Chief Portfolio Business Chief Financial Compliance Management Developmen
Slide 15: Shareholders (as of 9/30/06)
Hennessy Cornerstone Growth Fund Shareholders (as of 9/30/06) • The fund has over 72,000 shareholders. • Retail clients make up approximately 65% of the assets of the fund, while investment advisors account for 35%. • The fund can be purchased only by US citizens. - US citizens living abroad account
Slide 16: Performance (as of September 30, 2006)
Hennessy Cornerstone Growth Fund Performance (as of September 30, 2006) Fund Inception is 11/1/1996 3 Year 5 Year Since Inception YTD 1 year Annualized Annualized (11/1/96) Annualized Hennessy Cornerstone Growth Fund -0.57% -1.12% 13.40% 14.92% 15.19% Russell 2000 Index 8.69% 9.92% 15.48% 13.78% 9.3
Slide 17: Performance (as of September 30, 2006)
Hennessy Cornerstone Growth Fund Performance (as of September 30, 2006) • Since inception (11/1/96), the fund has returned 15.19% annually versus 9.34% for the Russell 2000 and 8.39% for the S&P 500. Since Inception 3 Year 5 Year (11/1/96) YTD 1 year Annualized Annualized Annualized 18.00% 16.00% 14
Slide 18: Performance (as of year end December 31, 2005)
Hennessy Cornerstone Growth Fund Performance (as of year end December 31, 2005) • Since inception (11/1/96) the Cornerstone Growth Fund has had just one down year. • In 2002 the fund was down just 4.71% when the S&P 500 lost 22.09% and the Russell 2000 lost 20.48%. 1997 1998 1999 2000 2001 2002 2003
Slide 19: Late Trading & Market Timing
Late Trading & Market Timing Late Trading • All orders are time stamped. • Orders received before the market close receive that day’s price. • Orders received post close receive the next day’s price. Frequent Trading (Market Timing) • A redemption fee of 1.5% applies to all non-qualified account red
Slide 20: Corporate Governance
Corporate Governance • 75% of the Directors are independent. • Board recently completed its second “annual self- assessment” during its September 2006 meeting. • Board is fully aware of its powers to hold independent meetings and to hire independent counsel or other staff. - To date, the board has h
Slide 21: Regulatory Review
Regulatory Review • The firm participated in a Securities and Exchange Commission “sweep” audit in 2004. • The audit solicited personal securities trading, market timing, and other transaction related information. • The firm received a letter of completion from the SEC in March of 2005. – The letter
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