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Ascendere Associates LLC

Innovative Long/Short Equity Research

Model Portfolio Monthly Update: November 30, 2014


There are limitations inherent in our theoretical model results, particularly with the fact that such results do not represent actual trading and
they may not reflect the impact material economic and market factors might have had on our decision making if we were actually managing
client money. Please see additional disclaimers and disclosures at the back of this report.
We highlight stocks that demonstrate solid growth at a reasonable price (GARP). Stocks selected for our model portfolio strategies all rank highly
for the following metrics, with an emphasis on proxies for cash flow growth and ROIC:

Relative Value
Operating Momentum
Analyst Revision Momentum
Fundamental Quality

Page 2 contains rebalancing actions for our long-only model portfolio.


Page 3 contains rebalancing actions for our short-only model portfolio.
Target and stop prices, as well as updated return data, to be provided in our daily reports that will follow.

Ascendere Associates LLC


J. Stephen Castellano

Page 1

November 30, 2014


steve@ascenderellc.com

Long Model Portfolio -- Rebalancing Actions

11/30/2014 Rebalancing
Core and Opportunistic Long Portfolio:
23 stocks in the model portfolio = 4.35% weight per position

Close Position
GameStop Corp.
GME
Marriott International, Inc.
MAR
Gentex Corp.
GNTX
Progressive Corp.
PGR
PrivateBancorp, Inc.
PVTD
Huntington Ingalls Industries, Inc. HII
Dover Corporation
DOV
AU Optronics Corp.
AUO
MasterCard Incorporated
MA

Ascendere Associates LLC


J. Stephen Castellano

Hold/Rebalance
Pilgrim's Pride Corporation
PPC
FMC Technologies, Inc.
FTI
SunTrust Banks, Inc.
STI
VCA Inc.
WOOF
Robert Half International Inc. RHI
Kirby Corporation
KEX
Micron Technology, Inc.
MU
MAXIMUS, Inc.
MMS
RF Micro Devices Inc.
RFMD
Manhattan Associates, Inc.
MANH
Brocade Communications Systems,
BRCDInc.
Texas Instruments Inc.
TXN
Flextronics International Ltd. FLEX
TE Connectivity Ltd.
TEL
Anixter International Inc.
AXE
F5 Networks, Inc.
FFIV
Skyworks Solutions Inc.
SWKS

Page 2

Open Position
Cablevision Systems Corporation
Synchrony Financial
StanCorp Financial Group Inc.
Southwest Airlines Co.
CDW Corporation
Lam Research Corporation

CVC
SYF
SFG
LUV
CDW
LRCX

Source: Ascendere Associates LLC

November 30, 2014


steve@ascenderellc.com

Short Model Portfolio -- Rebalancing Actions


When the market anticipates an improving economy from low price levels, low-quality stocks will at times out-perform high-quality stocks as the
expected improvements in fundamentals are discounted from a relatively more depressed price level.

11/30/2014 Rebalancing
Core and Opportunistic Short Portfolio:
19 stocks in the model portfolio = 5.26% weight per position

Close Position
Pioneer Natural Resources Co. PXD
Gulfport Energy Corp.
GPOR
Qiagen NV
QGEN
Vertex Pharmaceuticals Incorporated
VRTX
Kennametal Inc.
KMT
Eaton Corporation plc
ETN
KBR, Inc.
KBR
Belden Inc.
BDC
The Ultimate Software Group, Inc.ULTI
SunEdison, Inc.
SUNE
Sprint Corporation
S

Hold/Rebalance
General Motors Company
GM
Golar LNG Ltd.
GLNG
Memorial Resource Development
MRD
Corp.
ING Groep N.V.
INZ
3D Systems Corporation
DDD
Qlik Technologies, Inc.
QLIK
CRH plc
CRH
The Mosaic Company
MOS
Carpenter Technology Corp.
CRS
Allegheny Technologies Inc.
ATI

Open Short Sale


The Priceline Group Inc.
TripAdvisor Inc.
Dish Network Corp.
Phillips 66
Credit Suisse Group AG
Salix Pharmaceuticals Ltd.
SINA Corporation
Axiall Corporation
Agrium Inc.

PCLN
TRIP
DISH
PSX
CS
SLXP
SINA
AXLL
AGU

Source: Ascendere Associates LLC

Return Data
Ascendere Associates LLC
J. Stephen Castellano

Page 3

November 30, 2014


steve@ascenderellc.com

Core & Opportunistic Long Model

Theoretical Longs
MTD
Stopped Out on 8/4/2011 close for a -12.33% loss

10/31/2014 to 11/28/2014
Sector
Information Technology
Consumer Staples
Information Technology
Information Technology
Information Technology
Consumer Discretionary
Information Technology
Information Technology
Information Technology
Information Technology
Information Technology
Consumer Discretionary
Health Care
Industrials
Information Technology
Financials
Industrials
Information Technology
Financials
Information Technology
Information Technology
Financials
Industrials
Consumer Discretionary
Industrials
Energy

Ascendere Associates LLC


J. Stephen Castellano

Company
Skyworks Solutions Inc.
Pilgrim's Pride Corporation
RF Micro Devices Inc.
Texas Instruments Inc.
Micron Technology Inc.
Gentex Corp.
MAXIMUS Inc.
Brocade Communications Systems,
F5 Networks Inc.
Tyco Electronics, Ltd.
Mastercard Incorporated
Marriott International Inc.
VCA Antech Inc.
Robert Half International Inc.
Flextronics International Ltd.
Progressive Corp.
Huntington Ingalls Industries, Inc.
Anixter International Inc.
SunTrust Banks Inc.
AU Optronics Corp.
Manhattan Associates, Inc.
Privatebancorp Inc.
Dover Corp.
GameStop Corp.
Kirby Corp.
FMC Technologies, Inc.

Ticker

SWKS
PPC
RFMD
TXN
MU
GNTX
MMS
Inc.
BRCD
FFIV
TEL
MA
MAR
WOOF
RHI
FLEX
PGR
HII
AXE
STI
AUO
MANH
PVTB
DOV
GME
KEX
FTI

10/31/2014
58.24
28.41
13.01
49.66
33.09
32.74
48.46
10.73
122.98
61.13
83.75
75.75
45.57
54.78
10.72
26.41
105.82
85.17
39.14
4.79
40.11
32.32
79.44
42.76
110.58
56.04

Page 4

11/28/2014
67.47
32.30
14.61
54.42
35.95
35.56
52.39
11.31
129.19
64.20
87.29
78.79
47.33
56.79
11.09
27.24
108.97
86.90
39.29
4.74
39.56
31.45
76.99
37.81
96.14
47.77

Performance
15.85%
13.69%
12.30%
9.59%
8.64%
8.61%
8.11%
5.41%
5.05%
5.02%
4.23%
4.01%
3.86%
3.67%
3.45%
3.14%
2.98%
2.03%
0.38%
-1.04%
-1.37%
-2.69%
-3.08%
-11.58%
-13.06%
-14.76%

Target/
Stop Date

Date+1
Sell Price

Return

November 30, 2014


steve@ascenderellc.com

Core & Opportunistic Short Model

Theoretical
MTD shorts hit target 8/4/2011 for 14.84% gain

10/31/2014 to 11/28/2014
Sector
Energy
Energy
Energy
Telecommunication Services
Industrials
Information Technology
Energy
Industrials
Information Technology
Industrials
Materials
Financials
Health Care
Materials
Industrials
Materials
Materials
Health Care
Consumer Discretionary
Information Technology
Information Technology

Ascendere Associates LLC


J. Stephen Castellano

Company
Ticker
Golar LNG Ltd.
GLNG
Pioneer Natural Resources Co.
PXD
Memorial Resource Development Corp.
MRD
Sprint Nextel Corp.
S
KBR, Inc.
KBR
3D Systems Corp.
DDD
Gulfport Energy Corp.
GPOR
Kennametal Inc.
KMT
Ultimate Software Group Inc.
ULTI
Eaton Corp.
ETN
Carpenter Technology Corp.
CRS
ING Groep NV
ING
Qiagen NV
QGEN
Allegheny Technologies Inc.
ATI
Belden, Inc.
BDC
Mosaic Co.
MOS
CRH plc
CRH
Vertex Pharmaceuticals Inc.
VRTX
General Motors Company
GM
Qlik Technologies, Inc.
QLIK
SunEdison, Inc.
SUNE

10/31/2014
56.11
189.06
27.09
5.93
19.08
37.80
50.18
38.61
150.51
68.39
50.05
14.32
23.46
32.85
71.19
44.31
22.41
112.64
31.40
28.35
19.51

Page 5

11/28/2014
41.52
143.23
21.60
5.12
16.84
35.28
47.73
36.82
147.24
67.83
50.42
14.60
23.93
33.69
73.03
45.77
23.41
117.88
33.43
30.83
21.65

Performance
-26.00%
-24.24%
-20.27%
-13.66%
-11.74%
-6.67%
-4.88%
-4.64%
-2.17%
-0.82%
0.74%
1.96%
2.00%
2.56%
2.58%
3.29%
4.46%
4.65%
6.46%
8.75%
10.97%

Target/
Stop Date
11/28/2014
11/12/2014
11/12/2014
11/6/2014
11/28/2014

$
$
$
$
$

Date+1
Sell Price
41.52
165.17
22.72
4.72
16.84

Return
-26.00%
-12.64%
-16.13%
-20.40%
-11.74%

11/18/2014 $

47.60

7.42%

November 30, 2014


steve@ascenderellc.com

Theoretical Model Portfolio* 11/28/14


Simple Returns (No Compounding)
Stock Targets

MTD

YTD

Since
03/31/09

Sharpe

Core Model
Long
Short
Core Long/Short

-0.44%
0.12%
-0.56%

2.70%
-2.41%
5.12%

11.14%
-7.70%
18.84%

149.8%
78.3%
71.5%

1.04
0.61
0.70

Stock Targets and


Portfolio Targets

Opportunistic Model
Long
Short
Opportunistic Long/Short

-0.44%
0.00%
-0.44%

2.70%
-2.41%
5.12%

4.13%
-9.31%
13.44%

134.0%
28.2%
105.8%

1.21
0.18
1.15

Stock Targets and


Portfolio Targets

Opportunistic Model III


Long Stocks
Long Inverse ETF ^SH
Opportunistic Long/Short III

-0.44%
0.00%
-0.44%

2.70%
-1.30%
1.41%

4.13%
-11.65%
-7.51%

134.0%
-77.1%
56.9%

1.21
(1.06)
0.66

S&P 500 Index

-0.60%

2.43%

11.76%

103.08%

1.09

* Return figures are calculated using cumulative simple returns. This table represents returns of several theoretical portfolios that do not assume any costs. This table is not to
be construed as advertising for any investment service. Real portfolios that attempt to exactly replicate these theoretical strategies will generate lower returns relative to these
models due to slippage, transaction costs, tax expenses and other costs. There are limitations inherent in our theoretical results, particularly with the fact that such results do
not represent actual trading and they may not reflect the impact material economic and market factors might have had on our decision making if we were actually managing
client money. We do our best to provide accurate information, but do not guarantee this. Please see additional disclosures and disclaimers.

Ascendere Associates LLC


J. Stephen Castellano

Page 6

November 30, 2014


steve@ascenderellc.com

Ascendere Associates LLC


J. Stephen Castellano

Page 7

November 30, 2014


steve@ascenderellc.com

Ascendere Associates LLC


J. Stephen Castellano

Page 8

November 30, 2014


steve@ascenderellc.com

DISCLOSURES
Ascendere is in the business of providing equity research and related consulting services to investors and their advisors. The equity research it provides includes basic
quantitative model portfolios and more detailed fundamental research with respect to individual stocks. In addition, the firm manages stock portfolios for itself and clients.
Ascendere does not rate stocks on any scale, but does offer individual stock commentary and valuation opinions. With regard to Ascendere's portfolio strategies, "long" or
"high-quality" baskets should generally be considered buys, unless otherwise noted. Stocks in our "short" or "low-quality" baskets should generally be considered sells, unless
otherwise noted. While exceptions may occasionally occur, typically stocks in the high-quality basket are expected to outperform the S&P 500 over a month's time and stocks in
the low-quality basket are expected to underperform. A more relevant benchmark would comprise of all stocks and ADRs that trade on major U.S. stock exchanges with a
market cap above $2 billion.
Ascendere adheres to professional standards and abides by codes of ethics that put the interests of clients ahead of its own. The following are specific disclosures made by
Ascendere:
1) Ascendere may have a financial interest in the companies referred to in this report ("the Companies"). The research analyst covering the Companies and members
of the analyst's immediate family have a financial interest in one or more of the Companies.
2) Ascendere generates revenue from research subscription revenue and portfolio management fees. At any given time it may be long or short any of the Companies.
3) Ascendere does not make a market in the securities of any of the Companies.
4) Ascendere has not received compensation from the Companies.
5) Ascendere has not managed or co-managed a public offering for any of the Companies.
6) Neither Ascendere nor any of its officers or any family member of the covering analyst serve as an officer, director or advisory board member of any of the
Companies.
7) Neither Ascendere nor any of its officers or any family member of the covering analyst beneficially own 1% or more of any class of securities of any of the Companies.

DISCLAIMERS
This report is intended for informational purposes only and does not constitute a recommendation, or an offer, to buy or sell any securities or related financial instruments. The
report is not intended to be in furtherance of the specific investment objectives, financial situation, or particular needs of any individual recipient. Investment decisions should
be based on an individual's own goals, time horizon and tolerance for risk. The information contained herein accurately reflects the opinion of Ascendere at the time the report
was released. The opinions of Ascendere are subject to change at any time without notice and without obligation or notification. The officers, affiliates or family members of
Ascendere Associates may hold positions in the securities of the Companies. No warranty is made as to the accuracy of the information contained herein. The views and
opinions expressed in the market commentary reflect the opinions of the author and may be based upon information obtained from third-party sources believed to be reliable
but not guaranteed. These opinions are subject to change at any time based upon market or other conditions. Ascendere disclaims any responsibility to update such views.
This information is intended for the sole use of clients of Ascendere. Any other use, distribution or reproduction is strictly prohibited. Investing in stocks includes a high degree
of risk, including the risk of total loss. This is for informational purposes only and is not intended to constitute a current or past recommendation, investment advice of any kind,
or a solicitation of an offer to buy or sell any securities or investment services. All information, opinions and estimates are current as of original distribution by author and are
subject to change at any time without notice. Any companies, securities and/or markets referenced are solely for illustrative purposes. Past performance is not indicative of
future performance, and no representation or warranty, express or implied, is made regarding future performance.
For Investment Professional use only. NOT FOR FURTHER DISTRIBUTION. Any dissemination or copying of this commentary is strictly prohibited.

Ascendere Associates LLC


J. Stephen Castellano

Page 9

November 30, 2014


steve@ascenderellc.com

J. Stephen Castellano founded Ascendere Associates LLC to provide innovative equity research
and investment advisory services that blends fundamental and quantitative approaches.
In general, our approach is quite simple -- we believe that return on invested capital and long-term
earnings growth are key to stock valuation. More specifically, we use powerful and unique financial
models that combine publicly available data, consensus estimates and our own inputs to generate
consistent and actionable stock recommendations.
Among the services that Ascendere provides are: 1) detailed custom equity research analysis; 2) valuation scenario analysis
studies; 3) supply /demand studies; 4) long and short stock idea generation; 5) portfolio feedback; 6) detailed fundamental
financial modeling services; and 7) additional analytical consulting services. Additional information is available at
www.ascenderellc.com.
Mr. Castellano has over 15 years of experience in equity research and related consulting work. At PaineWebber, Warburg
Dillon Read and Credit Lyonnais Securities he developed fundamental equity valuation models and conducted in-depth
research on the steel and telecom services industries. At Boston Private Value Investors, he developed quantitative models
for stock idea generation and also provided general fundamental equity research coverage. Steve received a MBA from the F.
W. Olin School of Business at Babson College (2005) and a BA from Oberlin College (1993).
Mr. Castellano's career history is highlighted below:

Startup Ecommerce Company (2013-Present)


Ascendere Associates, LLC (2009-Present)
Boston Private Value Investors , Equity Research, Equity Research Analyst (2005-2009)
Pyramid Research, Contract Consultant, Telecom Services (2002-2003)
Credit Lyonnais Securities (USA), Equity Research, Telecom Services, Vice President (2000-2001)
Warburg Dillon Read, Equity Research, Telecom Services, Research Associate (1999-2000)
PaineWebber, Equity Research, Steel and Nonferrous Metals, Research Associate, Editor (1995-1999)

Ascendere Associates LLC


J. Stephen Castellano

Page 10

November 30, 2014


steve@ascenderellc.com

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