Essay About Principal Financial Group And Average Risk Tolerance

Investment
Based on our IPS on above average risk tolerance we decided to focus on stocks with high Beta values which rewarded excess risk with excess returns. We first decided to focus on Textron, an aerospace and Defense Company. Textron was chosen because of the companies they have acquired recently including TUG Technology, Beach Holdings, LLC, and ProFlight LLC which a leading advanced pilot training service provider. The acquisition of Beech Holding’s is expected to contribute $1.5 billion dollars to the company’s 2014 revenue. Their strategic acquisition will allow the company to leverage its existing distribution network to gain market share and realize synergies. We still remain conscious though due to the ongoing U.S. budget deficits and political uncertainty.         Another company we looked at to include in our portfolio was the Principal Financial Group. We felt that including this company in our portfolio matched our risk assessment we stated in our IPS. Principal Financial reported higher second quarter results compared to Zacks Equity Research. The outperformance was seen because of the deeper focus on fee based business along with improved investment income. In fact, Principal Financial has posted positive surprises the past four quarters. Their heightened focus on fee based revenue sources has been helping shareholders return more value and deploy growth initiatives. Principal Financial envisions $1 trillion in assets under management in the next five to seven years on the strength of various growth drivers and leadership position. We feel that between the consistent growth and above average earnings we’ve seen along with the accompanying risk that goes along with investing in Principal Financial, Principal Financial was an appropriate security to include in our portfolio.