Investment Thesis, Industry Competitive Advantage, & Investment Risks Sections Seminar

1. Investment Thesis, Industry Competitive Advantage, & Investment Risks Sections Seminar October 13, 2009

2. TSTY – Key Issue #1 • Investment Thesis: • Three valuation methods indicate TSTY is significantly overvalued. • Investment Risk: • TSTY could be acquired at a premium price by a larger more efficient manufacturer, a private equity firm, or a hedge fund for strategic reasons. • However, the lack of brand equity makes TSTY an unattractive acquisition target.

3. TSTY – Key Issue #2 • Investment Thesis: • TSTY has limited long-term growth potential. • Poor market outlook for non-nutritious bakery goods among increasingly health-conscious consumers. • TSTY cannot generate sufficient cash to finance its Strategic Growth Initiative. • Investment Risk: • TSTY might experience a highly successful marketing campaign. • TSTY might develop new products which appeal to new trends in consumer tastes. • TSTY could uncover new ways to enhance productivity • However, achieving these benefits and implementing these changes may take several years.

4. TSTY – Key Issue #3 • Investment Thesis: • TSTY is in a cash-poor financial condition • Gross profit margins far below peers. • TSTY operates in a very competitive and mature industry forecasted to experience low growth during the next 5 years. • Positive cash flows from operations are being offset by negative cash flows from investing and financing.. • Investment Risk: • The stock market is inefficient and some investors find TSTY’s low relative valuation attractive. • However, the catalysts required to drive the price of the stock higher over the next 12 months will not be present.

5. TSTY – Key Issues #4 & #5 • Investment Thesis #4: • The rising health consciousness of consumers is a major challenge facing TSTY and its industry. • Random sample of over 3000 consumers in TSTY’s core distribution area found that 76.5% of them classified the company’s products as “junk”. • A face-to-face interview with a long-time independent sales distributor confirmed TSTY’s brand equity problems and demand challenges • Investment Thesis #4 : • The occupiers of the top four positions in the company own only a minimum number of shares and thus the interests of top management may conflict with those of TSTY’s shareholders.

6. SYM – Key Issue #1 • Investment Thesis: • SYM’s should be valued as a soon to be liquidated REIT rather than as a retailer. • Stock performance has been more correlated with a real estate index than with its closest retail competitors. • Investment Risk: • Family control makes liquidation catalyst indeterminable. • However, if liquidation is deferred there is a low downside risk of 3.71% annually over the next 5 years. • Real estate market could correct. • However, the fundamental value of the real estate provides a downside floor. • Control shareholders could take the company private • However, this is unlikely because of the appreciation that has occurred in the price of SYM’s shares and the large amount of debt that would have to be assumed.

7. SYM – Key Issue #2 & #3 • Investment Thesis #2: • The sale of the Dallas store suggests liquidation. • The store was profitable. • SYM’s was made an enticing offer which was confirmed by the CFO • Investment Thesis #3: • There is hedge fund interest in SYM’s • Dimensional Advisors recently purchased 8.34% of outstanding shares.

8. WPC • Investment Thesis #1: • Buy recommendation supported by valuation approaches. • Investment Thesis #2: • WPC has stable sources of income • Investment Thesis #3: • WPC has maintained their conservative borrowing standards. • Investment Thesis #4: • WPC management’s impeccable track record will help the company navigate the challenging credit markets that currently exist.

9. WPC • Investment Risk #1: • WPC’s investment team not so independent. • However, WPC has achieved high returns with this structure. • Investment Risk #2: • Investors in WPC managed REIT’s experience a 10% haircut. • However, WPC REIT’s have been successfully sold in the past. • Investment Risk #3: • Performance fees now based on operating cash flows rather than assets under management. • However, long-term leases usually experience highly stable cash flows. • Investment Risk #4: • WPC may have trouble raising capital for its CPA17 REIT and maintaining historic returns. • Default risk is substantial risk to WPC’s revenues and asset values. • However, analysis revealed an average risk of BBB on directly owned leased properties and an average risk of BB+ in the REIT’s managed by WPC.

10. PVH • Investment Thesis #1 • PVH is cheap • Investment Thesis #2 • International licensing will continue to be the driver for the company • Investment Thesis #3 • PVH’s retail and wholesale businesses will not hurt them that much in the current business downturn • Investment Thesis #4 • PVH has a strong balance sheet and cash position

11. PVH • Investment Risk #1 • Major retailers/licensees bankruptcy and/or consolidation • However, consolidation will improve the efficiency of the industry and not reduce in the long run the number of retail doors and PVH can find replacement licensee partners • Investment Risk #2 • Extended recession – PVH will be negatively impacted • Investment Risk #3 • International licensing revenue grows slower than expected • However, business interests of licensees are aligned with PVH which will mitigate this risk • Investment Risk #4 • Currency translation loss • However, PVH’s diversified portfolio of licensees will mitigate this risk. • Investment Risk #5 • Larger wholesale discounts and returns than expected • However, don’t worry because tested in scenario analysis.