Starbucks 401k Plan PSDS Scan 12-31-2010

The Starbucks 401k Plan does not include company stock SBUX and there is no SEC 11-k report required. Although Starbucks is a great company it's stock is very volatile.The 5yr average return of SBUX from 2006 to 2010 was 21.3% but the annualized 5yr return for that period was only 1.6% because of volatility. SBUX could be a poster child in a campaign to alert employees everywhere that volatility kills compounding and it is precisley the annualized return that is in your bank account not the average return.

The Starbucks 401k Plan Balanced portfolio has a 5yr annualized return APR = 4.25% with a positive Sharpe ratio of 0.92.  Its 2 largest holdings are the money market fund TCMXX (45.6%) and the bond fund DODIX ( 41.2%).  The Plan equity options need help and others have pointed that out as well. My suggestion would be a few funds like PRPFX and there are several worth a look.

H&R Block 401k (RSP) Plan PSDS Scan 12-31-2010

The H&R Block 401k plan has not been helped by company stock HRB for a long time. The stock has a 5yr APR = -10.77% and is not in the Balanced portfolio which has a 5yr APR = 5.35% with a Sharpe ratio of 1.84. The employee portfolio's largest holding is DODGX and that fund has not done well the last 5 years either. The 401k plan has several good investment options including a very good bond fund PTTRX. Employees near retirement may want to take a closer look at their individual portfolio.

PPL Corp. 401k (ESOP) Plan PSDS Scan 12-31-2010

The PPL Corp. is classified by Morningstar as a diversified utility and pays a dividend that is currently over 5%. About the only thing I have in common with Warren Buffett is neither one of us can make sense of how utility companies keep their books. The PPL Corp. 401k (ESOP) plan design scan is bipolar with the employees investing 98.8% of their money in company stock PPL (all ESOP) while the Balanced portfolio invested nothing in the stock which has a negative 5yr Sharpe ratio (all 401k). The Balanced portfolio invested in 13 of the Plan's other investment options in the scan. Morningstar company stock PPL total return data was used in the scan. A good plan but company stock performance is confusing at least to me.

Martin Marietta Materials 401k Plan PSDS Scan 12-31-2010

The Martin Marietta Materials 401k was helped a little by company stock MLM but the Balanced portfolio invested only 3% of the portfolio in the stock. That portfolio's top 3 holdings are the bond funds MBFIX, SSTBX and STLAX which is a retirement income fund. The plan has better income investment options than equity options. It is a small plan and pretty conservative.

Marriott International 401k (RSP) Plan PSDS Scan 12-31-2010

The Marriott International 401k plan Balanced portfolio 5yr performance improved a little over last year. Company stock MAR had a very good 2010 but the stock is so volatile the Balanced portfolio invested less than 1% in the stock. The employee portfolio invested 16.9% of that portfolio in the stock according to the SEC 11-k report. That report had little other information on employee asset allocation by individual investment option. The plan is conservative and has better fixed income options than equity options with a few exceptions. Northern Trust is the plan trustee.

Total Petrochemicals USA 401k Plan PSDS Scan 12-31-2010

The Total Petrochemicals USA 401k was not helped by company stock TOT this year after being down in 2010. The Balanced portfolio 5yr performance remains above average thanks to the bond funds PTTRX and VBMFX. The employee portfolio 5yr return is below average. They invested 38.6% of the portfolio in company stock and it is their largest holding. That is too much for a retiree in my opinion.

Owens-Illinois 401k (LTSP) Plan PSDS Scan 12-31-2010

The Owens-Illinois 401k (LTSP) plan for hourly U.S. employees was scanned last year. The mutual funds in the plan are all Harbor funds including Harbor Target Retirement Funds that did not yet have 5yr data and were not in last years scan. This year I used the asset allocation data for these funds to compute 5yr return data for HARAX, HARFX, HARJX, HARPX and HARYX for this years scan. These funds have high yields compared to other target date funds. The Balanced portfolio invested more in these funds than I usually see for target date retirement funds and the GIC, the bond fund HABDX and HARAX are the largest holdings of the Balanced portfolio. That portfolio improved over last year and has a 5yr APR = 5.20 with a Sharpe ratio of 2.28. I have no new data on the employee portfolio which invested 20% of that portfolio in company stock OI last year. The stock has a nice return but is very volatile. Keep in mind that volatility kills compounding. The 5yr average return for OI was 25% but the annualized 5yr return was only 7.85% the last 5 years.

Microsoft 401k (SP) Plan PSDS Scan 12-31-2010

The Microsoft 401k Balanced portfolio is still a lifeboat portfolio with the top 3 holdings all conservative income funds, PTTRX, VBISX and the money market fund FIDXX. The employee portfolio 3 largest holdings are all equities, company stock MSFT, FCNTX and FDGRX. Company stock was down in 2010. When the stock starts to grow again the employee portfolio could better the Balanced porftolio APR = 5.52% but not this year.

Tyco International 401k (RSIP) Plan PSDS Scan 12-31-2010

The Tyco International 401k for US employees is still a lifeboat portfolio. The top 3 holdings of the Balanced portfolio are the the corporate debt fund (FUNDF in the scan), the GIC and the interest bearing cash fund (SIGVX in the scan). The largest holding in the employee portfolio is FDGRX. Company stock TYC has had two good years in a row but not good enough the have a positive 5yr Sharpe ratio. There is not much more to say about this plan.

Hewlett-Packard 401k Plan PSDS Scan 12-31-2010

The Hewlett-Packard 401k Plan made an interesting change in 2010. The Target Date Retirment Funds were renamed to the corresponding Birth Date Fund for each participant. The Target Date Retirment Income Fund was transferred to the Target Date 2010 Fund and then renamed the 1945 Birth Date Fund. The Birth Date Funds are managed based on the year participants were born instead of an assumed retirement date. In the scan I included FFFAX while I try to sort this all out.

The 401k Plan was not helped as much this year by HPQ stock which did not have a good 2010. The Balanced portfolio invested only 1.1% of the portfolio in the stock and the employee portfolio invested 12.2% of that portfolio in the stock. This is a large complicated plan with several options that are not mutual funds.  ALL investment options are participant directed in this plan according to the SEC 11-k report. The Balanced portfolio has a 5yr APR = 5.71% with a very high Sharpe ratio of 2.56 thanks mostly to the GIC. All in all a good plan and stock with an interesting new way of thinking about target date retirement funds.

Cabot Oil & Gas 401k (SIP) Plan PSDS Scan 12-31-2010

The Cabot Oil & Gas 401k was helped by company stock COG and the Balanced portfolio invested 6.6% of the portfolio in the stock. The employee portfolio invested 22.3% in the stock and an equal amount in the money market fund FRTXX. This is a small plan with conservative options ( no emerging market, etc. ) that produced a 5yr APR = 4.93% with a positive Sharpe ratio of 0.75. All in all a good plan helped by a good but volatile company stock.

Shaw Group 401k Plan (hourly) PSDS Scan 12-31-2010

The Shaw Group 401k plan for hourly employees is about the same as their 401k plan I scanned last year. However, in this scan Fidelity Freedom funds were among the options with 5% or more of the plan, FFFFX (6.2%), FFTWX (9.3%) and FFTHX (9.3%). Their largest holding was the stable value fund FMIP2 (40.7%). I took a close look at what's in the 2025 fund FFTWX and found 23 Fidelity funds mostly "series" funds that are well diversified with a bond fund FSIGX the largest holding at 16.34%. I need to update my TechNote on target date funds which are getting better diversified and popular with many employees.

The Balanced portfolio invested very little in target date funds with the 3 largest holdings being the bond fund PTTRX (39.4%), the equity fund WHGMX (11.9%) and the stable value fund FMIP2 (11.3%). That portfolio has a 5yr APR = 6.59% with a Sharpe ratio of 1.30. As you can see in the 2D scan chart that return is better than the employee portfolio return with a less risk. Company stock is very volatile.

Allergan 401k (SIP) Plan PSDS Scan 12-31-2010

The Allergan 401k plan was not helped as much by company stock AGN as it was last year and the Balanced portfolio only invested 2.5% of the portfolio in the stock. It remains a lifeboat portfolio with 50% of the portfolio in the stable value fund. The employee portfolio has 26% of their money in company stock by far their largest holding. It has more than twice the risk and about the same return as the Balanced portfolio. This is not a bad plan but the equity investment options could use some help in my opinion.

J&J Snack Foods 401k (PSP) Plan PSDS Scan 12-31-2010

The J&J Snack Foods 401k was helped by company stock JJSF and the Balanced portfolio invested 7.4% of the portfolio in the stock. The employee portfolio invested 15.1% in the stock which had a 5yr APR = 11.24% with a Sharpe ratio of 0.387. However, their largest holding MAAGX at 22.8% of plan had a poor 5yr return and the Balanced portfolio invested only 1.4% in that fund. I mention that because sadly I often see plans where employees invest in fund names "aggressive growth" without checking fund performance. In the scan RFFI is the Reliance Fixed Fund Instituional trust. All in all a good plan and stock.

Caterpillar 401k Plan PSDS Scan 12-31-2010

The Caterpillar 401k plan has 9 core investment options, 4 model portfolio options and company stock CAT.The plan master trust also has a GIC that is not participant directed. The plan trustee is Northern Trust and I used their funds and Vanguard funds for the 9 core investment options. The 4 model portfolios are represented by Marshall & Isley asset allocation funds with 5yr market data.

Company stock  CAT
Core Investment Options
Large Cap Growth  BFGAX
Mid Cap Blend NOMIX
Large Cap Blend BEIAX
Large Cap Value NOLVX
Samll Cap Value NOSGX
High Yield Bonds VWEHX
Intermediate Term Bonds VBIIX
Foreign Large Blend  VLACX
Emerging Markets  VEIEX
Model Portfolio Funds
Conservative  M&I stable principal
Moderately Conservative  M&I moderate balanced
Moderately Aggressive  M&I growth balanced
Aggressive   M&I aggressive stock

The Balanced portfolio has a 5yr APR = 6.41% which is above average. It includes an investment of 8.7% of the portfolio in company stock which has done very well the last 5 years. I have no information on emplyee asset allocation other than the SEC 11-k which shows the plan having a large amount of company stock. All in all a good plan and a very good stock.

Time Warner Telecom 401k Plan PSDS Scan 12-31-2010

The Time Warner Telecom 401k plan does not have company stock TWTC as an investment option. It does have a large number of options and 22 of them are in the Balanced portfolio which has a 5yr APR = 5.71% with a Sharpe ratio of 1.51. I have no information on the employee portfolio and provided a Uniform portfolio in the scan for comparison purposes. A good plan with above average 5yr performance. My only comment is there are too many target date funds in the plan.

Analog Devices 401k (IPP) Plan PSDS Scan 12-31-2010

The Analog Devices 401k plan was not helped by company stock ADI and the Balanced portfolio has a modest 5yr APR = 4.60% with a Sharpe ratio of 1.0. The three largest holdings of that portfolio are FIDXX (26.3%) , FBIDX (20.2%) and VIPSX (8.7%). The employee portfolio invested 14.3% of their money in company stock. Their three largest holdings are the money market fund FIDXX (19.5%), company stock ADI (14.3%) and FDGRX (6.8%). An average plan with a little below average stock the last 5 years.