A four-student team from Niagara University claimed the silver medal at the CFA Investment Research Challenge, held Feb. 19, 2013, at Canisius College.
Seniors Peter Pane, Brandon Gallegos and Steven Boyle teamed with MBA student Ling Zhou to finish second out of nine colleges and universities in the annual competition, which assesses students on their writing and presentation of a stock research report.
The Niagara team will share a $500 prize, and has also been offered scholarships to complete the Chartered Financial Analyst (CFA) Level 1 Exam.
Ed Hutton, CFA, assistant professor and director of the Financial Services Laboratory at Niagara University, served as faculty advisor while Steven Gattuso, CFA, assistant professor, acted as the team’s industry mentor.
During this year’s competition, the student teams were required to analyze Computer Task Group (NASDAQ: CTGX), of Buffalo, N.Y. The research process began in October 2012, when CTG presented its financial results and discussed its business strategy during a luncheon attended by the student teams.
The Niagara team then spent two months conducting a thorough analysis of the company, including the construction of a sophisticated spreadsheet valuation model of the factors affecting the price of the stock. The team also had to evaluate current and projected macroeconomic factors, such as Gross Domestic Product (GDP), interest rates and capital spending. Due to the importance of emerging electronic medical records (EMR) to CTG’s business, the team also had to conduct an analysis of recent legislation requiring EMR adoption.
Altogether, the team estimates it spent over 400 hours in its research.
In January, the Niagara team submitted its written report, containing over 60 pages of financial calculations, to a panel of judges, all of whom were professional stock analysts or portfolio managers and CFAs. In their research report, the team had to recommend to buy, sell or hold on the stock of CTG, and forecast the stock price. The judges scoring of each report was sealed until the completion of the oral presentations.
In February, the Niagara team attended the Western New York Investment Research Conference. During the conference, the team heard a talk given by Dr. David Blitzer, chairman of the S&P 500 Index Committee, and several other academic and investment professionals. In addition, Hutton delivered a talk to the group titled Seven Myths Regarding the Equity Risk Premium.
After the speakers concluded, each university team had to present a summary of its stock research report to the 110 conference attendees and a panel of CFA judges before answering questions to defend its findings. The judges rated each team’s presentation style, format and delivery, and its ability to answer the questions.
The written report scores and the presentation scores were combined. At that point, Niagara and Canisius College were tied for first place, both teams having outscored SUNY Buffalo, Syracuse University, SUNY Geneseo, SUNY Brockport, SUNY Fredonia, St. Bonaventure University and SUNY Oswego.
The Niagara and Canisius teams were subsequently required to present their findings again to a combined judging panel, and answer another round of difficult questions in defense of their conclusions. Canisius ultimately finished just ahead of Niagara.
The competition was sponsored by the CFA Institute, an organization of over 100,000 members in 68 counties, as well as Standard & Poor’s, Morningstar, Zacks Investment Research, Citigroup, Manning and Napier, Nottingham Investment Advisors and Kaplan Schweser.
For more information, contact Hutton at 716.286.8208 or ude.aragainnull@nottuhe.