Students presenting their findings in front of a panel of seasoned professional money managers is stressful and pressure packed.
In spite of this pressure, the three teams reaching the finals of the Ben Graham Centre’s International MBA Stock Picking Competition all rose to the occasion, leaving judge, Jeff Stacey, “uplifted” by their talent.
In the first stage of the competition, 15 teams made up of MBA students from business schools from around the world, all prepared a valuation report on a company judged by a panel of industry practitioners. Teams from the Schulich School of Business (Canada), Barna Management School (Dominican Republic) and the Indian Institute of Management Ahmedabad - IIMA (India) reached the final round, set to compete against each other for $14,000 in prize money.
The student teams had a short time frame to prepare a detailed analysis on CNH Industrial, an international agriculture and construction equipment manufacturer. Their reports must include a buy, or don’t buy recommendation, and the teams are then judged on their analytical rigour, understanding of the industry, and their ability to defend their position.
After tense presentations and thoughtful deliberation, judges named the team from IIMA the winner, with Barna and Schulich finishing second, and third respectively.
Ivey’s George Athanassakos, competition host and Chair of the Ben Graham Centre for Value Investing, was impressed by all three teams, but IIMA’s approach truly stood out.
“My advice to professionals, especially those who are starting out, is to never start your analysis with spreadsheets and formulae,” said Athanassakos. “Instead, start with the qualitative analysis. Demonstrate you understand the company, the business, the management, the industry and the competitive situation. Once you get the qualitative stuff right, then you start putting in the formulae and the spreadsheets — not the other way around. This is exactly what the team from IIMA did.”
Splitting the top prize of $8,000 was IIMA’s Siddharth Matta, Raghvesh and Divyam Jain, all learning valuable lessons throughout the competitive process.
“During the course of the competition, we received valuable feedback at each stage, which helped us formulate our submissions for the subsequent stages,” commented Matta. “Understanding the business model is extremely important before diving deep into pricing or valuation. We spent lot of time on collecting insights from different sources, and triangulating them for checking purpose… Plus we found a lot of value is derived from good and able leadership.”
Getting their hands dirty, and talking to users of the company’s equipment helped their team to understand the CNHI’s value proposition. Finally, strong team work helped everything come together in the end.
“Having a belief in ourselves as teammates, and then being willing to challenge assumptions helped to get the best analysis and output,” said Raghvesh.
Judges for the competition included such distinguished value investors as Roger De Bree, Tweedy, Browne Company LLC; Wayne Peters, Peters MacGregor Capital Management; Curtis Jensen, Robotti & Company Advisors LLC.; Kim Shannon, Sionna Investment Managers; Jeff Stacey, Stacey Muirhead Capital Management; and Evan Vanderveer, Vanshap Capital.
