MU finance team wins first round of CFA challenge
The team of MU students is ranked among the top 40 in the nation.
Feb. 01, 2013
An MU finance team won the first round in the Chartered Financial Analyst Institute Research Challenge, a competition in which teams of college students work with local, publicly traded companies to research and prepare a company analysis report.
The MU students placed in the top five teams in the annual local, regional and global competition hosted by the CFA Institute. The institute is a company of investment professionals that champions ethical behavior in investment markets, according to the CFA Institute website.
The annual challenge began six years ago and, in 2012, involved more than 3,000 students from more than 650 universities in multiple countries, according to the CFA Institute website.
MU’s finance team, made up of MBA students Brooke Donley, Aamer Trambu, Mark French, Thomas Schmidt and senior Tyler Huez, started competing in September.
“We had a diverse group,” Schmidt said. “Everyone had their specialties in different aspects of the report, and it helped leverage the team to have a very comprehensive final product.”
Led by Schmidt and mentored by assistant professor Michael O’Doherty, the team was assigned the Kansas City-based company Cerner, which specializes in healthcare software. Team members used in-depth analysis to evaluate the company based on factors such as stock performance, debt and profitability, Schmidt said.
Using that information, the team put together a 10-page report that evaluates the company on how it will perform in the next five years. They will present the report in front of a panel of judges Feb. 9 at the regional finals.
The presentation is graded on several criteria, including how well the team answered questions, the team’s poise and the quality of the team’s argument, according to the CFA Institute Research Challenge presentation scoringsheet.
The written report makes up 50 percent of the team's score, and the remaining 50 percent is based on the 10-minute presentation, Schmidt said.
“Some of the challenges were to understand what products they made and the future of those products," Schmidt said. “Cerner is part of a dynamic industry that has a lot of government regulation and investments such as subsidies. We had to break down how government investments can change the company for years to come."
The team was formed mostly by recruitment, Schmidt said. Most of the members attended the same investment-fund class together and teamed up from there.
“We were looking for students who had prior exposure to equity analysis and investments,” O’Doherty said. “To be successful in the competition, team members would need to be able to analyze company financial statements and filings and construct sophisticated valuation models.”
The team will compete against four other universities from the Kansas City area at the regionals, Schmidt said. A win in Kansas City would allow them to advance to the national round in Toronto. If the team advances further, it will travel to London for the international final.
Schmidt said the competition was a good experience for the team.
“I felt it was a good opportunity to work with a strong team,” he said. “We put ourselves in a tough situation and we had to work through as a group.”
Last year, the team placed first in the St. Louis regional round and represented MU in New York City in the national round. MU finished among the top 40 teams in the nation.
O’Doherty said the competition provided the students with a hands-on experience.
“Its hugely valuable for the students," O’Doherty said. “It allows students to network with members of the local CFA Society in Kansas City. These contacts should be helpful down the road. By researching Cerner, students also gained some familiarity with a local business and the research methods used by professional analysts.”