The School of Business at Portland State University recently celebrated a second-place finish in the Portland CFA Institute Research Challenge and advancement to the semifinals at the ACG Cup Northwest.
Supported by PSU finance professors Michael Dimond, Piman Limpaphayom and Tony Tursich, Master of Science in Finance (MSF) candidates Magali Davila Centeno, Tze Ken Teoh and Jose Bracho Zabala earned second-place honors in the Portland CFA Institute Research Challenge, an annual competition that supports students from around the world in financial analysis. Students work in teams to research and analyze a publicly traded company, and then present a research report with a recommendation to buy, sell or hold.
The CFA Institute Research Challenge brings together over 6,000 students from 1,000 different universities worldwide, in addition to over 150 CFA member societies and 4,000 member volunteers.
PSU’s team began to prepare early in the fall term, researching their assigned company, Schnitzer Steel Industries. According to Centeno, “The competition began by attending a luncheon to meet the other competing schools. We also attended an investor presentation at Schnitzer Steel’s headquarters downtown. During this presentation, we had the chance to ask questions about the company and industry to aid in our research and analysis.”
From there, the team met on a regular basis, utilizing the Bloomberg Finance Lab to support their research. Each team member took on a different part of the analysis and research. “As the competition approached, we met more often and had regular meetings with Professor Dimond every Friday morning to discuss our progress and any questions we had,” added Centeno. “We also met with Tony Tursich, who provided feedback on our written report and presentation.”
As a mentor to the team, Tursich provided feedback and suggestions and was there on the day of the competition to provide support. “My job was to provide a ‘real world’ industry perspective as the students’ work progressed and evolved into the final written report and presentation for the competition,” said Tursich.
In their report and presentation, the team recommended a sell position. Centeno said this was “based on various revenue risks we observed, including the effect of Coronavirus, emerging markets, imbalance of global supply and demand for recycled steel scrap and declining global steel scrap prices. Our target price at the time of the competition was $16.08.”
On March 6, MSF candidates Anna Mar, Anh Huynh, Thanh Nguyen and Andrew Clarkson competed at the ACG Cup Northwest. PSU Academic Director Daniel Wong and CFA Jake Shafer helped coach the team throughout the competition.
The ACG Cup is a case study competition where students tackle a real-world finance issue in a high-pressure setting. According to ACG Cup organizers, “After the teams analyze the case and agree upon a course of action, the students make presentations to a panel of judges comprised of successful corporate executives in the field of finance.”
The PSU team asked to analyze LaLuche, a Mediterranean restaurant chain. In the case, the team learned the company was adding plant-based protein to their menu and was experiencing challenges with internal management and leadership. Cliff Capital was attempting to buy LaLuche, but LaLuche leadership was considering the purchase of a small restaurant chain named Blue Moon to expand the business, leveraging the existing LaLuche supply chain.
According to Thanh Nguyen, the team’s recommendation was “to purchase Blue Moon with 40% equity and 60% debt. We will negotiate with Cliff Capital for the 40% equity fund.”
This was the fourth year of the competition, which includes both undergraduate and graduate students from universities across Oregon and Washington. This year, first place went to Seattle University.
“We all have an interest in finance, some of us want to go into corporate finance and others want to pursue security analysis,” said Centeno. “Competing in case competitions helps us work on teamwork and supports the learning outcomes and career goals of graduate business students, providing opportunities to practice tangible finance skills and work in a collaborative team.”