Global Investment Research Challenge Where opportunity favors the - - PowerPoint PPT Presentation

Global Investment Research Challenge

Where opportunity favors the prepared mind…

Kickoff Meeting – Academic Year 2010-2011

2010 Champions University of the Philippines

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What is it?

• Intercollegiate Competition between

teams of 3-5 students each

• Students compete on:
• 1. Sell-Side Research Report of a

publicly traded company

• 2. Professional presentation to an

expert panel of judges

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The purpose

Teach best and ethical practices in equity research through a real-world experience to the next generation of investment professionals

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Hosts

Sponsored By:

• CFA Institute

www.cfainstitute.org

Hosted By:

• CFA Vancouver

www.cfavancouver.com

In Collaboration With:

• CFA Victoria

www.cfavictoria.com

• Okanagan CFA Society

www.membersocieties.org/okanagancariboo/

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Key Components

Mentoring by academic & industry professional Interview company management Write a sell side equity research report Present to a panel of expert judges Perform corporate analysis

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Global IRC Network

Americas + New York:

• 30 Challenges
• 200 Universities

Asia Pacific:

• 16 Challenges
• 140 Universities

EMEA:

• 14 Challenges
• 90 Universities

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2010 Winners’ Progression Diagram

59 LOCAL SOCIETY INVESTMENT RESEARCH CHALLENGES

16 teams

Asia Pacific Regional Challenge

14 teams

EMEA Regional Challenge

29 teams

Americas Regional Challenge

16 teams

New York Regional Challenge

Global Investment Research Challenge

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Asia Pacific

• The Chinese University
• f Hong Kong
• Fudan University
• Monash University
• Singapore Management University
• Institute of Business Administration of Pakistan
• Shanghai Jiaotong University
• University of the Philippines

Europe, Middle East & Africa

• Aalto (Helsinki) School of Economics
• Bocconi University
• Trinity College Dublin
• ESSEC , Paris
• University of Edinburgh
• London Business School
• Rotterdam School of Management
• University Gottenburg
• University of Cape Town
• Wroclaw University

Americas

• Boston University
• Brigham Young University
• Columbia Business School
• Faculdade de Economia – Brazil
• Fordham University
• Harvard University
• MIT
• NYU Stern School of Business
• University of Washington
• Rice University
• University of Arizona
• University of Virginia
• University of Southern California
• Yale University

Sampling of Participants

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Teams

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Faculty Advisor

• Insight and guidance on

research methods and tools as taught in academia

• 10 hours of productive time

maximum

• Access to faculty for other

projects unrelated to IRC is permitted

• All work must be the original

work of the students

Charterholder Mentor

• Insight and guidance on

industry practice

• 6 hours of productive time

maximum

• Face to face or virtual
• Company management

question development

• Review first draft of research

Report

• Presentation development

assistance

Faculty and Mentor Involvement

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Subject Company

Westport Innovations (TSX: WPT, NASDAQ: WPRT) is engaged in the research, development and marketing of high performance, low-emission engine and fuel injection systems that utilize alternative gaseous fuels such as natural gas, propane or hydrogen.

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• Designated Officers ONLY
• Organized Meetings ONLY
• Mentor or Society

Representative must be present for ALL student- Westport interactions

• Students may contact

company suppliers, customers, vendors, etc.

Interacting with Westport Innovations

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• Participation Agreement
• Code of Ethics
• Ethics Course
• Student Registration

Student To Do List

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http://girc.membersocieties.org/Page s/AllTeams.aspx

• CFA Institute Online Ethics Case

Study

• Mentor’s Advice
• Professor’s Guidance
• Public Arena
• Other Challenge Webcasts
• Textbooks
• http://www.cfavancouver.com/Pa

ges/BCIRC.aspx

Tools for Students

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• Equity Asset Valuation; Stowe, Robinson, Pinto, McLeavy; 2nd

ed, Wiley

• Investment Valuation: Tools & techniques for determining the

value of any asset; Damodaran; 2nd university edition, Wiley

• Valuation: Measuring & managing the value of companies; Koller,

Goedhart, Wessels, 5th ed university edition, Wiley

• Damodaran on Valuation; Damodaran; 2nd edition, Wiley

Tools for Students

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• Teams of 3-5 students, the

same students throughout competition

• Enrolled in school at time of

final presentation

• Original work of students
• No contact with company
• utside of organized events
• No purchased or professional

research reports may be used

Rules

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• Mentors and faculty may NOT

contact the company

• Mentors and faculty may NOT

provide inside information or company reports

• Students, Mentors and Faculty

all agree to the CFA Institute Code of Ethics and Standards

• f Professional Conduct
• No family members at subject

company

Report Scoring

Section Maximum Business Description 5 Industry Overview & Competitive Positioning 15 Investment Summary 20 Valuation 20 Financial Analysis 20 Other Headings 5 Investment Risks 15 Total 100

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Report: Business Description

• What to Include
• Where it is, what they do, when was it founded
• What Not to Include
• Opinion about the company

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Report: Industry Overview & Competition

• What to Include
• Description, size, growth, key economic factors, related markets
• Who are competitors and why

Report: Investment Summary

• What to Include
• Investment thesis
• Summary of key analyses from other sections supporting the
• pinion
• Summary of key contradicting analyses

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Report: Valuation

• Free Cash Flow Equity =
• DCF equity =
• Residual Income equity =
• Market Comparables

Average - P/E, Forward P/E, EV/EBITDA, EV/Revenue

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Report: Financial Analysis

• What to Include
• Any analysis relevant to the valuation
• Analysis of income statement (profitability)
• Analysis of balance sheet (solvency)
• Analysis of cash flow statement (liquidity)
• Pro-forma financial statements

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Report: Investment Risks

• What to Include
• Financial risks
• Valuation risks (sensitivities)
• Industry risks
• Other qualitative risks

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Presentation Scoring

Criteria Maximum Argument 35 Questions 35 Team Involvement 15 Poise 10 Materials 5 Total 100

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Today Kick-Off Next 2 weeks Preliminary Research Prior to Oct 13th Question Submission Oct 18th Westport Presentation Oct 19th Follow-up email to Presentation Interim Research and Develop Recommendation Dec 3rd Final Report Due Interim Develop Presentation Interim Report Grading Mar 3rd Presentation Apr 7th Regional IRC

Timeline

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Expenses Covered

CFA Vancouver (Local Challenge - Presentation)

• Economy Class Airfare for UBC Okanagan & TRU
• Ferry for Vancouver Island-based Schools
• Parking Provided
• Meals Provided

CFA Institute (Regional/Global Challenge)

• Economy Class Airfare for students
• Hotel Lodging for students and one sponsored

guest (faculty advisor, industry mentor, or society administrator)

• Group Meals

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Questions

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Email: info@cfavancouver.com