USF Student Managed Investment Fund
description
Transcript of USF Student Managed Investment Fund
Student ManagedInvestment Fund
OUR APPROACHGiven the complexity of today’s financial markets, financial firms must have highly trained and skilled employees who are well-versed in the thought processes, technologies, and strategies of portfolio management and can hit the ground running. Since 2010, the USF Muma College of Business has met this demand through its Student Managed Investment Fund that provides top finance majors a real-time and hands-on experience. Students in the program become well-versed in stock analysis, evaluation and sales presentation leading to the purchase of securities through the Student Managed Investment Fund.
The investment fund is governed by an advisory board comprised of financial services industry professionals who grill students on their pitches and evaluate student ideas. They offer feedback and help students understand how the classroom lessons play out in the industry. These business leaders share their expertise and interact with students during their presentations. These seasoned corporate partners often extend internship opportunities to students.
ABOUT OUR PROGRAMThe rigorous, two-semester Applied Securities Analysis course, which is a signature part of the finance program, requires students to use their finance education in a real-world application. Student analysts manage a portfolio of assets donated to the USF Foundation for this specific purpose. This provides valuable hands-on experience. The portfolio’s stocks are all selected and monitored by students. The course is divided into three parts: • Students begin with a rapid and intense review of investment fundamentals as well as the tools, techniques,
and philosophies that underlie security analysis and selection.• Individual and team analysis of stocks that may be undervalued and identification of stocks which offer the
potential for superior investment performance.• Students present and defend stock selections orally and in writing to faculty and advisory board members.
Students who provide a compelling and persuasive valuation have their suggested stocks purchased and added to the ASA portfolio.
APPLIED SECURITIES ANALYSISInvestment education with real results
JOSHUA GOLDBERG Equity Research Associate Raymond James Financial, Inc.
JULIO NOVO Equity Research Associate Analyst T. Rowe Price
MORE THAN
60 PROFESSIONALS & 40 FIRMS
REGULARLY ENGAGEDIN THE PROGRAM
GRADUATES ARE ACCEPTING JOBS WITH SALARIES THAT ARE
MORE THAN
50% HIGHERTHAN SALARIES OF OTHER USF
FINANCE GRADUATES
The active portfolio beat the benchmark
year-to-date by over 200bp
USF STUDENT STOCK PICKS CONSISTENTLY OUTPERFORM THE MARKET
SEPTEMBER 2015
CARL-HARRY DOIRIN Equity Research Associate Raymond James Financial, Inc.
CHRIS GRYNIEWICZ Equity Research Manning & Napier Advisors
BIANCA RODRIGUEZ Options Analyst Raymond James Financial, Inc
Graduates accept jobs in highly competitive firms and industries.
CHICAGO
TAMPA
ST. PETERSBURG
BALTIMORE
CHICAGO
OUR ADVISORY BOARDOutside advisors to the students support the program by participating in the stock pitch portion of the class and by formally
mentoring the students.
The advisory board is comprised of seasoned financial professionals from Tampa Bay and beyond. USF alumni from
Chicago, San Francisco, and Miami frequently travel back to USF to participate in the student pitch sessions. To reflect the
real world, advisors challenge students on valuation and fundamentals and require the students’ full understanding of the
business model. These questions come from individuals who have been in the field for years. This approach trains students
who can succeed in any environment.
PROGRAM FEATURESSignificant community involvement
PROGRAM FEATURESSignificant community involvement EXPECTATIONS OF OUR STUDENTS
All USF finance majors are required to take entry-level and advanced courses focusing on investments. Selected
participants in the Student Managed Investment Fund are allowed to take an additional two-semester Applied
Securities Analysis course. Students are invited to apply to for this highly selective course based on their
academic performance, the rigor of courses taken, and faculty recommendations. Prospective students must
interview for the program – they must make a two-semester, 40+ hour per week commitment to the program –
and complete more than 200 hours of work during the summer. Students perform 100 percent of the portfolio
management and analysis. The level of effort shows in the results.
Prepared by Eric McNew and Michael Schopler
1
Hi-Crush LP
Current Price Intrinsic Value
Target Price
Market Cap 1.1B
$76
$48
$36.83
Company Profile
Investment Thesis
Catalyst
Price Performance
Recommendation Hi-Crush Partners LP (Hi-Crush) is a pure play, low-cost, domestic producer of premium
monocrystalline sand, a specialized mineral that is used to enhance the recovery rates of hy-
drocarbons from oil and natural gas wells. Its reserves consist of “Northern White” sand, a re-
source existing predominantly in Wisconsin and limited portions of the upper Midwest region
of the United States.
The focus on domestic energy has given rise to E&P firms
resorting to unconventional extraction techniques know as
hydraulic fracturing or “fracking” in the oil and natural gas
industry. Demand for materials or “proppants” used in the
process of extraction have seen a tremendous surge in the
amount required through the extraction process because of
the increases in drilling domestically. The amount of prop-
pant used in fracking is expected to increase substantially
over the next decade. Hi-Crush is in the position to capitalize
from this megatrend.
Given its current price and our valuation , we consider Hi-
Crush to be undervalued and a great investment opportunity
to add alpha to the SMIF.
Significant increase in demand for proppants
Ample supply of high quality raw frac sand
Logistic and infrastructure advantages
Superior operating cost structures
M&A possibilities
Prices as of 1/24/14
Key Statistics $39.08
$16.57
$2.04
5.54%
2.31
15.94
12.50
0.67
.9
42.41%
52 Week High
52 Week Low
Dividend
Dividend Yield
EPS (TTM)
P/E (TTM)
P/E Forward
PEG
Beta
ROE
BUY
Equity Report | January 28, 2014 | NYSE: HCLP
Hi-Crush Partners LP
Aug-12Dec-12
Apr-13Aug-13
Dec-13
HCLPS&P 500
Risk
New proppant innovation
Regulatory risk
Energy prices
Vertical integration risk
Lack of historical data about Hi-Crush
Stock Price: $21.71 Market Cap: $1.45B P/E: 17.77X Div. Yield: N/A EPS: $1.22
Sector: Technology
Industry: Internet Content & Info.
Key Statistics
Fwd P/E: 10.3X
PEG: 0.5
P/S: 2.4
P/B: 3.2
ROE: 18.5%
ROA: 11.1%
Curr. Ratio: 2.36
Quick Ratio: 1.79
Shares O/S: 66.7M
52 Week: $18.62-$32.25
Financial Snapshot
VALUECLICK BUSINESS DESCRIPTION NASDAQ: VCLK
ValueClick, Inc. provides online advertising campaigns and programs for advertisers and advertis-ing agency customers in the United States and internationally. The company’s customers include direct marketers, brand advertisers, the advertising agencies, and traffic distribution partners.
Stock Performance
Investment Risks
Investment Thesis The megatrend of rapidly increasing digital, particularly between mobile consumption by
consumers will lead to above average growth rates in online advertising
Leadership in mobile advertising, affiliate marketing, and online customer relationship man-agement will drive future revenues
Increased usage of comprehensive consumer analytics for a more personalized ad experience will drive demand for ValueClick’s services
Renewed focus on higher margin core segments
Unable to obtain adequate inventory for its clients
Diminished ability to create enhanced value for its clients as a result of rapid changes in technology used by the industry
Adverse regulatory policy decisions affecting taxation and consumer data collection
Recommendation: 3 Yr Target Price: $33 BUY
Prepared by Glenn Gutierrez, Brian Rohl and Klenton Perry Page 1
Competitive Advantage ValueClick is a top ten competitor in a market where 80% of revenues are provided by the top
ten digital marketing companies. ValueClick’s comprehensive proprietary data set on 97% of
digital consumers combined with their customizable data management techniques and integrated,
scalable marketing solutions provide ValueClick with a competitive edge in the digital advertis-
ing market.
$ Million 2012 2013E 2014E
Revenue 539.8 534.7 577.5
Net Income 78.6 68.8 121.9
EPS $1.02 $1.03 $1.28
Growth % 2012 2013E 2014E
Revenue 34.8% -1.0% 8.0%
Net Income -7.3% 6% 19%
EPS -3.8% -1% 24%
Margin % 2012 2013E 2014E
Gross 67.0% 67.1% 67.0%
Net 14.5% 12.8% 21.1%
Intrinsic Value: 28 January 28, 2014
S&P 500
Muma College of Business | Analysts: Haomin Chen, Daniel Dorman, and Matt Errico
1
NYSE: OME Date: 2/26/15 Price: $11 Fair Value: $13 Target Price: $18
Company Overview
RecommendationBUYSector: Consumer Goods
Industry: Processed & Packaged GoodsMarket Cap: $238 MTrailing P/E: 9.6
5 Yr Average: 14.6Industry Avg: 14.7
Forward P/E: 9.85P/S: .87
Industry Avg: 2.71P/B: .89
Industry Avg: 3.17EV/EBITDA: 3.8Beta: 1.6ROA:
9.5%ROE:
10.0%
Omega Protein Corporation manufactures Omega-3 fish oil, specialty fish products, and nutri-
tional supplements for sale to various feed manufactures and wholesale organic distributors. The
company operates in two segments: Animal Nutrition and Human Nutrition. The Animal Nutrition
segment harvests fish (menhaden) to produce fish meal, crude fish oil, refined fish oil, and fish
solubles. The Human Nutrition segment offers protein products, Omega-3 fish oil supplements
and operates as an ingredient supplier for the nutraceutical industry.
Investment Thesis
• Growing demand from consumers becoming more
conscious about their health• Increased product offerings in Human segment will
drive revenue growth• Acquisitions of Cyvex (12/10) and InCon (9/11) en-
able vertical integration and differentiate its fish oil
from substitutes • Acquisition of Bioriginal (9/14)creates steady rev-
enue stream for Human segment to hedge against
seasonality in the Animal segment• Fish oil from menhaden is the only oil approved by
the FDA• Consistent catch of menhaden will provide Omega
with consistent revenue as demand for fish meal and
fish oil grow• Acquisition of Wisconsin Specialty Protein (2/13)
expands presence into specialty protein market and
brings added value to its product line
1 - Year Price Performance
Key Statistics
Catalysts
Risks
• Increasing pork production• Growing aquaculture environment• Plant nutrition
• Sales price of fish oil and fish meal to animal end
markets• Human supplements
• New entrants into menhaden fishing market
• Government / FDA regulations adversely affect the
firm’s ability to catch menhaden• Energy swap adjustments and seasonality Omega’s
animal segment could dilute earnings more than
anticipated• Reliance on menhaden fish
0%
25%
50%
Feb-‐14 Mar-‐14 Apr-‐14 May-‐14 Jun-‐14 Jul-‐14 Aug-‐14 Sep-‐14 Oct-‐14 Nov-‐14 Dec-‐14 Jan-‐15 Feb-‐15
OME S&P 500
93%RETURN IN 5 MONTHS
60%RETURN SINCE
NOVEMBER 2015
65%RETURN IN 6 MONTHS
PROGRAM CURRICULUM Incorporating analysis and critical thinking
OUR ASSET MANAGEMENT FOCUSThe Applied Securities Analysis course is designed to develop the analytical skills and competencies
that underlie security selection. The team-based environment allows students to accomplish something
far beyond what is typically done in a classroom setting and teaches them to perform at a high level in
a real-world environment. This approach prepares students for success in many finance professions.
Course projects include:
• Analyzing macro-economic drivers• Analyzing stock market valuation • Analyzing the main industry sectors that comprise the stock market • Analyzing the recent financial crisis/great recession• Identifying stock market anomalies • Identifying and explaining how to use various data sources • Analyzing the existing Student Managed Investment Fund portfolio • Covering and reporting material from the financial press • Developing and justifying stock screening techniques • Writing and presenting summaries of important books relevant to the course • Assessing the value of analyst recommendations and reports • Identifying factors that can be used to identify unusually good investment opportunities • Identifying and analyzing unusually good investment opportunities
• Visiting top financial firms to present research and stock ideas
The finance and investment lessons are taught by experienced and well-credentialed faculty.
Understanding that these top students need more than just the industry knowledge to succeed, faculty
who are experts in business communications and other “soft skills” help bolster these young scholars’
presentation and networking skills. Students also learn the importance of professional development and
improve upon their business dining skills!
ANALYSTSSuccess through hard work
Austin Boyle Honors College student Austin Boyle learned the importance of hard work, teamwork and leadership as a member of the Delta Chi fraternity and as a player on the USF’s Men’s La-crosse team. Majoring in finance with a minor in leadership, Boyle has studied abroad and has traveled to nearly a dozen countries on three continents. On one of these trips, he ran with the bulls in Pamplona, Spain. Boyle served as an intern at Ameriprise Financial, where he got his first taste of the finance industry. He expects to graduate in 2016.
Hailey Davis Finance major Hailey Davis is the first person in her family to attend college. After graduating high school a year early, she developed a passion for the financial markets. Davis learned the value of hard work after working in her family’s organic peach orchard and serving as an intern for JPMorgan Chase and Ballast Point Ventures. She aspires to work as an equity research analyst in Tampa.
Isabella Duarte Isabella Duarte’s road to USF traversed three continents. A native of Sao Paulo, Brazil, Duarte studied abroad solo in New Zealand where she learned English when she was 16 years old. Later, she came to America to study finance because of its well-developed financial markets. She has held three internships: one in Brazil at an import company and two in Tampa at AXA Advisors and InvestAmerica Capital Advisors. She speaks Portuguese, English and Spanish, skills which she hopes will help her land a career as an international investment manager.
Rick Eldee Rick Eldee came to USF as a biology major because his family expected him to pursue a career in medicine, much like the rest of his family. Strong willed, Eldee changed his major to finance two years later and hopes to learn more about portfolio management and career opportunities in the industry. The Tampa native has earned a perfect GPA in his new major. His hobbies include football and fishing.
ANALYSTSSuccess through hard work
Gino Jo Finance major Gino Jo studied abroad at the University of Exeter in the United Kingdom in 2014, where he concentrated on economics and participated in the university’s Student Managed Equity Fund through its Business & Finance Society. The first person in his family to pursue a college degree, Jo is also studying economics as a minor and is the vice president of the Student Finance Association. He is a healthcare mergers and acquisitions analyst at Crosstree Capital Partners. He previously interned with JPMorgan Chase in Tampa. A native of Peru, Jo is bilingual and during his free time enjoys traveling and digital photography.
Dylan Kesterson Dylan Kesterson has several years of experience in retail and door-to-door sales, but an interest in real estate investing ignited his passion for learning about the financial markets and the operations of business. Kesterson loves the idea of competing with a team, and in his free time he is most likely watching sports. Kesterson is a member of the National Society of Leadership and Success, and he aspires to become an investment portfolio manager. He plans to earn an MBA and the CFA designation after gaining experience in the finance area.
Bradley Gordon, Jr. Bradley Gordon, Jr. has always been interested in studying business, and after watching the market crash in 2008, he decided to study finance in order to learn more about opportunities in the market. While studying at USF, he was the lead mechanic in North America for a cycling corporation, and is now interning as an analyst in the risk division of FIS Global. He is the mar-keting chair on the executive board of the Student Finance Association. He will graduate from the finance program in 2016.
Zoe Knapke Honors College student Zoe Knapke will graduate in 2016 with a finance degree. Her passion for financial analysis led her to pursue an internship at Jabil Circuit where she assisted the financial planning and analysis team. Knapke is actively involved on campus, serving as an of-ficer of the Student Finance Association, Alpha Delta Pi, and the Chinese Culture Festival Club. Her engagement has not come at the expense of academics: she has maintained a 3.9 GPA. When she is not following the markets, Knapke enjoys working as a marketing team member with Red Bull and playing tennis.
Santiago Iguaran A native of Bogotá, Colombia, Santiago Iguaran is fluent in both English and Spanish. He came to the United States six years ago to pursue opportunities that were not available to him in his country. He has clearly succeeded, as he has earned a 3.97 GPA, is a member of Beta Gamma Sigma honor society, and was selected for USF’s 25 Under 25 program in his junior year. Additionally, Iguaran has received multiple scholarships and funded his own education. He plans to pursue a master’s degree in finance and the CFA certification.
Brandon Moore Brandon Moore developed his passion for understanding the global economy during the Great Recession. Ethics and asset protection fueled his interest and led him to pursue a career in investment valuation. Few students can consider their mother a classmate, but Moore started his college career taking classes with his mother while she finished her associate degree at Hillsborough Community College. After graduating in 2016 with a degree in finance and a minor in economics, Moore will take the CFA exam.
Bridget Parsells Bridget Parsells is a self-motivated student originally from the New York City metropolitan area. The first person in her family to pursue a college degree, Parsells moved to Tampa on her own to study finance at USF. She values her education, independence, and ability to support herself through working while in school. Parsells aims to manage investments for a financial firm in Manhattan. She also aspires to open her own public art gallery.
Heriberto Ramos A junior majoring in finance, Heriberto Ramos developed his interest in financial markets due to his admiration of his father, who is part of an investment company in Mexico. Born in Torreon, Mexico, Ramos came to the United States in 2010, moving to Jacksonville to prepare himself for an American collegiate experience. At USF, Ramos has been involved in Enactus as project leader for Suit-A-Bull, a suit-lending program for students of all majors. Ramos plans to work in equity research and, later on, aims to open his own investment company.
Brandon Reagan Before coming to USF, Brandon Reagan played as a goaltender in the North American Hockey League for the Topeka Roadrunners. Though he was offered opportunities to play hockey on a collegiate team, Reagan opted to pursue his education at USF. A native of Essex, Vt., he grew up watching the success of Green Mountain Coffee Roasters, which sparked an interest in financial markets as a career path. Reagan has developed his finance skills by serving as a chair of the Student Finance Association at USF and serving as an intern at Ballast Point Ventures this year. These experiences have helped shape his work ethic, camaraderie, and ability to work under pressure.
ANALYSTSSuccess through hard work
ANALYSTSSuccess through hard work
Student Managed Investment Fund • USF Muma College of Business4202 E. Fowler Ave., BSN 3403 • Tampa, FL 33620-5500
usf.edu/smif • (813) 974-2081 Student ManagedInvestment Fund
Student ManagedInvestment Fund