March Madness for stock analysis

The University of Richmond has a bad outbreak of March Madness.

The men’s basketball team is heading to the NCAA tournament for the first time in six years. But a team of crack finance students are trying to go to the Big Dance for another tournament, and this one is on a world stage.

Last month UR’s team won the CFA Virginia Investment Research Challenge for the second straight year, and will compete March 17 and 18 in the Americas regional competition held in New York. That competition will feature winners from all over North and South America vying for a chance to head to Hong Kong. Last year Brazil won the Americas region.

In the Virginia competition UR went up against teams from William and Mary, UVA, JMU, Hampden-Sydney, and VCU. All six teams created a presentation determining the stock value of one company, CarMax, and presented their findings based on one of two possible recommendations: buy or sell.

Finance Professor David North serves as the faculty sponsor, and said recruiting this year’s team was a lot easier coming off of last year’s win.

“When we won it last year I had to scramble to round kids up, but this year we had about 15 students wanting one of our four spots,” said North.

Students learn in a way that can’t be replicated in the classroom because they are really on their own with their research, North said.

After meeting with CarMax executives and analyzing company figures, the team published their findings in a 20-page document, and then presented those findings to a five-judge panel. In the New York competition, teams will all present evaluations of different companies, placing the judgment solely on the presentation. Senior finance major Nicholas Chew said that’s an advantage.

“The Virginia competition was essentially comparing apples to apples, but in New York it will be completely different,” Chew said. “Everyone has a different company so the goal is to show how compelling your argument is, and we believe we’ve got a compelling story to tell. It comes down to the quality of your ideas, and we’re confident in our presentation.”

Chew said he put more work into the competition than any single class at UR.

“We had a large degree of autonomy,” said Chew. “Dr. North and Chris let us form our own opinions, but were always there to tell us when we were wrong, and luckily nothing was.”

The three other students on the UR CFA team are Jill Gramolini, Jessica Murray, and Gordon O’Brien. North said all have jobs waiting for them after graduation, and Chew said he plans to start working for Oppenheimer and Company in New York.

Drew Jackson is a BizSense reporter. Please send news tips to [email protected]

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