Final Presentations of ASA Class Features Stock Pitches to Investors and Alumni
By Keith Morelli
TAMPA (April 29, 2019) -- After the stock pitches were methodically presented and all the difficult and sometimes confrontational questions were asked – creating an atmosphere of student angst and investor hubris – it was all Kumbaya at the final presentations of the Applied Securities Analysis class earlier this month.
Alumni of the exclusive class came to chat with students and offer job interview and career advice. The reception included both students and alumni and about two dozen professional investors who make up the advisory board of the Student Managed Investment Fund, which as of mid-April, totaled $654,102.
But before all of that fellowship took place, the class was held. As part of their coursework, students pick a stock and pitch it to the board to decide whether to invest real money in the fund into the stock.
The first team of students pitched a company that sells craft beer and high-end wine and spirits. The team sounded as if it had done its homework. It had graphs and charts and trends tracked. But the comment from the first seasoned stock analyst to raise her hand: “You guys missed the mark on this one.”
The investor said she loved the stock, but there was no mention of the company investing a couple billion dollars recently into a cannabis subsidiary. Also, there was no mention of the stock jumping $7 that morning.
“This is your last presentation,” the investors said. “You should have come out here just kicking it.”
And so it goes in this rigorous class that is not for the faint hearted. It is set up to teach finance students about the real world of investing. The Student Managed Investment Fund-related course offers motivated, finance-savvy students the chance to participate in real financial management strategies and decisions about how to invest real money, with real consequences if a bum stock is purchased.
They make their pitches to the advisory board made up of veteran investors and brokers and the students suffer the price if they do not do their due diligence. The board, which makes the ultimate decision as to whether to invest in pitched stocks, is encouraged to be tough on the students, just as though they worked for an investment firm and were trying to convince investors to plunk money on a certain stock. The student teams mount six pitches, two in the fall and four in the spring.
Jack Rader, an advisory board member who helped start the program nearly a decade ago, said that despite the bare-knuckle constructive criticism, the students who made pitches over the past two semesters have come a long way since their first pitches in October and that’s thanks to the rough treatment delivered by the board.
At the outset of the class, he urged the investors to ask the tough questions, to be critical. “Give them the pushback that they need,” he said. The pitches should be judged on three prongs, he said. Whether the stock is a good investment idea, how well the pitch was articulated and if the stock should be added to the Student Managed Investment Fund.
To be fair, the investors did compliment the students when it was called for. There was some solid background work done by all the teams and each presentation seemed, for the most part, to be polished and well prepared, including graphs and charts that showed discounted cash flows into equity valuation, margin expansions and any risks associated with investing.
All three teams suffered through some pointed and difficult questions about their stocks’ viability in the future and criticisms about their presentations themselves, but when it was over, everyone shook hands, broke bread together and networked.
The class was the last one of the academic year and nine alumni of the course were on hand to help grill the students and to offer advice and encouragement. Each alumnus was recognized after the class concluded and a reception was held. The sometimes-acrimonious contest turned into a congenial afternoon.
The course began nine years ago and has churned out 100 alumni, said Leo Chen, who teaches the course. Students, investors and alumni, some of whom took part in the grilling of the teams, chatted easily afterward, and even posted for a group photo.