NYU and CU take first stock pitch honors

By Linda Myers

A student team from New York University's Stern School of Business was the first-place winner April 4 in the first-ever MBA Stock Pitch Competition. Cornell's Johnson Graduate School of Management, which hosted the competition, came in second.

Among the judges in the MBA Stock Pitch Competion in Sage Hall, April 4, are, from left, Peter A. Wright, P.A.W. Partners; Judah S. Kraushaar, retired, Merrill Lynch; and William R. Gruver, retired, Goldman Sachs & Co. and executive-in-residence, Bucknell University. Wright and Kraushaar have MBA degrees from Cornell. Nicola Kountoupes/University Photography

The winners competed for two days against teams from seven other top-tier U.S. business schools and were judged by a blue-ribbon panel of Wall Street stock-analysis experts on the buy and sell sides. The NYU team won a cash prize of $3,000, and the Johnson School team won $1,500. The competition for future stock analysts was co-sponsored by the New York Stock Exchange.

The teams, each made up of three MBA students, were given three scenarios in which they were assigned either a specific stock, randomly assigned by a computer program, or a specific industry from which they picked a stock. The teams had just one evening to do extensive research on their stocks. In the real world, such analysis often takes two weeks or longer for a single stock. In addition the teams were allotted only five minutes to argue for or against investing in the stocks, plus 10 minutes to answer tough questions from the judges in the first round and 20 in the final round, a much tighter time frame than in the real world.

Most of the students aspire to be stock analysts. The competition gave them an opportunity to showcase their stock picking and presentation skills.

"The Johnson School hosted the competition because we believe the real-time, experiential focus that stock pitching represents is part of the future of investment management education at business schools," said Charles Lee, the Johnson School professor and expert on stock valuation who directs the school's Parker Center for Investment Research, a hands-on teaching center for financial analysis at the Johnson School, where the students conducted their research. "The new breed of investment analyst must be independent and able to provide strong analysis to back selections, with a full understanding that success comes from the performance of the equity," said Lee.

Members of the NYU winning team were Frank Boroch, Sami Kohan and Chris Horvers. Members of the Cornell Johnson School second-place team were Jeff Starr, John Morgan and Ralph Marcello. Johnson School team members were all student managers of the Cayuga Fund, an actual investment fund, and were picked by their peers for their savvy analysis skills and track record.

In addition to NYU and Cornell, competing teams came from MBA programs at Harvard, the University of Chicago, Duke (Fuqua), Columbia, Massachusetts Institute of Technology (Sloan), the University of Pennsylvania (Wharton) and the University of Michigan. In the final round on day two, the competition was narrowed down to four finalist teams, which also included Duke and Michigan. Stocks they analyzed were from the health-care industry.

The judges were: Andrew Galligan Jr., CFA, director and analyst, TimesSquare Capital Management; William Gruver, former general partner and CAO, Goldman Sachs & Co.; Judah Kraushaar, former sell-side analyst, Merrill Lynch; Stephen Lanzendorf, CFA, Independence Investments; and Peter Wright, founder of P.A.W. Partners, one of the largest U.S. hedge funds. Criteria for their selections included accuracy, reliability and depth of financial analysis; knowledge of industry and company in stock selections; and presentation skills. Gruver praised the students for doing so much in such a short time, and Kraushaar joked: "I have a couple of trades I want to do when I get home."

The competition took place under the auspices of the Parker Center and was organized by MBA students. FactSet and StockVal were the software used by the teams, and the firms that make them were event co-sponsors. For highlights of the event, see these Web sites: http://www.mbastockpitch.com and http://parkercenter.johnson.cornell.edu.