AUT Business School finance students took out top honours and a chance to represent New Zealand in this year’s CFA Institute Research Challenge.
University of Otago were second and University of Auckland third in the New Zealand leg of the annual global competition.
The AUT team of Shashank Bharadwaj, Santiago Escobar, Jordan Sanford, Connor Smith-Traill and Russ Wilcox ran the financial ruler over listed seafood company Sanford Limited, before writing a research report, complete with a recommendation to buy the shares, as if the team were practising equity analysts.
Shashank Bharadwaj says a highlight of the competition was the opportunity to practically test and apply the concepts he’d been studying in the Chartered Financial Analyst (CFA) curriculum.
“The takeaway for me is that understanding the underlying business and business drivers is the key to understanding valuation,” says Shashank.
Under the guidance of team mentors AUT senior lecturer Dr Katrin Gottschalk and Craigs Investment Partners investment advisor Fraser Pease, the five students were able to question Sanford’s chief financial officer Clement Chia via conference call and email.
Connor Smith-Traill says the key thing he learnt through the CFA Institute Research Challenge was there are many ways to approach a business and see value within it.
“You need to gain an understanding of all parts of the business from a range of different and sometimes conflicting sources and then put together your own image of the company. This opens the door to a lot of discussion and interesting perspectives on business, investing and the world,” he says.
Santiago Escobar says the competition provided an incredibly steep learning curve for the student team, with a challenging, real-life task that couldn’t easily be replicated in a classroom environment.
“Dealing with a thousand different sources of data makes everything more ambiguous and helped us realise that equity analysis is more of an art than an exact science,” Santiago says.
The teams presented their investment analysis and recommendation to a panel of top investment professionals from Salt Funds Management and Forsyth Barr. Judges Andrew Bolland, Michael Kenealy and Matthew Henry, all CFA charterholders, were impressed by the high quality of research showcased across all teams.
The AUT team’s faculty advisor Dr Gottschalk says the competition is an invaluable learning experience for students seeking a career in the finance industry.
“Not only do the students get hands-on experience as financial analysts and mentoring from both academics and investment professionals, they also enhance their team work and presentation skills and learn to negotiate tight deadlines. The benefits from networking with high-profile industry leaders and top finance students from other universities are huge.”
The AUT students will go on to represent New Zealand at the Asia Pacific Regional Challenge in April 2018.