Joe Nau knows firsthand that it can be hard for students from Ohio State’s Fisher College of Business to get the attention of recruiters and bankers on Wall Street. Students at the Columbus, Ohio-based school who want the much sought-after analyst positions need to differentiate themselves, one of the reasons Nau and his peers decided to launch an intercollegiate stock pitch competition this spring. The stock pitch competition, run by Buckeye Capital Investors, a student-run investment club, gives students from Ohio State and other schools an opportunity to present a sophisticated analysis of a company before a team of bankers and researchers, and argue why they believe it is a good investment. This year, judges from Keybanc Capital Markets and Cleveland Research Company evaluated the pitches.
“Coming from Ohio State, it can be tricky to get competitive positions on Wall Street,” says Nau, president of Buckeye Capital Investors and a senior at Fisher. “We’re really focused on making sure that our members are in an excellent position to purse a career in finance, and the competition is one of the ways we prepare them for these roles.”
Stock pitch competitions like the one run by Ohio State and other schools are increasingly becoming an important tool for undergraduate business students looking to get an edge in the finance world. Investment clubs at Harvard University, University of Michigan’s Ross School of Business and UCLA all hosted their own stock pitch competitions this year, analyzing in detail companies like Michael Kors, Yelp and Lululemon, and making bold predictions about their future.
COMPETITIONS BECOMING VALUABLE RECRUITING TOOLS FOR WALL STREET FIRMS
Outside companies also are trying to build on the momentum and excitement on campuses, starting their own national stock pitch competitions. For example, SeekingAlpha.com, an online crowd sourced platform for investment research, hosted their first intercollegiate competition in New York City this spring, attracting nine schools who presented before a team of judges from Goldman Sachs and other investment firms. Students who participate in the competition take their pitches and publish them as articles on SeekingAlpha.com, giving them additional notoriety if their predictions pick up high traffic volume on the website, says Jennifer Coombs, head of campus outreach at investor forum Seeking Alpha.
Increasingly, these competitions are becoming valuable recruiting tools for banks on Wall Street, who send bankers and analysts to judge the competitions.
“It is slowly becoming a new recruiting tool for larger companies,” says Coombs. “They’ve noticed that not all of the students who apply for jobs at their companies compete in these competitions, but the ones that do are far more impressive and far more marketable for their purposes than someone else who’d apply for the job randomly from their school.“
PREP CAN TAKE UP TO 60 HOURS
The world of stock pitch competitions is research intensive, requiring teams to do a thorough overview, analysis and valuation of the company they’ve chosen and can take as much as 50 to 60 hours of work. Teams are expected to come into the competition with a sophisticated “pitch deck” PowerPoint presentation, generally, giving students a chance to show off before judges in presentations the quantitative and analytic skills they’ve honed in their business classes. The student teams need to be prepared to field a wide range of question from judges including the company’s historical performance, management, future strategies and macro and micro economic environments they operate in.
James William Carlstedt, a junior in the Honors College at Michigan State University’s Broad College of Business, was a member of the team that won the $1,000 first prize at Ohio State’s stock pitch competition in April for its pitch on KAR Auction Services, a provider of vehicle auction services in North America. Carlstedt says he believes his group was able to differentiate itself from the other schools by the team’s deep understanding of the company, competitors and niche market. Participating in the competition was a valuable experience because he learned how professional investment analysts and researchers think about, question and criticize a stock pitch, a skill that will be beneficial for future pitch competitions as well as later in his career, he says.
“I enjoy participating in stock pitch competitions because it allows my team and me to fully incorporate everything we’ve learned about finance, economics and business strategy in a competitive setting,” says Carlstedt.