Behind Tulane’s Burkenroad Reports

At Tulane University’s Freeman School of Business, undergrads are getting real-world investment experience by writing investment research reports for public companies.

It’s part of a for-credit course called Burkenroad Reports. And for 26 years, Professor Peter Ricchiuti, founder and director of the course, has been leading the nation’s first sell-side student stock research program.

“The program is an impressive career springboard and allows our students to differentiate themselves from candidates at other business schools,” Ricchiuti tells Poets&Quants. “Our students are armed with most of the skills they need.”

EXPERIENTIAL EXPERIENCE

For B-school students, the course can offer a look into the investment world and what it entails.

Each semester, 100 undergraduates, MBAs, and Masters of Management in Energy students from the Freeman School are divided into five-member teams to write an investment research report on one of 20 small-cap, under-followed public companies headquartered in Louisiana, Texas, Mississippi, Alabama, Georgia, and Florida.

Students fly or drive out to meet with top company management as part of the research process – an experience that can prove worthy in the long run.

“Meeting with a company’s c-suite executives can be pretty intimidating to a student,” Ricchiuti points out. “Our students learn from these experiences and learn that these meetings require some social skills and that asking open-ended friendly questions get you far more information you need than a 60 Minutes style interview.”

By the end of the semester, students produce 14 deliverables including reports on financial modeling, assumptions, valuation techniques, peer comparisons, and a projection of a 12-month target price. Additionally, the reports also include company history and an outlook for both the company and its industry.

“Employers truly value experiential learning,” Ricchiuti explains. “And it doesn’t get any more hands-on than Burkenroad Reports. The report itself opens doors and provides a great example of the candidate’s writing and analytical skills as well as their ability to put out a quality, timely product as a member of a team.”

TWICE THE TIME COMMITMENT

The program isn’t taken lightly. In fact, according to Ricchiuti, students often say the three-credit course takes twice the time commitment of average Freeman courses.

“While the class meets for just one hour each week it also requires lots of team meetings,” Ricchiuti says. “Additionally, they can count on six two-hour meetings with our modeling professor, three team meetings with our writing instructor, and the one day team visit to the company they are following.”

Part of the challenge — and learning opportunity — for students is the ambiguous and uncertain nature of the investment world.

“Management’s answers to your questions aren’t quite as clear or black and white as you might have expected,” Ricchiuti says. “Students are dealing with a moving target and the investment profession pays you to determine what a company will look like in the future, not in the present or past. Stock price movements can change your recommendation and earnings releases and company announcements can alter a team’s expectations.”

At times, students may even conduct research only to find that they’ll have to start all over from scratch.

“In several instances, we have had companies make a major acquisition, or be bought out themselves, during the semester,” Ricchiuti says. “This often sends the team right back to the drawing board.”

HOW THE SKILLS TRANSLATE

For many students, the program helps humanize the investment world, where many investors see public companies as merely ticker symbols.

“You’re unable to see it that way after getting to know the people running the company and visiting their facilities,” Ricchiuti says.

Several alumni of the program go on to graduate into careers in financial investments as research analysts, investment bankers, portfolio managers, and more.

“Many times, alums have told us that the program helped ignite in them a passion for the financial markets,” Ricchiuti says.

THE ROAD AHEAD

This academic year, Burkenroad Reports is introducing a number of exciting new changes, including a new set of analysis.

“We are developing a section that would include a company’s record, comments, and statements on environmental, social and governance issues,” Ricchiuti says. “This set of topics is becoming more and more important to investors. Our students have been telling me about including this as it’s particularly important when this generation of younger investors decide whether or not to buy shares in a particular stock.”

On April 24, 2020, the program will host its 24th Annual Burkenroad Reports Investment Conference in downtown New Orleans, where nearly 800 investors come together.

Top management of the companies in the program present their outlook for their organization and industry. Past keynote speakers have included big-name investors such as Mario Gabelli, Jim Paulsen, Doug Kass, and David Nierenberg.

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