Yale Team Wins Investment Research Competition
A team of Yale SOM students and Yale undergraduates won the New York Society of Security Analysts Investment Research Challenge last month, defeating teams from fourteen universities in the New York region. By winning the contest, which required an in-depth analysis of the clothier Phillips-Van Heusen, the five earned the right to travel to London for the world championship on April 2.
The Yale team — Martin Wexler ’09, Ayung Tseng ’09, Steven Hao YC ’09, Stephen Oshman YC ’10, and Michael Simpson YC ’10 — spent three months learning everything they could about Phillips-Van Heusen in order to produce a report recommending whether to buy, sell, or hold its stock. The reports were submitted to judges, who then chose four schools — Yale, Columbia Business School, Fordham University, and Rutgers — to compete in a final round, which consisted of a 10-minute presentation. To create their report, the Yale group researched the company’s product lines, performance, expansion and acquisition plans, competition, and cash flow, while trying to factor in predictions for the broader economy over the short and long terms.
"We just lived this company," said Wexler. "Ayung alone probably put in 100 hours pouring through every bit of information we could find on it. It was intense, but by the time we reached the finals we knew Phillips-Van Heusen cold."
Phillips-Van Heusen is one of the largest menswear suppliers in the world, owning the Calvin Klein, Kenneth Cole, Izod, and Van Heusen brands, among others. Wexler discussed the company’s balance sheet and cash flow during the presentation, while Tseng offered an analysis of the company’s margins and the impact the recession is likely to have on it. But they said it wasn’t just preparation that made them such a strong team. "I think our team dynamics really helped us," said Tseng. "We meshed very well and each team member had strengths that made the team better. I think our work at SOM in managing teams and building leadership skills gave us an edge."
The prize for the win was two-fold. The team earned $5,000 for the university and was invited to ring the opening bell for the NASDAQ on February 20. ("They put us on CNBC while the market was opening," Wexler said. "It was really cool.") If they win the global event next month, they’ll get another $10,000 and a chance to open the London stock exchange. Both Wexler and Tseng said they are intensely focused on coming in first in London. They’ve enlisted the help of their fellow students, including practicing the presentation before the SOM Investment Management Club.
Both said they are confident they will do well. If there is one concern, it’s that over the course of the next few weeks, their buy recommendation might start looking a little optimistic. "Phillips-Van Heusen’s earnings report will come out a week before we leave for London," Wexler said. "It’s quite possible our recommendation could turn to ‘sell,’ which would mean even more work to get everything right. So we’re not sitting back and relaxing. We’re working very hard."