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Through a combination of analytical and interpersonal skills, a team of full-time students from Chicago Booth have won the top spot in the Cornell Stock Pitch Competition for the first time.
"I think the win showcases Chicago Booth's emphasis on not only quantitative skills but also the ability to communicate and work well in different team environments," said Robert Rdzak, one of the winning students, a first-year in the Full-Time MBA Program.
Each member of the three-person, first-year student team brought something different and valued to the competition, Rdzak said. Connie Hsu, an experienced equity analyst, showed talent with "bottoms-up valuations and help with quantitative aspects of our pitches," Rdzak said. "I was good at a more top-down, macro approach and public speaking. Aaron Sallen was really good at blending the two different approaches together and approaching investments from different perspectives."
This was the first time Booth won the stock competition, held at the Johnson School at Cornell University on November 5.
Rdzak described the competition as "both a sprint and a marathon."
After teams trained for a morning session on computer software, judges assigned a list of four stocks in two industries: software and food. Teams had to choose either a long or a short candidate from the list. They also were given a common stock, Robert Half International, a professional staffing company. Teams had to present a position on this common stock: long (buy), neutral (hold), or short (sell), Rdzak said.
Teams had 12 hours to formulate their positions before presenting to the judges. "We had to remain focused and work quickly to prepare the presentation, but at the same time we also had to have the stamina to perform well in what was almost a 30-hour-straight tournament," Rdzak said.
The Booth team performed a detailed analysis in making its stock picks. For example, regarding the food stock the team chose to sell, Hain Celestial, the team looked at everything from investor Carl Icahn's role with the food company's board to revenue growth and the state and timing of cost savings from acquisition integration.
"We felt many investors were bullish on the stock because Carl Icahn recently acquired a significant ownership stake, and that an acquisition would be imminent," said Sallen. "Our analysis, however, showed that Icahn has assumed a friendly role with the board and has agreed not to pursue a transaction absent of the board's support. As such, any future transaction will likely take a significant amount of time since it will require the approval of the board's special committee, rather than occurring through a hostile transaction led solely by Icahn."
The Booth team was quick on its feet in front of the judges and able to remain calm during their peppering of questions.
"The really big piece of feedback we received from the judges was that we had well-thought-out reasoning for our particular calls and that we were able to defend them very well during the Q&A sessions," Rdzak said.
—Mary Sue Penn