By Andrew Bates, EWMBA 17
The Win: 2nd Place in the Fink Center Stock Pitch Competition at UCLA, Feb. 12, 2016
The Team: (left to right) Benjamin Kim, EWMBA 17, Nikhil Mungre, EWMBA 17, Arvind Ranganathan, EWMBA 17, Andrew Bates, EWMBA 17.
The Field: Twelve teams from the US and Europe's top MBA programs met to present investment recommendations to a panel of portfolio managers from top industry firms including Capital Group, HighMark Capital, Kayne Anderson Rudnick, TCW, UPI Management, and Webush Securities. All teams competed in the first round consisting of a 15-minute presentation and a 20-minute Q&A. The top three teams went on to present a second stock recommendation for a predetermined company.
The Pitch: Our Berkeley-Haas team, Alpha Capital, presented a short position for Chipotle based on a negative one-year outlook due to the high valuation, expected margin pressure, and brand damage from health and safety issues. After narrowing the teams down to three, each remaining school pitched an investment thesis on Disney. We went long based off the conclusion that Wall Street analysts were overreacting to fears of eroding cable subscriptions, and based on a favorable outlook for Disney’s other large business units (studio, resorts and parks, merchandise).
The Clincher: We demonstrated a thorough understanding of Disney’s fundamental business model and delivered convincing evidence for the thesis. The judges were impressed by our understanding of the sensitivity of valuation models to the assumptions for two key variables, the interest rate and the terminal growth rate. We presented our valuation across a range for both variables, presenting a broad understanding of the potential outcomes.
The Haas Factor: We requested feedback on our presentation from multiple professors at Haas, and their feedback was invaluable. The practice of walking multiple people through our analysis led us to really understand our thesis. By the time we got to the final presentation we could all tell an easily understandable story. Our smooth presentation helped us to stand out amongst stiff competition from other schools.