Budding analysts show winning acumen
A COMPETITION where budding financial analysts decide whether to buy, sell or hold stocks in a publicly traded company has been won by University of Otago students.
The Otago team won the New Zealand edition of the 2020 CFA (Chartered Financial Analysts) Institute Research Challenge and will compete in the Asia Pacific regional competition next year.
All eight of the country’s universities competed. It is the second time Otago has won, the first being in 2016.
The Otago students, coached by the head of the university’s accounting and finance department, Dr
Helen Roberts, spent 12 weeks studying NZXlisted agribusiness Scales before valuing it and then defending that evaluation.
They recommended a hold on the apple orchardist’s stocks with a target price of $5.01 a share.
The team presented on their valuation case for 10 minutes and then faced 10 minutes of questions from the judging panel.
Rosie Jerram was one of the team members and won an additional prize for her contest speech delivery.
She explained their analysis of the company.
‘‘There are some pretty significant risks on the horizon for [Scales] with climate change risk as well as RSE workers not being let into the country, so that is pretty huge for the potential implications of reducing their crop.’’
Ms Jerram said she enjoyed learning about Scales and the agribusiness industry.
‘‘[We were] learning about how some of those industry dynamics work, particularly trade with China, how Covid has affected markets . . . and how businesses can go about being resilient to shocks like Covid.
‘‘It’s a pretty unique experience to be able to value a company at this point in your studies. It’s quite different to what we get to learn in class.’’
The University of Otago team also received support from Contact Energy’s senior corporate finance analyst, Tim Armour.
The Asia Pacific competition will be held in February next year.