A Penn State Behrend student investment team won the Chartered Financial Analyst (CFA) Society Pittsburgh Research Challenge. The team presented a financial analysis - and a "buy" recommendation - for Howmet Aerospace, which produces engines, airfoils and vacuum-melted superalloys.
During a presentation at the Rivers Club in Pittsburgh, and in a report that analyzed Howmet's market share, governance and growth drivers, among other factors, the Behrend team - Coty Dolan, William Falquez, Eli Karnavas, Ana Jacomini Sirotinin and Cayson Woodley - described Howmet as a "focused, high-margin aerospace supplier." They predicted the company's stock will reach $241 in the next 12 months, which is a 15.5% increase from the price-per-share on Feb. 4.
Teams from the University of Pittsburgh, West Virginia University, Penn State University Park, PennWest University and Robert Morris University also competed at the event.
The Behrend team now advances to the sub-regional round, which will include teams from Loyola University, Seton Hall University, Villanova University and the University of Connecticut. The winner will be announced on March 26.
The CFA Institute started the global research challenge in 2006. Teams are paired with an industry mentor, who can provide up to six hours of advice, and meet with top executives of the company during a due-diligence session for financial analysts.
More than 1,100 universities participate in the competition, which is organized by more than 120 CFA Institute societies.
Greg Filbeck, vice chancellor and associate dean of academic affairs, served as the team's adviser. The focus on an individual company helps students apply their learning and produce an equity valuation in the same way a financial analyst would, he said.
"The knowledge our students gain from this is invaluable," he said. "They basically have done everything they will need to do to perform in industry, and they have a showpiece that they can take forward as they begin to interview for positions."
Sirotinin, a Penn State World Campus student from Florida, served as the captain of the Behrend team. She and the other team members each invested more than 100 hours into the project.
"At times, it definitely felt like more," she said.
Preparing the report helped her better understand the concepts she learned in class, she said.
"This project put everything into perspective," she said. "There is something about working through a financial model that makes the concepts much clearer than simply reading about how to discount a company's cash flows."
Karnavas, a senior from Glenshaw, agreed.
"Getting to do a deep dive on one company gave the work real impact," he said. "We were able to apply all the skills we have learned, like accounting, economics, geopolitics and finance. That was something I really enjoyed."
