Business students have won local and regional titles in the CFA Investment Research Challenge and have reached the highest level of any team at the university’s Orfalea College of Business.
SAN LUIS OBISPO — A detailed analysis of PayPal’s stock outlook, along with a sell recommendation, helped a team of Cal Poly finance students outperform hundreds of others recently in the Chartered Financial Analyst Institute Research Challenge.
Competing against more than 900 schools in North, Central and South America, the Cal Poly team was one of only 17 to advance to the Americas semifinals held this month, after winning local and sub-regional stages. The global competition includes more than 5,000 undergraduate and graduate students from universities in over 91 countries. Students are tested on their analysis, evaluation, report writing and presentation skills.
For the competition, students were tasked with performing an analysis of PayPal, a San Jose-based company providing financial transaction processing services. The team spent five months compiling a report – which included information on PayPal’s business model, industry insight, risks and more – before recommending the sale of PayPal stock, predicting that its value would decline by more than 12% in one year.
“Building this report may be one of the most challenging and extensive projects we’ve ever worked on,” said team captain Alexandra Joelson of San Diego. “We were confined to 10 main pages and 10 appendix pages. While that might seem like a lot, we had so much research and analysis, and it was hard to stick to that page limit.
The team also included: Cameron Wong and Dominic Juliano, both of San Francisco; Samuel Paik, of Orinda, California; and Walnut Creek, Calif., resident Shingo O’Flaherty.
“Early on, our team members identified the skills and talents of each individual,” said Cyrus Ramezani, Academic Advisor, Professor of Finance at Orfalea College of Business. “They then divided the work and specialized to be more efficient. It’s the closest our students can get to a real-world experience. It is also one of the best examples of our Learn by Doing mantra at Orfalea College of Business.
Scott B. Kirk, a Cal Poly alumnus (Business Administration, Financial Management, 2005), also served as a team advisor.
Once assigned tasks, the team researched PayPal, its market and revenue drivers, then worked as a team to develop a detailed financial model, write a comprehensive report and prepare their presentations.
“This financial model helped us find key findings that could drive our sales story,” Joelson said.
This story, Ramezani said, was delivered in a well-written and carefully developed report — with extensive use of charts and tables — that could be used by portfolio managers to make investment decisions.
“Students also created a complete slide deck and gave several presentations to industry professionals (the judges),” he said. “They are expected to clearly present and defend their analysis and investment recommendation.”
According to their research, PayPal’s competitors include Apple Pay, Google Pay and Zelle, a digital payment network backed by financial institutions such as Bank of America, Capital One, JPMorgan Chase and Wells Fargo.
PayPal’s current population is largely made up of consumers between the ages of 35 and 55. While the company has benefited from the shift to online shopping, particularly during the pandemic, the encroachment of powerful competitors, rising interest rates and inflation, and geopolitical risk are all contributing to a stock market future. questionable, the team concluded.
As the project lasted several months, this analysis was subject to change. The report even refers to the 2-month war in Ukraine, which started during the project.
“It was extremely difficult to update our presentation due to market volatility and constantly fluctuating PayPal news,” Joelson said. “The team laid out a clear plan of what we wanted to update to ensure we had the most up-to-date and accurate presentation possible.”
After winning the local competition in San Francisco (16 teams), the team also advanced from the US West round to the Americas semi-finals. Cal Poly did not qualify for the Americas Finals, which will take place on April 28.
“The competition is extremely competitive in the semi-finals, and we may have been knocked out by a fraction of a point,” Ramezani said. “Still, this is the first time our students have reached this level, and we are proud of the work our team has completed.
The project provided students with important skills that will prepare them for future careers, Joelson said.
“This experience felt like a real project because we had to keep up to date with the market all the time.”
Photo Info: A team of five Orfalea College of Business students have advanced to the next stage of the Chartered Financial Analyst Institute’s 2021-22 Research Challenge. Finance students, left to right, Dominic Juliano, Samuel Paik, Alexandra Joelson (team captain), Cameron Wong and Shingo O’Flaherty represented Cal Poly in the annual global competition.
Photo by Austin Ma
Contact: Pat Pemberton
805-235-0555; [email protected]
April 26, 2022
# # #