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Conclusion to a fierce competition hosted by CFA Society Chicago was held Feb 28, 2020, as one of over 100 local competitions comprising the 2020 CFA Institute Research Challenge (the “Challenge”). This Local Level Challenge was waged at Morningstar with nine teams presenting their research to a panel of judges before managing an intense round of questions about their work. In the end, Illinois Institute of Technology emerged on top earning the right to represent CFA Society of Chicago in the Americas Regional competition, with promotion to the Global Finals as the next objective.

More than just an annual global competition amongst teams of college students, the Challenge is an educational initiative that promotes best practices in equity research while grooming the next generation of financial analysts. Truly a worldwide event, the 2019 Challenge included 95 countries and territories with more than 6,100 students of 1,150 universities participating in 117 CFA Local Level Challenges. Enabling the Challenge to become such a success were more than 4,000 volunteers.

The Challenge dates back to 2007. Past winners of the Global Challenge (with the local CFA Societies represented) are: Babson College (Boston), Hong Kong Baptist University (Hong Kong), Nanyang Technological University (Singapore),  University of the Philippines Diliman (Philippines and the only two time winners in both 2010 and 2014), Politecnico di Milano (Italy), Thammasat University (Thailand), Wroclaw University of Economics (Poland), Canisius College (CFA Society Buffalo and CFA Society Rochester), University of Waterloo (CFA Society Ottawa and CFA Society Toronto), Barna Business School (representing the CFA Institute Research Challenge in Central America), University of Lausanne (Switzerland), and Ateneo de Manila University (Philippines).

Each team consists of at least 3 and up to 5 members who must be enrolled as either undergraduate or graduate students of their college. For the 2020 local level Challenge, CFA Society Chicago chose Ulta Beauty Inc. as the feature company. Each team provided a written report containing their financial analysis of Ulta before advancing to the presentation phase of the competition.

Written reports were scored based on a comprehensive view of Ulta’s business including description of the business, industry overview, competitive positioning, investment summary, valuation, financial analysis, investment risks and corporate governance.

Presentations were evaluated on the thoroughness of each team’s analysis of the industry, company, and competitors, were the valuation methodologies appropriate and detailed, how effective/convincing was their presentation, team involvement in both the presentation and Q&A, quality of materials and slides, their ability to answer the questions effectively and with confidence, and overall was it logical and did the facts support the recommendation?

Much appreciation is due to Deborah Koch, CFA, Larry Lonis, CFA, and Maura Murrihy, CFA, for all their work in putting together the competition along with those volunteering to judge the local 2020 Chicago competition: Joe Bormann, CFA, Erin Lash, CFA, John Leo, CFA, Alan Meder, CFA, and Kwesi Smith, CFA.

As the master of ceremonies Maura Murrihy, CFA, made an observation about working in equity research, suggesting that one has to like puzzles, that analyst work is all about doing the research and unravelling the story. At the end of the day it was very enlightening to hear nine unique approaches and perspectives on Ulta’s business. As one might expect, the target valuations and recommendations spanned the entire spectrum from buy to sell.

The nine schools represented, listed in the order of presentation were: 

  • Augustana College
  • Benedictine University
  • DePaul University
  • Illinois Institute of Technology
  • Loyola University
  • Northern Illinois University
  • Olivet University
  • University of Chicago
  • University of Illinois Urbana Champaign

In the end the top three finishers were selected:   

  • 1st Place – Team Balanced Fund from Illinois Institute of Technology
  • 2nd Place – Team Appreciation from Augustana College
  • 3rd Place – Team Diversification from Northern Illinois University

Gift cards were awarded to each member of the top 3 teams.

Congratulations to the Illinois Institute of Technology Stuart School of Business under the guidance of advisor Michael Rybak, CFA. They will now represent CFA Society Chicago in the Americas Regional level of the Challenge.

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