Stock Pitches

Update: Stock Pitch Template for the MBA Crowd

Last year while applying to USC’s Student Investment Fund, I put my stock pitch on my site to be used as a template by others.  Admittedly, that model was a bit of a hackjob given my time constraint.  But thankfully it was good enough to help me get into the Student Investment Fund (I now co-manage the California Small Cap Fund).

I recently created an updated stock pitch template for my SIF classmates at the request of Professor Ku based on my valuation background.  Here is the new Excel valuation template.  This model is much simpler, and it does a better job with sensitivity analyses.  If you are going to use this model for a pitch, I would recommend creating a revenue build sheet to build up to forecasted sales.  This will show your interviewer that you know the business’s revenue model. (more…)

A Stock Pitch Template for the MBA Crowd

Update 4/19/11:  I got accepted to the Student Investment Fund and have an updated stock pitch template here.

Update 10/24/11: Oracle has announced its acquisition of RightNow.

The interview process at most equity focused buyside shops (e.g. mutual funds or hedge funds) require a “stock pitch”.  In my case, the need for a stock pitch was heightened by my application to the USC Student Investment Fund (the “SIF”), which is an academic program that gives portfolio management and stock picking responsibilities to current MBA students.  Student managers oversee approximately $4 million of the USC endowment.  Whether for the SIF or a buyside interview, the line of questioning goes the same way, interviewers will say, “Tell me about a stock you have been following and why it’s a buy?”.

Answering this question is as much a sales job as it is an analysis of a company’s market and financial performance.  Below is my pitch.  And here is the Word document and Excel file. If you would like, feel free to use these as a template for your own interview prep with a few caveats: 1) the revenue build is pretty weak in this model; you may want to do a better job a building a revenue sheet that shows average selling price * volume, 2) the working capital and depreciation figures could be more precise; this is more of a banker “swag” than equity analyst build using A/R and A/P turns, 3) beware of the deferred revenue adjustment in the working capital calculation; it’s a complex issue and this model only captures part of the issue correctly (hey, give me a break, I was in a rush when I built this!!); and 4) the write-up is nearly 2 pages; I think it’s best if you can fit all of the topics onto one page. (more…)