CFA institute research challenge [in/hosted by] …...Jason Snyder, PhD Rama Malladi, CFA Drucker School of Management, CGU Jay Prag, PhD Anthony Mak, CFA, CPA USC Marshall School

CFA INSTITUTE RESEARCH CHALLENGEIN SOUTHERN CALIFORNIAHOSTED BY THE CFA SOCIETIES OF LOS ANGELES AND ORANGE COUNTY

KICKOFF MEETING – 15 OCTOBER 2012

Nathaniel Downes, CFAAssociate Portfolio Manager

Ryan Buckmaster, CFAAssociate Portfolio Manager

Michael TreidlFinancial Analyst

Chad NooraniInvestment Performance Analyst

CFA SOCIETIES OF LOS ANGELES & ORANGE COUNTY

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CFA Institute is a global association of investment professionals whose mission is to lead the investment profession globally by setting the highest standards of ethics, education, and professional excellence. CFA Institute writes and administers the CFA Examination, the gold standard in investment credentialing, and is a leading voice on issues of fairness, efficiency, and investor protection for global capital markets. CFA Institute is a professional member association of over 100,000 members and 135 member societies in 58 countries globally. CFALA and CFAOC are two in this network promoting the lifelong learning opportunities for the nearly 2000 members and candidates in CFALA and more than 400 members and candidates in CFAOC and the surrounding area. CFA Society of Los Angeles and Orange County is responsible for bringing the CFA Institute Research Challenge to your university.

SPONSOR ACKNOWLEDGMENTWe would like to offer a special thank you to our sponsors for the 2013 CFA Institute Research Challenge in Southern California

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First of all, we’d like to thank our generous sponsors…

2012 GLOBAL CHAMPIONSThammasat University from Bangkok, ThailandRepresenting the CFA Society of Thailand

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“Tell me and I'll forget; show me and I may remember; involve me and I'll understand.” Chinese Proverb Pictured here is the 2012 CFA Institute Research Challenge Champion team representing Thammasat University and the CFA Society of Thailand.

WHAT IS THE CFA INSTITUTE RESEARCH CHALLENGE?• How is it organized?

- Worldwide intercollegiate competition between teams of students

- Organized by local CFA Institute volunteers – usually through CFA member societies

- At least 4 teams of 3-5 students participate

• What does it involve?- Analysis of a publicly-traded

company- Interviews with company

management- Mentoring by a CFA charterholder- Research report writing- Presentation of research

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A local-level Research Challenge is a local, intercollegiate competition sponsored by CFA Institute volunteers – usually through one of CFA Institute’s 130+ member societies. Local competitions invite at least four different universities, each sponsoring a team of 3 to 5 students, to participate. This competition is unique because it promotes best practices, research skills, analysis, report writing, and presentation skills in action. What also makes it unique is what it is NOT. The competition is not based on the performance of a particular stock or portfolio and therefore doesn’t promote short-termism. It does promote how to conduct research ethically, how to analyze the relevant data and develop a recommendation and how to present and defend that recommendation in a professional manner.

2012 RESEARCH CHALLENGE NETWORK

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As part of the local level of the CFA Institute Research Challenge, you are automatically part of a global network of nearly 10,000 undergraduate and graduate students. One of the great aspects of this program is its global reach. The investment industry may seem large due to its globality, however it really isn’t. You are on the right path to integrating with the future leaders of the industry.�

2013 TOURNAMENT DIAGRAM

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90+ LOCAL LEVEL CHALLENGES

APRegional

19 Teams

EMEARegional

25 Teams

AmericasRegional

48 Teams

New York Regional

24 Teams

Global Final

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Advancing through the stages of competition starts at the local level depicted at the bottom of this diagram. Each local challenge produces one winner; CFA Institute sponsors the travel and lodging of that team as they compete in the regional round of competition. This year, the regional competitions will be held in: Asia-Pacific – Kuala Lumpur, February 22, 2013 Americas – Toronto, the week of March 18, 2013 EMEA – London, the week of April 8, 2013 The regional rounds produce one winner; again, CFA Institute sponsors the travel and lodging for the regional winner as they compete in the Global Final. The Global Final will also be held in London, the week of April 8, the day after the EMEA Regional Final.

2012 TOURNAMENT RESULTS

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BENEFITS FOR STUDENTS• Best practices in research and report

writing• Real-life learning experience as an

Equity Analyst• Access and exposure to leading

industry professionals• Professional report and experience to

use on resume/CV and job interviews• Experience presenting to top financial

professionals• Individual and team prizes• Opportunity for travel• Potential for media exposure• Network of over 10,000 students and

2,500 volunteers worldwide

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One of the benefits of participation in the CFA Institute Research Challenge is public recognition. There is great potential to generate awareness when a team wins locally, regionally, and globally. Other great benefits include: Learning best practices in research report writing and presentation skills from a professional mentor Access to a network of top industry professionals Concrete experience and example of your work to provide potential employers – this is a great experience to list on a resume Prizes for the winning teams Travel to the regional competition for local winners (travel and lodging provided by CFA Institute) Travel to the global competition for regional winners (travel and lodging provided by CFA Institute) Media exposure Access to a network of 10,000+ students and 2,500+ volunteers worldwide

PARTICIPATING TEAMS (CFALA)

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University Faculty Advisor MentorCalifornia Polytechnic State, San Luis Obispo

Cyrus Ramezani, PhD TBD

Pepperdine University Edward Fredericks, PhD Michael Wu, CFA

CSU, Dominguez Hills Rama Malladi Christian Sessing, CFA

UCLA Anderson School of Management

Jason Snyder, PhD Rama Malladi, CFA

Drucker School of Management, CGU

Jay Prag, PhD Anthony Mak, CFA, CPA

USC Marshall School of Business Suh-Pyng Ku, PhD Atul Sharma, CFA

Loyola Marymount University Chun Lee, PhD Glen Ferrand, CFA

Occidental College Woody Studenmund, PhD Davy Sim, CFA

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These are the teams that will be competing in the local challenge. At this time we’d like to reveal your industry mentor.

PARTICIPATING TEAMS (CFAOC)

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University Faculty Advisor MentorCalifornia Polytechnic, Pomona Majed Muhtaseb, CFA N/A

California State University, Fullerton Joe Greco Mike Meehan, CFA

California State University, Long Beach Steven Le, PhD Cathy Lloyd, CFA

Claremont McKenna College Eric Hughson Robert Thomas, CFA

University of California, Irvine Todd Richey, CFA Jeff Martin, CFA

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These are the teams that will be competing in the Orange County local challenge. Most of you selected your own industry Mentor. For Pomona, we will have a mentor assigned this week.

COMPETITION TIMELINE

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Today Kick‐Off

TBD (November) Company Presentation

18 January 2013 Register with CFA Institute

N/A* 1st Draft Due to Mentor

01 February 2013 Final Report Due

22 February 2013 Local Final Presentations

20‐21 March 2013 Regional Final

12 April 2013 Global Final

*This date is at the discretion of both the team and mentor.

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It is extremely important that all students register for the competition on CFA Institute’s website. The Registration deadline for both the LA and OC challenges is January 18th, 2013. Once the student is registered, he or she will receive a complimentary electronic copy of Equity Asset Valuation (CFA Institute Investment Series). This registration will also ensure that each student receives a certificate acknowledging his or her participation in the competition.

RULES OVERVIEW• Each team consists of 3-5 students

(undergraduate or graduate)• Only one team may represent each

university• Students must be enrolled in the

university they represent and registered for at least a part-time course load at the time of the kickoff meeting

• Reports and presentations must be the students’ original work

• Students may not have contact with the subject company outside of organized events

• Students may not enlist the help of any professionals other than the mentor or faculty advisor

• Mentors and faculty may NOT contact the company

• Mentors, faculty, and subject company may NOT provide material non-public information

• Written reports must conform to the guidelines set forth by CFA Institute and include the cover and back pages provided by CFA Institute

• Teams may not use props in their oral presentations

• Students, mentors, and faculty must all agree to abide by the CFA Institute Code of Ethics and Standards of Professional Conduct

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These bullet points represent part of the CFA Institute Research Challenge Official Rules. Please read over ALL of the rules before you officially register on CFA Institute’s website. All participants of the challenge must agree to abide by the Official Rules set forth by CFA Institute (Available on CFALA’s website, and will be available on CFAOC’s website by the end of this week…under the Research Challenge tab).

ADVISOR AND MENTOR INVOLVEMENTFaculty Advisor• Insight and guidance on research

methods and tools as taught in academia

• 10 hours maximum of productive time

• Access to faculty for other projects unrelated to the Research Challenge is permitted

• All work must be the original work of the students

Industry Mentor• Insight and guidance on industry

practice• 6 hours maximum of productive time• Face to face or virtual• Company management question

development• Review first draft of research report• Presentation development

assistance

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Students will have access to two experts who will help them develop their research skills, analytical models, and recommendation determination. The Faculty Advisor is the expert on the academic side of equity analysis and other “soft skills” such as effective report-writing and presentation skills. For example, the advisor can work with the students on how to conduct company analysis and how to use different models. The professor cannot do the work for the students and should shy away from giving definitive answers as the work should be the original work of the students. The Industry Mentor is an expert on professional practice and should advise students on how to ask intelligent and probing questions for the company presentation. The mentor will provide context for students to better understand the micro and macro environment as it pertains to their company. The mentor will guide students on the best and most ethical practices in the industry to help them produce a real-world initiation of coverage report and answer questions from experienced practitioners. Again, the mentor must only guide students as they develop their own work. Mentors cannot provide inside information.

ETHICS RESOURCES• Ethical Standards for Investment

Professionals: An Interactive Case-Based Course

• Ethics Course Module 2: Standard II—Integrity of Capital Markets

• Ethics Course Module 3: Standard III—Duties to Clients

• Ethics Course Module 6: Standard VI—Conflicts of Interest

• Ethics Course Module 7: Standard VII—Responsibilities as a CFA Institute Member or CFA Candidate

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Ethics are an integral part of this competition. We expect all participants to abide by the CFA Institute Code of Ethics and Standards of Professional Conduct. Part of the registration process will be to read and agree to the CFA Institute Code of Ethics and Standards of Professional Conduct.

SAMPLE REPORT

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The Written Report must: be no longer than ten (10) pages (not including the front and back covers provided by CFA Institute) on A4 sized paper (8.5”x11”), although you may include an appendix of infinite length; include the following information: Company name Exchange Ticker symbol Sector Industry Recommendation (buy/sell/hold) Current price (as of __date) Target price (% increase/decrease) contain only publicly available information; be the original work of the team members; be prepared from the perspective of an independent research analyst; be submitted to the local-level host by the deadline established by the host; include the front and back covers provided by CFA Institute (teams must fill in the information indicated in highlighted text and may not alter any other part of the covers, including the CFA Institute logo); and contain (but is not limited to*) the following sections: Business Description Industry Overview and Competitive Positioning Investment Summary Valuation Financial Analysis Investment Risks *You may also include other headings that cover important information not otherwise covered in the sections listed above.

REPORT SCORING

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Report scores are determined using this scoring rubric. Graders will also provide short and constructive comments on the reports of all teams.

PRESENTATION SCORING

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SUBJECT COMPANY

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Jacobs Engineering Group Inc. (NYSE: JEC) is one of the world’s largest and most diverse providers of professional technical services. With 2011 revenues of over $10 billion, they offer full-spectrum support to industrial, commercial, and government clients across multiple markets. Services include scientific and specialty consulting as well as all aspects of engineering and construction, and operations and maintenance.

Website: www.jacobs.comFounded: 1947Total Worldwide Employees: 60,000President and CEO: Craig L. Martin

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This is where you can discuss the subject company: what the company does, how the company is structured, and any other relevant information that all teams should know about the company. What to include on this slide: WHAT THEY’LL PROVIDE (MEETINGS, MATERIALS, ETC.) THANK YOU (RECOGNITION)

http://www.jacobs.com/

SUBJECT COMPANY

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Edwards Lifesciences. (NYSE: EW) partners with physicians to innovate products designed to help patients live longer, healthier and more productive lives. They are focused on medical technologies that address large and growing patient populations in which there are significant unmet clinical needs, such as structural heart disease and critical care monitoring.Edwards Technologies are categorized into our four business units - heart valve therapy, critical care, cardiac surgery systems and vascular – each with a rich history and unique patient focus.

Website: www.edwards.comFounded: 2000 (Edwards Laboratories Founded: 1958)Total Worldwide Employees: Approx. 7,000Chairman and CEO: Michael A. Mussallem

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For CFAOC, the Subject Company is Edwards Lifesciences. Edwards Lifesciences partners with physicians to innovate products designed to help patients live longer, healthier and more productive lives. Focused on medical technologies that address large and growing patient populations in which there are significant unmet clinical needs, such as structural heart disease and critical care monitoring.�The four business units within Edwards framework: heart valve therapy, critical care, cardiac surgery systems and vascular Traded on the NYSE under ticker symbol EW We would like to send a special thank you out to Edwards for participating in this competition.

http://www.edwards.com/

INTERACTING WITH JACOBS / EDWARDS• Designated officers ONLY• Organized communications ONLY• Industry mentor or faculty advisor

must be present for all student-subject company interactions

• Students may contact and survey company suppliers, customers, vendors, etc.

• Edwards will meet with the students for a Company presentation, and at that time will provide the teams with an information packet.

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Students may only communicate with the company during the established Company Presentation, and via communication set up by CFAOC. The industry mentor or faculty advisor must be with the students during the Company Presentation. Only the students are allowed to ask questions of the designated officers present; neither the industry mentor nor the faculty advisor may ask questions. Students may NOT interview middle management or other employees of the company. Students may interview and survey suppliers, customers, vendors, competitors, etc. as a normal course of research. Students are also permitted to interact with the company as a customer.

WHERE TO BEGIN• Visit the CFA Institute Research

Challenge website: www.researchchallenge.org- Register for the competition- Peruse educational materials

selected specifically for participants

- Watch videos of past presentations

- View past reports from winning teams

• Students MUST register on the CFA Institute website using the registration form provided by the local host.

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http://www.researchchallenge.org/

QUESTIONS?

CFA Society of Orange County

Ramin Modiri, CFA

Email: [email protected]

Chad Noorani


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If you have additional questions following this webcast, please contact your local host administrators:

CFA Society of Los Angeles

Nathaniel Downes, CFA


mailto:[email protected]



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You can include pictures from your own local challenge here!

Documents

CFA institute research challenge [in/hosted by] …...Jason Snyder, PhD Rama Malladi, CFA Drucker School of Management, CGU Jay Prag, PhD Anthony Mak, CFA, CPA USC Marshall School