Maize And Blue Stock Pitch Competition: Nurturing The Next Generation Of Finance Leaders (CORRECTED)

Editor's note: This story has been updated to correct the spelling of Brooke Wrobel's name. 

As the financial world gears up for an exciting new year, the Maize and Blue Stock Pitch Competition is set to take the stage once again on Feb. 9, 2024.

This competition, rapidly becoming a cornerstone event for the Ross School of Business at the University of Michigan, offers a unique platform for students to showcase their stock analysis abilities and pitch their investment ideas to seasoned professionals.

As one of last year’s distinguished judges, Jordan Hymowitz, Managing Principal/Portfolio Manager at Philadelphia Financial Management of San Francisco and co-founder of the competition, reflects on its inaugural success: “The students were well prepared and their ideas thoroughly researched. I especially enjoyed challenging and questioning the students as I don't think many of them are challenged or prodded on their thesis, and this forced them to defend their ideas or modify them as need be. ... I think the contest has a bright future.”

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What's New in 2024?
The upcoming competition promises an unparalleled opportunity for students to work closely with investment experts, receiving direct feedback on their investment strategies. It's not just about the competition, as the event serves as a fantastic networking opportunity for students and professionals alike.

Proudly sponsored by William Blair & Company, Philadelphia Financial Management of San Francisco, LLC, and Thrivent Financial, this year also brings generous prizes for the winners. $5,000 will be awarded to the student who presents the best investment thesis, with second and third places receiving $2,000 and $1,000, respectively.

The criteria for selecting stocks have been updated for the competition's second year. Students must present their thesis on a U.S. publicly traded company with a market cap of at least $100 million, with at least $2 million of daily volume from October through December 2023.

This means ADRs, ETFs and other securities are ineligible for the competition. Similar to the inaugural competition in 2023, both long and short theses are eligible.

More details about the upcoming event can be found here.

Recap of Last Year’s Performance

In the spirit of the learning process, it is key to reflect on the results of the inaugural competition. Looking back at the previous student picks, here’s how each stock has performed since the pitches were presented (March 24, 2023 to Dec. 27, 2023).

In the context of the paper trading competition, it's worth noting that some students personally held positions in the stocks they chose for the contest. This added an extra layer of real-world relevance to their analysis and presentations, although the competition itself and the rankings were based on theoretical trades and the quality of their investment theses.

Sajiv Shah, Bullish Gray Television GTN: Sajiv was counting on a rebound from previous earnings misses, forecasting the company will benefit from the rapid rise in political advertising spend in current and emerging swing states. Somewhat aligned with the bullish call, the stock has risen +5.6% for the given period.

Brooke Wrobel, Bullish Toll Brothers TOL: Wrobel was anticipating interest rates would stabilize, certain costs would come down, and would benefit from higher-end buyers weathering market conditions better than average homebuyers. Aligned with the bullish call, the stock has risen a stunning +78.1% for the given period.

Francesco De Col, bullish on Masterbrand MBC: De Col thought investors were negatively misunderstanding the housing situation, and he was counting on its diverse product base and history of pricing power along with margin expansion. Aligned with the bullish call, the stock has risen a stellar +108.3% for the given period.

Tejas Gumudavelly, Third Place, bullish on Proto Labs PRLB: Gumudavelly, now the student president of the Maize and Blue fund, forecasted strong cash flow from Proto Labs’ reduced production lag time, along with lower shipping costs from being positioned near its clients in the Northwest and Northeast. Aligned with the bullish call, the stock has risen +27.2% for the given period.

Shrey Dalal, Second Place, bullish on ON Semiconductor ON: Dalal was counting on the company’s product mix and the focus on developing the next generation of chips and had a price target of $105. At about $85, the stock didn’t quite reach the price target (yet), but the stock has still risen +9.3% for the given period.

Taylor Bielefeld, First Place, bearish on WD-40 WDFC: Bielefeld forecasted a decline in sales resulting from the gradual conversion to electric vehicles, which require much less use of WD-40’s main products, and had a price target of $75. At about $241, the stock has distanced itself from his price target, rising +39.5% for the given period.

Given most of the students established bullish theses, they benefited from the broad rise in markets in 2023. 

The Maize and Blue Stock Pitch Competition stands as a testament to the depth and rigor required in stock analysis. While not all predictions may hit the mark, the event underscores the value of comprehensive financial forecasting and provides a practical learning environment for aspiring finance professionals.

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