Dr. P.V. Viswanath

pviswanath@pace.edu

PERC 2009 -- Pace Equity Research Competition

The Pace Equity Research Competition (PERC) is designed to encourage students to develop their equity research report writing skills. The performance of the participants will be taken into account for selection in the Pace team representing the University in the NYSSA Investment Research Challenge (IRC), an area-wide competition, judged by a panel of high-profile experts. For more information on the NYSSA IRC, please click here.

The Details

Analyze the J. Alexander's Corp. (JAX) and write a brief report . The focus of the report should be on the analyst’s (that’s you!) trading recommendation – should the investor buy the stock, hold it (if s/he already owns it) or sell it; this recommendation should be based on a Discounted Cash Flow (DCF) valuation of the stock. The report should discuss your valuation of the stock, including a specific recommendation – buy, sell or hold; and the key factors that led you to your conclusion.

In addition to the valuation of the stock, you should have any one of the additional reports, as below:

• Discussion of the company’s financial situation and prospects
• Industry and Competitive Analysis
• Discussion of the financing (capital structure) -- description and evaluation

The format of the report should be:

• Summary of recommendations
• Explanation of valuation methodology and assumptions
• Details of the valuation
• Additional report (from list above).

You should also include an easy-to-read self-explanatory excel spreadsheet containing the particulars of the DCF valuation of the company -- this should be in the nature of an appendix in addition to your report. Your report should contain references to your valuation appendix (and any other appendices that you wish to attach). Your appendices should not be stand-alone documents; in fact, they should be presented as supporting documents. The entire report (excluding appendices and excel spreadsheet) should consist of no more than three pages (single-spaced).

There are many sources of information about companies, and you are free to use any of them as long as you properly indicate what you have used; however, you should indicate where your data came from. You are also free to consult with any member of the Pace community, both faculty members and students -- however, passing off the work of others as your own is plagiarism and is unacceptable in this competition – you are expected to do your own analysis.

Eligibility Requirements:

• Each submission will be made by an individual, who will certify that the work submitted is primarily the result of his or her efforts.
• Participant should be registered as a graduate or undergraduate student at Pace University during the Fall 2009 semester and should plan to, and be eligible to register for courses during the Spring 2010 semester.
• Participant should be available to work on the NYSSA valuation project during the break between the Fall 2009 and Spring 2010 semester. (Note: you must be physically in the New York metropolitan area during the break.)
• Participants may not be CFA Charterholders.
• Participants may not have worked previously as equity analysts.

Deadlines and other information:

All entries should be submitted electronically by midnight, Thursday, October 8th, 2009 to pviswanath@pace.edu. Please register with Prof. PV Viswanath as soon as possible by emailing him at pviswanath@pace.edu. Entries will be judged by financial analysts and finance faculty. Each complete entry will be returned with comments from one or more judges. Entries will be judged on several factors – originality, quality of writing, perceptiveness and strength of financial analysis.
Selected entrants will be called back for oral interviews. These entrants will have a chance of being selected for the Pace team participating in the Seventh NYSSA Investment Research Challenge.

You may use the materials below to get some idea of what a research report should be like, and what it should contain. Keep in mind, however, that the requirements of PERC are not the same as what would be needed in a general research report. In particular, the format required here is much shorter.

There will be several workshops offered both at Pace and at NYSSA to help PERC participants. Click here for more information.

Materials of Interest

• Workshops for participants
• Video of the workshop on research report writing conducted at Pace University, Oct. 23, 2006
• Useful links on valuation
  • My notes on Valuation
  • Aswath Damodaran's site
• Winning report from PERC 2002 (this was also the team that won the NYSSA IRC!)
• The research report that won the NYSSA IRC award in 2003
• Template used by PERC 2004 Winning Team for the NYSSA IRC Competition
• Report prepared by the PERC 2004 Winning Team for the NYSSA IRC Competition
  Important Note for students from Haroon Chaudrey of the Winning Team:
  Don't take this model as a generic model. It was developed for SYM at some particular time. It was never updated after the competition so all the assumptions are based on notes of then latest filings. Just look at the design and develop you own model as per the requirements of your assumptions and how things are specified in SEC filings.