CFA Society Melbourne

CFA Society Melbourne 2016 Research Challenge – A Winner’s Perspective

Written by the Monash University team (Dulan Lalintha Dantanarayana, Jacob Frydenberg, Simeon Khaw, Chaitanya Krishna Tata & Yostina Bada)

The 2016 CFA Institute Research Challenge was a thoroughly rewarding and challenging experience for the Monash University team. The initial stages of the challenge were tough, since the group was scattered all over the globe for various reasons, however once the competition started and we were given our target company, Nufarm, it was down to work. Early in the competition, the team did not know what to expect, so the guidance given in the initial stages of the competition by Claire Thornton and the other CFA representatives was incredibly valuable. We were given access to some great tools such as Capital IQ and some skills sessions regarding Ethics and Thinking outside the box.

Following these training sessions, the team started research on Nufarm, preparing for a meet and greet session with Mark Keating (Head of Investor Relations) and Paul Binfield (CFO). During the session we were given an investor presentation, as well as the opportunity to ask several questions we had regarding the company. This was a rewarding experience, giving the team great exposure to some senior financial minds, as well as valuable insight into the company and industry. This meeting was incredibly valuable, with the responses to several of our questions shaping our own expectations over the major operating segments of Nufarm, and combined with our analysis of the financial reports, formed a large basis for our valuation of Nufarm.

CFA also provided the team with an industry mentor, Tina Yu of Invesco, who was great in providing insight into how to structure and prepare the report. In particular, the advice that was given following the submission of our draft report was particularly vital, almost completely changing the structure and focus of the report, before the final submission. From the start of the competition, the team was given two months to complete our report and (un)lucky for us, the Financial Results were released three days before the report was due, meaning it was a hectic last couple of days trying to incorporate all of this new information into our report, however the team worked extremely well to put together a strong report.

Following the submission of the report, we had to present to a board of judges selected by CFA, as well as Mark Keating of Nufarm. We knew the presentation would be challenging, with the team from the University of Melbourne quite strong, and the University of Melbourne being the previous winners – however, we remained confident in our ability and knowledge of the company. Luckily, we got to present first in the local round, giving us the opportunity to watch the presentations of all the teams participating. It was interesting to see the various different methodologies used by the teams to value the same company, and the different expectations of company performance moving forward.

It was a great experience to be able to present our report confidently to the panel, particularly given our hold recommendation, which is usually deemed as taking the safe option, and it was pleasing to hear that our team participation distinguished us from the others. When we were announced as winners of the local round, representing CFA Society Melbourne at the Asia-Pacific Regionals in Bangkok in 2017, we were simultaneously excited for the challenge ahead, as well as relieved that all the hard work and late nights over the past 3 months had paid off.

In reaching the Asia-Pacific regionals, the team was excited to compete against the best in the world, and get to meet some of the sharpest minds and develop our networks at this young stage of our careers. It was a truly remarkable event, being hosted at the Westin, being pampered by CFA was a treat. We were also treated to some truly memorable and inspiring speeches from CFA members, in particular about how to learn from our failures and the importance of persistence. It was a truly engaging and memorable introduction to the regionals, motivating all the teams for the presentations the next morning. Following a few nights of preparation and practice, asking each other all of the questions we could think of, and becoming sick of the Nufarm name, it was our turn to present in the APAC Regional Semi-Finals. We felt that our presentation was definitely stronger than the local finals, but we knew that the competition would be much stiffer in this round.

Following our presentation, we were disappointed to hear that we would not progress to the next round of the competition, however we were extremely proud of all the work that had gone into the CFA Investment Challenge, and even getting to represent CFA Society Melbourne in Thailand was a great honour. The team then got to see the Asia-Pacific Regional Finals, and to no surprise, the standard of the presentations was exceptionally high. We were blown away with how much preparation and practice had gone into these presentations, and it was clear that the winning team from Singapore was a cut above the rest.

The team learnt an exceptional amount, about Nufarm, Equity Research, the CFA Society and about the Financial industry as a whole, and would highly recommend the challenge for anyone interested in Equity Research or Finance as a career. Overall, the CFA Investment Challenge 2016 was an exceptional experience, one that was full of challenges, surprises and hard work, but was thoroughly enjoyable and beneficial, and wouldn’t have been possible without the support from our Academic, Industry and CFA Mentors.