MFin projects at Cambridge Judge Business School

The Equity Research Project offers students the opportunity to work in groups to produce an equity research report on a quoted company, with a valuation, recommendation and analysis of risk.

Good evening. I’d like to make the case for why we strongly believe that Arm presents a great opportunity to establish or add to a holding in Arm. My group was analysing Arm Holdings for the ERP. It produces semiconductor intellectual property.

Our group worked on the British Gas Group. It was a UK-based, publicly listed company.

Today, we are presenting on BG Group, with a buyer recommendation and an intrinsic value of 1650.

We believe that BG will outperform because of its higher exposure to LNG and lack of exposure to refining, which is expected to decline in the next year. We learned about the company from company reports and annual reports. And as a group, we decided what our recommendation was going to be.

We were basically responsible for finding a valuation for Marks and Spencer, and then making a recommendation on whether to buy or sell Marks and Spencer.

I was in charge of looking at the company background, the industry they’re competing in, and also reading broadly about the company, the kind of competitive pressures they were facing in the market.

A series of workshops are delivered before the project takes place. The aim of these workshops is to provide a broader introduction to equity research, valuation, modelling, and the project as a whole.
We did a fully integrated DCF model. And the modelling workshop was obviously very beneficial in being able to do that.

Financial modelling helped quite a bit. We had a workshop before starting the project. And then Simon, the director, went through what are the key points that we should be discussing.

The other modules that we did– so corporate finance, financial reporting and analysis– they all built up to the skills that we needed for the ERP project. So that was a great way to tie all the knowledge in from the first semester, together into one piece.

I don’t think we would have been doing that effectively, had it not been for the financial workshop right before the ERP.
Teams of students are required to deliver a report, which makes an active recommendation to buy or sell a stock and substantiate that recommendation. They are also required to deliver an oral presentation of their argument to an audience, including actual fund managers.

I think the panel were really insightful. The kind of questions they asked were really representative of a real client meeting in an investment recommendation scenario.

Having worked in the industry before, the Q&A with the panel of the ERP was very similar to what you do actually come across in the real world. It was fantastic to have some questions directed at us that we’d spent quite a lot of time thinking about. But then also, on the spot, to have to go back into our work and answer those questions concisely.

I think it provided a good grounding for any other situation where you’re under pressure. You have to present. And you have to be credible. So that was really amazing.

Equity Research is a multi-skilled activity, combining financial accounting, strategic, economic, and communication skills. The ERP has 2 goals. The first is to learn about the various parts of putting an equity recommendation together. The second is to learn about teamwork.

My favourite part of the ERP would have to be just the sheer knowledge that you gain. I think, just being able to look at a company from such an overview was the best experience for me, for sure.

On the one side, it was kind of working with my team members and getting an idea of what they were involved with, and how their working styles were, and kind of learning from them. The other thing I really liked about it was putting into practise some of the stuff that we’ve learned over the course as well, such as the modelling and being able to actually do that for the real world example.

When we’re sitting in class, it’s really quite difficult to get to really understand how people think. And when you come together and work on a challenging project where you need to bring in evaluation skills, communication skills, editing skills, staying up in the middle of the night skills, it really comes together really well. And you learn a lot from people.

With people who come from different backgrounds and such diverse sort of thinking and work experiences, to align on one thing and to agree with it, it’s something that I learned and you know, how to handle different conflicts that happen in a team environment.

I really feel as though we had created something of value, which we would be absolutely comfortable circulating to the investment community, and actually feeling as though you could buy equity in the company with conviction, having done that research yourself.