Emerging Market Fund: Winter 2014 Summary


Winter term proved to be a challenging investment climate for the UO EMF team as emerging markets experienced a volatile start to 2014. When classes began in January our benchmark, the MSCI Emerging Markets (EEM) was at $39.57 per share. It subsequently fell to a low of  $37.78 on January 29th before finishing the term with a strong rally, ending at $41.01 on March 31st.  The volatility also affected our portfolio as we followed a similar trend as the EEM, losing value early in the year and recovering as the semester came to a close.


At the beginning of the semester our fund had returned 11.08% for the holding period (12.73% in equities return) versus our benchmarks return of 0.99%. The following shows the makeup of our portfolio at the start of the first week of winter term:

Compare this to our portfolio at the end of the term:

Sector Allocation

The group took steps to better diversify our fund by trying to get a more consistent sector allocation. Although it is difficult for us to invest in financial firms due to regulations in our bylaws, we still wanted to try our best to match our benchmarks sector allocation. Below is a table of both our portfolios weight per sector, as well as our benchmarks weight.

Portfolio Activity

This semester marked one of the first times where our fund was strapped for cash and needed to sell off some of our holdings in order to purchase more stocks. It ended up working out well as many of our updated stocks proved to be overvalued, signaling it was time to sell. This term we sold our holdings in SK Telecom, Sterlite Industries, and Tencent Holdings.

In addition to the stocks we sold, we also added a few stocks to the portfolio this term. This included Melco Crown Entertainment, Infosys Limited ADR, and China Cord Blood Corp.

Stocks that were pitched but didn’t get purchased this term were Ever Groly, BYD, Silicon Motion, Air China, and Gravity.

Be sure to keep checking in to see how our performance is during the spring term!


Written by

Ryan Strub is a second year MBA student in the Finance and Securities Analysis Center. He currently works as an Acquisitions Analyst for ScanlanKemperBard Companies, a Portland based real estate merchant banker. Ryan plans on developing socially responsible communities upon graduation.

Jim Patricelli, “A Walk Down Wall Street: Then and Now”

Jim Patricelli, a UO alum, came to campus to speak with students in the Finance and Securities Analysis Center (FSAC) about his career on Wall Street, and recent move back to the Portland area. After graduating with a degree in finance in 1990, Patricelli bounced around from Los Angeles to San Francisco before eventually ending up on Wall Street in the mid 1990’s.

Patricelli explained the excitement of working on The Street during the frenzy of the tech revolution and subsequent bursting of its bubble. His opportunity came in the health care sector where he worked diligently researching firms in a sector that was benefiting greatly from the technological innovations coming from the Bay Area. Using fundamental investment strategies, Patricelli was able to make a name for himself investing in undervalued firms such as Cardinal Health.

For Patricelli, life remained interesting on Wall Street through the “.com bust” and the expansion of the economy from 2003-2007. Then, in September of 2008 following the collapse of Lehman Brothers, Wall Street was turned upside down. Patricelli described the awkwardness of coming into work and having nothing to do. Fundamental investment strategies were no longer applicable as the markets were suffering from volatility on a scale never seen before. It wasn’t uncommon to see the Dow Jones up 5% by breakfast and then down 5% after lunch.

Patricelli was able to make it out of 2008, performing substantially better than the average analyst but was beginning to get tired of the three hour daily commutes and volatility that life on Wall Street brought. He stayed on the East coast for a few more years before moving to the Portland area to start a shop of his own: Lakeview Capital Advisors. He has been enjoying his time back in the Pacific Northwest and is excited to continue his new adventure and spending time with his wife and three children.

Thanks for visiting Jim!

Written by

Ryan Strub is a second year MBA student in the Finance and Securities Analysis Center. He currently works as an Acquisitions Analyst for ScanlanKemperBard Companies, a Portland based real estate merchant banker. Ryan plans on developing socially responsible communities upon graduation.

EMF Review: October 30th, 2013

The UO EMF fund was affected by the overall poor performance of the global economy losing 1.01% on the week. This was 0.75% worse than the MSCI EM fund (our benchmark), which lost 0.26% for the week. Overall, the fund has an annualized return of 10.24% (20.15% for the holding period), well above the MSCI EM fund’s annualized performance of 3.80% (7.27% for the holding period).

The individual stocks within the fund performed relatively consistently (albeit negative) over the past week with the vast majority gaining or losing less than 1%. The few outliers included Mercadolibre Inc., SK Telecom, and Anglogold Ashanti LTD, which lost 4.92%, 2.87% and 2.56% respectively.



Our recent purchases of gold mining firms Gold Fields LTD, and Anglogold Ashanti LTD have struggled since acquisition. Both stocks were updated this term, Gold Fields by Ryan Strub, and Anglogold by Kyle Spradling. The updated DCF for both stocks were not as strong as the original analysis, primarily due to the decrease in gold prices since their acquisition last spring. Gold prices have recovered over the past several months and we have seen the price of these stocks slowly increase as the price of gold has started to recover. In both cases, our group decided to maintain these stocks in our portfolio, citing various reasons (described below in the Anglogold update).

NEW PITCH: Dr. Reddy’s Laboratories Limited (RDY) – Haruka Abe

Dr. Reddy’s Laboratories is India’s second-largest pharmaceutical company next to Ranbaxy. It was established by Dr. K. Anji Reddy as a private company in 1984, going public the following year.  RDY has a strong presence in highly regulated markets such as the United States, the United Kingdom, and Germany, as well as other key markets such as India, Russia, Venezuela, Romania, and South Africa. The firm derives its revenue from the sale of finished dosage forms, active pharmaceutical ingredients and intermediates, development and manufacturing services provided to innovative pharmaceutical and biotechnology companies, and licensing fees from marketing authorizations for its products.



The class saw a lot of advantages in purchasing a firm like RDY. Kyle Spradling noted that Haruka’s DCF was very conservative in her assumptions and the stock still appeared to be undervalued based on the analysis. Shu Zhu thought that a pharmaceutical firm would bode well for diversification as we currently lack the presence of one in our portfolio. Analyst Matt Justice liked the high profit margins of the firm and was impressed that the margins stayed consistently high even as revenue grew substantially over the past few years. Ryan Strub liked the idea of having a lower beta stock in the portfolio and commented that even in down economies there would still be a strong demand for RDY’s products. Finally, Kyle Worley saw an advantage in investing in the brand of RDY as it is highly recognized in the emerging markets it serves.


As with any stock, RDY poses many risks that need to be considered when we contemplate adding it to the portfolio. Kyle Spradling was quick to point out that the firm grew quickly in recent years but it did not have a long history of growth, which may not be sustained in future years. Shu Zhu piggybacked on Kyle’s comment and noted that it was difficult to pinpoint where the drastic spike in revenue was derived from. Matt Justice was also concerned that the products that RDY specializes in are generic drugs that were easy to duplicate and thus the firm could be at risk of being undercut.

UPDATE: Anglo Gold Ashanti – Kyle Spradling

Anglo gold was purchased last spring along with our other gold mining firm, Gold Fields LTD. Immediately after the acquisition the stock price fell but since has been recovering, which started around that the time of the Q2 report. Additionally, gold prices continued to fall after the acquisition, dragging the stock price down with them. As gold began to recover, Anglo Gold also saw an increase but at a much slower rate than the commodity.

Some good notes from the Q2 report brought a sense of confidence in the stock as the new CEO’s strategic plans are beginning to pay off. These changes were geared toward shareholder satisfaction and included a massive debt restructuring that would increase annual payments but do so in a less volatile manner.



Analysts in the fund were still optimistic about the stock and thought that the decrease in gold prices as of late was in part due to the dumping of gold as a safe investment tool during the recession. This practice has been reduced by 50%, dropping the demand for gold and ultimately lowering the price. Additionally, the forecast for gold demand looks promising as it is being used in more high technology products as of late, something that hasn’t been done in the past. Finally, Anglo gold is opening new gold mines that will reduce the cost of gold down to $630/oz. Compare this to their current cost of $898/oz.


As a firm that is highly dependent on the price of a commodity, Anglo Gold does pose many risks for investors. First, it is hard to determine what the firm is doing to hedge their risk against the price of gold declining. Additionally, the forecasts that are in our DCF assume that gold is undervalued at this time. If this is incorrect and gold prices have yet to bottom out, our analysis could suffer. Even if gold prices do recover, but not up to the levels of our expectations, the stock could still be overvalued.


Our fund had one of its first unanimous decisions in the two-year holding period, electing to buy RDY and hold Anglo Gold. Both presented an upside that was hard to ignore. The conservative assumptions in RDY left a lot of room for error before the stock would have been overvalued, and the funds bullish stance on gold prices made it easy to select a hold for Anglo Gold.

Do you agree or disagree with our analysis? Keep checking back for updates on these stocks and more, and feel free to reach out for more detailed analysis including our DCFs, and portfolio reports.

Written by

Ryan Strub is a second year MBA student in the Finance and Securities Analysis Center. He currently works as an Acquisitions Analyst for ScanlanKemperBard Companies, a Portland based real estate merchant banker. Ryan plans on developing socially responsible communities upon graduation.

Change starts here…

Change starts here…

Change starts here. A simple yet powerful theme for the 2013 Net Impact Conference in Silicon Valley. For three days, thousands of like-minded agents of change from every industry flocked to San Jose to share ideas, and showcase the possibilities of socially responsible business practices. The conference afforded students the opportunity to study a vast array of innovations in the field of sustainability. They were also able to connect with fellow students and professionals who utilize their careers to make positive change in the world.

The University of Oregon’s Net Impact Chapter brought 24 aspiring business leaders to the conference to add to our understanding of how we can play a role in this important movement. The Conference presented a rare opportunity to combine all four centers of the Lundquist College of Business (Center for Sustainable Business Practices, Finance and Securities Analysis Center, Lundquist Center of Entrepreneurship, Warsaw Sports Marketing Center) to collaborate over a shared passion of the University of Oregon: sustainability. The 2013-2014 Net Impact Chapter has some big shoes to fill as the chapter has been labeled “Gold” for years now. To continue a strong tradition, this year’s group hosted a West Coast Mixer the first night of the conference to meet with fellow attendees early and make connections that would enrich the experience of the conference. The mixer was a success with many members staying in touch throughout the conference.

Sustainability isn’t just apart of the curriculum at the U of O, it is apart of our DNA. It is a common thread that connects all students at the Lundquist College of Business and it was great to share our passion with other programs from across the country. From impact investing to supply chain issues, the Net Impact Conference offered something of interest to all stewards of responsible business practices. Want to know more?  Take a look at what some of the students had to say:

Andy Eastoe, Warsaw, Class of 2015

One of the more inspiring conversations at the conference was during the Hult Prize session. The Hult Prize is a start-up accelerator for social entrepreneurship. Teams of 4-5 students were tasked with a problem and asked to help solve it. Teams then presented their ideas to a panel of judges. The winning group was awarded a one million dollar “seed” to begin their newly created company. The 2013 winner spoke to us about his idea of insect farming as a way to solve the current food shortages in the slums.  While business is often blamed for exacerbating problems in 3rd world countries, it was great to see social entrepreneurship providing real solutions for those in need.  For more information, visit

Blake Thompson, CSBP, Class of 2015

My favorite aspect about the entire conference was the variety of businesses that where there.  You had small tech start-ups, solar companies, food start-ups and large corporations like Dow chemical and Campbell’s soup.  This gave me an insight and opened my eyes to a lot of areas in sustainability that I did not know existed. I am also encouraged that there are so many people in a variety of industries who are trying to spread the word of sustainability and make a difference.

Dayn Hardie, CSBP, Class of 2015

I took a lot from Net Impact. Since it was my first sustainability conference and in the past sustainability had only been an area I explored based on my own interests, I thought it was great to see how much businesses, of all sizes, were doing to promote a sustainable agenda. I learned that you don’t have to create a whole new business based on sustainability, but you can implement sustainable solutions into an existing business to address any issues you might have have an interest in curing. My favorite part was the farm-to-table round table breakout session.

Benjamin Slutz, Undergraduate

The NI13 Conference was a tremendous opportunity for a highly motivated undergraduate student like myself. I went in with a plan (grow my network of people I’d like the privilege to work with) and pursued it with a joyful tenacity that only the hundreds of buzzing MBA minds could assuage. I made 30+ new relationships, all of which I’ve made the point to follow up on so as to secure their future integrity. It was a pleasure to engage so actively with people of such diverse experience. I would love to go again in the future.

Tristan Oker, OLIS Graduate Student

Being a guest at the Net Impact 2013 conference was a delight! I found that although I was an OLIS grad student in a sea of MBA students the climate was not as foreign as I had thought it would be. The Net Impacters took me in as one of their own and made me feel at ease in a place where I didn’t speak the language (of business) or fully understand the culture. I found that some of the most beneficial features of the conference were the career development workshops that taught how to navigate in the emerging industry of sustainable business. Aside from the tangible, the keynote speakers were wonderful. I especially enjoyed the back and forth between the representatives of Sierra Club and Exxon Mobile, it was a great way to start the day. Overall, being around such exciting and positive energy has recharged me as I look to the future of sustainable business initiatives.

Haruka Abe, FSAC, Class of 2014

The keynote on the very first day was a good way to kick off the conference and get energized. Caryl M. Stern talked about her great life story to save children all over the world. It inspired me and makes me think about what I can do to inspire change. Thanks to her inspiring speech I actively sought ideas about how I can make change throughout my career, instead of listening to each breakout seminar passively. I look forward to bringing all the inspiration back to the MBA program.

Kate Kostal, Warsaw, Class of 2015

Though I am in a different center I found Net Impact to be eye opening. The sheer volume of breakout sessions was inspiring by itself. There were many themes in different presentations that transcend center focus, which made missing College Gameday easier to take. I particularly enjoyed learning how profitability, intelligence, and sound planning were valued almost as much as passion for sustainability. It shifted my view of green initiatives.

Shawn Ohki, Undergraduate

As an undergraduate student taking his first upper division business courses this term, I headed into the Net Impact National Conference with the intent to absorb as much knowledge and insight as I could. Not only did I learn a great deal about how corporations are practicing sustainability, I also experienced what it felt like to be surrounded by sharp-minded, driven individuals from all over the country in a professional environment. The most memorable experience was having dinner with a Silicon Valley entrepreneur in the app industry and a New York City banker as they had a heated debate on the future of China’s sustainability efforts. The conference allowed me to come in contact and network with professionals and students who are leading the charge in this growing field of business.

The University of Oregon is already looking forward to next year’s conference!



Written by

Ryan Strub is a second year MBA student in the Finance and Securities Analysis Center. He currently works as an Acquisitions Analyst for ScanlanKemperBard Companies, a Portland based real estate merchant banker. Ryan plans on developing socially responsible communities upon graduation.

FSAC Emerging Market Fund: Oct. 23rd Review


The FSAC Emerging Market Fund is an investment portfolio that is actively managed by MBA students through an experiential learning class. The fund began through a generous donation of $200,000 from alumni and board members who thought the practice of managing a portfolio would be a valuable learning experience for future professionals. Each week a recap of the fund’s performance is given by the portfolio manager, followed by an update of a stock currently in the portfolio, and a pitch for a stock to be added to the portfolio.

Students vote on each pitch, both updates and new pitches, to see if it will be in the portfolio the following week. Each semester weaknesses in the portfolio are identified and addressed so students know what firms to look at for future pitches. Weaknesses include a lack of certain industries, geographic locations, or riskiness.

The fund is benchmarked against the MSCI EM fund, a diverse fund containing assets from our targeted countries. The benchmark is also included in our portfolio and offers a good example for ways to diversify our portfolio.

October 23rd Recap:

The student-run EMF fund experienced another week of steady growth, posting a weekly gain of 2.32%. The return for the blend of stocks (the fund excluding cash and the MSCI EM Index) was even higher at 2.59%. This brings our total return for the holding period to 21.31%, or 10.92% annualized.

Tencent Holdings continues to be the star performer of the fund with a 113.88% return over the holding period. Anglogold Ashanti LTD posted the biggest gain of the week returning 16.87%. However, the stock has not performed well since it was acquired last spring, down 10.46% in the period. Sterlite Industries also saw substantial returns, ending the week up 7.32%.  China Nat. Offshore Oil Corp. and Taiwan Semiconductor took the biggest hit this week dropping 3.50% and 2.98% respectively.

Below is a detailed breakdown of the funds performance:

New Pitch: ICICI Bank Ltd

Analyst Matt Justice presented a new pitch for ICICI Bank Ltd. (ICICI), the largest private sector bank in India in terms of assets. The bank is headquartered in Mumai, Maharashtra and has over 62,000 employees. ICICI offers commercial banking for retail customers, insurance, treasury operations, and venture capital services and private equity fund management.

A debate ensued with analysts weighing the pros and cons of buying ICICI. James Ball noted that the DCF was thorough and provided sufficient details that instilled confidence in Matt’s forecasts. Kang Zhang noted that the potential acquisition would bode well for diversification, as it would be our only financial institution in the portfolio. (NOTE: currently our fund’s bylaws restrict us from purchasing financial institutions, a rule that is being sent to the board to change). Kyle Worley stated that the timing seemed right considering the growing middle class in India and the potential for large growth.

In contrast, Haruka Abe noted that the finance industry is volatile, India is volatile, and there is an unknown ownership team. These all pose substantial risks in investing in a business of this nature. Additionally, because the firm is tied to India’s currency, inflation in India will greatly affect the actual cash flows of the business. Ryan Strub also noted that the group is not familiar with investing in India’s economy, which could present difficult challenges in forecasting growth rates.

Our team decided that it was best to postpone a vote on ICICI until we go through the process of changing the bylaws to allow financial firms in our portfolio. Once this is done, an updated DCF will be required and a re-vote will take place.

Written by

Ryan Strub is a second year MBA student in the Finance and Securities Analysis Center. He currently works as an Acquisitions Analyst for ScanlanKemperBard Companies, a Portland based real estate merchant banker. Ryan plans on developing socially responsible communities upon graduation.