Finance and Securities Analysis

FSAC visits Wells Fargo in SFO

The following was written by FSAC Student, Ryan Strub, a member of the Class of 2014

The Finance and Securities Analysis Center’s trip to San Francisco began with a visit to one of the most influential banks in the country, Wells Fargo.  There, Erik Bidenkap and Mike Niedermeyer, a University of Oregon alumnus, were kind enough to host our group for an informative discussion which touched on a variety of banking topics.  Mr. Niedermeyer began with a brief overview of the company and detailed the different segments that the firm is comprised of.  He also explained how they have grown since their acquisition of Wachovia, which doubled the size of Wells Fargo.

Perhaps even more interesting to a group of debt-stricken students was Mr. Bidenkap’s synopsis of internships and careers at Wells Fargo.  Wells Fargo is an active recruiter of business students at the University of Oregon and has programs set up to train and develop employees so they can reach their maximum career potential. The list of prominent UO alumni also includes Mark Myers who leads over 1,000 employees in the bank’s real estate lending services group.

Mr. Niedermeyer then opened the floor up for students to ask any questions they had pertaining to investments and banking.  With a diverse composition of industry backgrounds, the questions ranged from information on energy markets to impact investing and real estate finance.  We also got an informative update on how Wells Fargo has adapted to a post-recession era, and light was shed on some common misassumptions related to lending in this new environment. A big thank you goes out to both Mike Niedermeyer and Erik Bidenkap, who proved to be excellent hosts for our program and started our journey through the Bay with a positive attitude!


 

Written by Andrew White

Andrew is an MBA Candidate in the Center for Sustainable Business Practices. A native of Massachusetts, he came to UO to refine his business skills and build his expertise in the sustainability arena. His primary interest is in helping organizations implement environmentally and socially sustainable strategies for long-term success, and he is a regular participant on many of the MBA intramural sports teams.

John Schaus from Metlife talking to students at U of O

 

Mr. Schaus visited the University of Oregon’s Lundquist College of Business on February 7th to provide insight and guidance to students interested in careers in finance and insurance.  His conversation with the students began by explaining his role within Metlife, and what Metlife provides to their clients.  Additionally, Mr. Schaus dug into problems facing the insurance industry, specifically those that affect clients close to retirement.  His examination of the problems facing recent retirees was particularly beneficial to students as they begin their transition from the classroom to the office, and start laying the foundation for their own retirement.  Mr. Schaus not only discussed the problems with social security which have strained recent retirees, but also other effects including increased life span, which has resulted in a longer time to stretch out retirement savings, and the recent collapse of the stock market, which has depleted a substantial amount of retirement savings.

John received his BS in Marketing and an MBA in finance at the University of Oregon.

Aside from the insurance industry, Mr. Schaus was available to offer career advice to students who are searching for internships and potential employment upon graduation.  As a contributor to the FSAC, Mr. Schaus was ready and willing to provide a look into what employers are looking for in candidates, and what students can do now to make themselves appealing to companies looking to hire recent graduates.  At the end of Mr. Schaus’ discussion, he set aside time for a question and answer segment where students were provided the opportunity to pick his brain for fifteen minutes before a joint dinner with Mr. Schaus, faculty, and students.  The University of Oregon and the FSAC are proud of the accomplishments Mr. Schaus has achieved in his career and are grateful that he is able to guide students at the U of O as they begin their career search.

 Ryan Strub, Finance and Securities Analysis Center, Class of 2014

Written by Mavis Yu

MBA Candidate 2013 University of Oregon Lundquist College of Business Finance and Securities Analysis Center Graduate Teaching Fellow – FSAC Facebook: http://www.facebook.com/UoFinanceSecuritiesAnalysisCenter 503-860-0726

FSAC’s Emerging Market Fund Returns in 2013

Here is a quick update for the FSAC’s Emerging Market Fund performance so far in Winter Term. We currently have 15 holdings in our fund, with 12 of these stocks are generating positive returns for us. Top 5 performance drivers are 1. Zhongpin, engaging in the processing and distribution of meat and food products primarily in the People’s Republic of China. 2. Tencent, providing Internet value-added services, mobile and telecommunications value-added services, and online advertising services primarily in the People’s Republic of China. 3. Copa, engaging in the air transportation of passengers, cargo, and mail in Latin America. 4. Indosat, a telecommunication service provider in Indonesia. 5. SK telecom, also a telecommunication service provider but based in South Korea.

One of our holdings, New Oriental Education and technology (EDU), has a negative 35.51% return. After some heated debate on whether or not we should sell the stock, and research into last quarter’s earnings, we decided to keep it in the portfolio. This decision was largely based on strong earnings, and a continued demand for learning centers in 2nd and 3rd tier cities in China. Ultimately, we took a long term perspective hoping that the solid earning will drive the equity value up, and external liabilities (an SEC investigation on the corporate structure) will quickly come to and end.

Overall, we are proud to say that the fund is performing really well (a 11.76% investment return), and it is really great to apply the financial skills we learned in classes to manage this fund. Please contact the portfolio managers: Mohammad Alkhamis and Mavis Yu if you’ would like to receive a more detailed weekly fund performance report.

Mohammad Alkhamis: malkhami@uoregon.edu

Mavis: hanchiao@uoregon.edu

Investment return for EMF as of February 6, 2013

 

Mavis Yu, FSAC, Class of 2013

 

Written by Mavis Yu

MBA Candidate 2013 University of Oregon Lundquist College of Business Finance and Securities Analysis Center Graduate Teaching Fellow – FSAC Facebook: http://www.facebook.com/UoFinanceSecuritiesAnalysisCenter 503-860-0726

FSAC in NYC, Day Two Recap

FSAC Day Two Blog Post- Dominique Christiansen, Class of 2013

After a great first day in New York, as chronicled by Mavis Yu, we had another exciting day ahead of us for our second day. We had four meetings at Bank of America Merrill Lynch in midtown at One Bryant Park. We met with four Managing Directors from four very different sectors. The structure of each meeting consisted of each managing director giving us an overview of their personal career path and what their specific group was involved with at Merrill Lynch. Each Managing Director also touched upon the differences in the company culture and procedures since the merger with Bank of America.

First we met with Jonathan Yalmokas, Managing Director of Prime Brokerage. He gave us an overview of prime brokerage, which he viewed more or less as “hedge fund services”. They offer margin loans, lend stock for hedge funds to short, help them raise capital, and offer an array of consulting services. They also make money on the spread of financing. Since the merger with Merrill Lynch in 2009, Bank of America has been focused on gaining market share in prime brokerage services, which are dominated by Goldman Sachs and Morgan Stanley. Jonathan Yalmokas believed that Bank of America was previously underexposed to hedge funds. He gave us a detailed background on different hedge fund strategies that include: multi-strat and co-mingle structure, equity (long and short), and event funds that bet on the spread of a merger or acquisition.

Scott Bacigalupo, the managing director of Cash Trading for the Americas joined us next. He began as an analyst in the Investment Banking program at Merrill Lynch in 1994. He revealed to us that 94 of 100 of his analyst classmates went into Fixed Income, which was very attractive at the time in 1994. He was one of the few who went into equities and reaped the benefits during that time out of his analyst class. His over-arching message of advice was to veer away from the hot trends and products.  He also spoke of the difficulties in operations since the passing of the Dodd Frank Act.  It was very clear that while he understood the necessity and importance of the Volker Rule, but its hindrance made his job increasingly more tedious in regards to operations.

Gerry Walker, the managing director of High Yield Sales met with us next. Bank of America is the largest underwriter of corporate bonds in the US, and Gerry walked us through the specifics of a deal he closed this past week with Jaguar and Tata Motors of India. It was great to get an inside look at a recent and real-time event like that, which really helped to illustrate the concepts at hand.

Our last meeting at Merrill Lynch was with Chip Montgomery, the Managing Director of Senior Relationship Management. He personally manages 80 global clients that include Fidelity and T-Rowe Price. Chip is a legacy employee, having been involved in research and sales (mortgage and fixed income, among other areas) since his start at Merrill Lynch in 1985. Chip was very candid with us and receptive to any questions we had about his career path. During our conversation, he provided us with some great soundbites such as: “Follow up and follow through meticulously with your clients.” And “The key to building successful relationships is trust, consistency, and performance.”

After our meetings with Merrill Lynch, we took the train from Grand Central Station to Stamford, Connecticut, in which the headquarters of Gartner, Inc. is located. We met with Oregon alumnus Darren Crook, the current head of Investor Relations. Darren began as a sell side analyst, covering large cap entertainment stocks such as Disney. Upon his layoff from Jeffries, the opportunity to work at Gartner presented itself, and Darren says the switch in careers turned out to be the best thing for his work-life balance. He was very candid in his description of the competitive nature of being a Wall Street analyst.

Gartner offers products and services for companies that have IT (which according to their total accessible market, over 100,000 companies spend over 100M on IT). They offer three main services: research, consulting, and events. 70% of their revenue comes from the predictable and recurring stream of subscription revenue. In addition to Darren, we also spoke with a member of Gartner’s HR department, who described their 2-year finance rotation program in depth. Gartner is looking to significantly expand their sales force annually, and it seems like the rotation program might be a great way for an MBA to get their foot in the door with a unique and competitive firm!

 

 

 

Written by Mavis Yu

MBA Candidate 2013 University of Oregon Lundquist College of Business Finance and Securities Analysis Center Graduate Teaching Fellow – FSAC Facebook: http://www.facebook.com/UoFinanceSecuritiesAnalysisCenter 503-860-0726

FSAC New York Trip, Day One

Walking in between the concrete jungle where we can see iconic and historical buildings, chilly wind blowing on our faces, we are experiencing our first day in New York City.

FSAC students get the chance to come to New York – the main financial center of the world – and network with professionals in the financial services industry.

Our first visit of the trip brought us to Business Wire, the public company information and news disclosure firm that specializes in harnessing social media and public relations to disclose company news. The president of Business Wire, Gregg Castano, gave us a clear picture of the history of the company as well as its expanding global footprint. We were also given a tour of the newsroom to see how people work to make sure information and company news are disclosed simultaneously correctly online. BW builds the network system with most of the world’s press and utilizes social media to meet various customers’ needs. Before visiting BW, we were unaware that a public company is not allowed to disclose firm news on its own website. It must do so through a certified information disclosure firm, such as Business Wire. While we went into this meeting with little understanding of exactly how BW worked, I must say that we were quite impressed by their interesting and unique business model.

The next visit on our list was with Neuberger Berman, an investment management firm that provides financial services for individuals as well as institutional investors. We were able to meet the senior vice president, Ian Haas, who was a Duck, graduating ten years ago with a bachelors degree in finance from the University of Oregon. Ian talked about the different investment teams and service sectors in the company. Ian himself works on an alternative investment team managing a fund to hedge fund. He also told us how Neuberger Berman went private and survived after Lehmann Brothers filed bankruptcy in 2008. (NB was acquired by Lehman brothers in 2003. After the collapse of Lehmann, NB was able to respond to the crisis quickly and conducted a management buyout to spin itself off from the parent.) Nowadays, with $200 billion in assets under management, it is the largest private employee-held asset management firm.

After a great meeting with Mr. Haas at NB, we moved on to FTV Capital, which is an asset management company focusing on high-growth companies in four specialized areas: business services, financial services, payment/transaction processing services, and technology. We met the head of New York office – Brad Bernstein – and went over the business model of FTV Capital. FTV specializes in investing in private equities and utilizes its investment partnership to maximize the growth potential of the investing firm. Brad also showed us some successful cases studies of highly successful investments. I was astonished by the dynamic and potential of the private equity investment firm. Most of the time we do research and valuation on publicly-traded companies (with more available information and public disclosures). Nevertheless, investing in private equities remains significantly important in the financial industry because it is more difficult to understand or look into the earnings models of privately held firms.

We had great time talking to those professionals and experiencing the dynamic of different financial services in New York. Our fist day was great, and all the students appreciated the insights from the different companies and the conversations with professionals. More exciting stories to come later!

Mavis Yu, MBA 2013, Finance and Securities Analysis Center

Written by Mavis Yu

MBA Candidate 2013 University of Oregon Lundquist College of Business Finance and Securities Analysis Center Graduate Teaching Fellow – FSAC Facebook: http://www.facebook.com/UoFinanceSecuritiesAnalysisCenter 503-860-0726

Finance Gains in Portland

For some first-year students in the Oregon MBA’s Finance and Securities Analysis Center, glimpses of where our education could take us are very valuable. These glimpses both remind us that going back to school was the right choice and help us find our paths. We were fortunate enough to get an illuminating view of two possible futures last Friday when we visited Mazama Capital Management and Umpqua Bank.

Ron Sauer, founder of Mazama Capital, spoke with us about the history of Mazama and gave an overview of the current business. His story about how he successfully transitioned from a student to a professional hit very close to home for some of us, as it was not only his talent but also a bit of chance that helped him succeed. Next, Li Tang and Krystal Daibes spoke about the responsibilities of an industry analyst; their detailed description elucidated a complex profession, giving us a clear view of where our degree could take us.

At Umpqua bank, Daniel Sullivan, the Executive Vice President of Strategic Initiatives, and Brooke Turner, the Vice President and Commercial Relationship Manager of Umpqua’s downtown Portland location, taught us about how a bank can grow in the modern competitive market. Seeing these real-life examples of strategic business development demonstrates that the skills we are learning can be applied in many situations. Their presentation gave us insight into the types of decisions we could be responsible for someday – decisions that put a company on a successful course.

Kyle Spradling, Finance and Securities Analysis Center, Class of 2014

Written by Andrew White

Andrew is an MBA Candidate in the Center for Sustainable Business Practices. A native of Massachusetts, he came to UO to refine his business skills and build his expertise in the sustainability arena. His primary interest is in helping organizations implement environmentally and socially sustainable strategies for long-term success, and he is a regular participant on many of the MBA intramural sports teams.