Last week, one of EADA’s two teams competing in the CFA Research Challenge was selected to continue on to the final in Madrid. The CFA Research Challenge is the most prestigious competition of its kind, attracting more than 5,000 students from 1,000 universities and business schools worldwide. Teams are challenged to create a detailed investor report for a publicly listed company that changes annually – this year’s company is Indra.
On March 8, the five finalists (representing CESTE, EADA, ESADE, IE and UNED) will attend the local final at the Madrid Stock Market. For team member Teo, the chance to compete against the best teams in Spain is one of the highlights of the Madrid final. EADA will be the penultimate group to present its report, just an hour before the prizes are awarded.
EADA’s winning team is made up of a diverse group of participants from the International Master in Finance: Valentina Matas (Chile), Gerardo Palacios (El Salvador), Teo Sirola (Croatia), Kunal Talwar (India) and Niklas Wronka (Germany). According to Kunal, effective teamwork was an important factor in the team’s success. “The most valuable lesson has been the teamwork that led us to respect each other’s work ethics and opinions,” he says. “Since the start, the team has been very synchronised.”
Niklas also cites communication skills as a key factor. “With new input and perspectives emerging constantly from our research,” he says, “persistence and transparent communication between members paid off.”
The team began working on the investor report for Indra in the first trimester, completing a comprehensive financial analysis, a 5-year forecast of financial statements and a final company valuation that was turned in on February 15. “The competition is a challenge because students need to become familiar with a company and a sector quickly, and be able to value the company based on multiple internal and external factors,” says team tutor, professor David Gonzalo. “As a tutor, my job was to guide the team through the different stages of the report –research, structure and writing– and help them maintain a high standard of quality, both in content and format.”
For Gerardo, the Challenge offered a unique opportunity to hone his equity research skills. “Doing equity research on a +2 billion company with a global footprint and different market verticals has given me a lot of knowledge and the know-how to conduct this type of analysis in my future career,” he says.
This year’s company, Indra, poses some unique challenges for teams. According to Teo, assessing the company’s industry market and competitors, along with “finding relevant benchmarks and references for the forecast” was a challenge. Kunal agrees: “We struggled to gain an understanding of the company and its business model, discarding many initial drafts as we kept adapting to new information that led us to question our thought process and organisation of the report.”
After months of preparation, the team members are ready to move on to the next step. “Going to Madrid is the reward for the extensive effort our entire team has invested in this project,” said Niklas. “I am looking forward to the opportunity of presenting our results in front of an experienced committee and also hope to extend my network with competing teams and industry professionals.”