This week, EADA’s two teams competing in the CFA Research Challenge 2019 have been selected to continue on to the final at the Madrid Stock Market later this month. The CFA Research Challenge is a global competition based on practical training in financial analysis. Each year, more than 140 CFA member societies, 5,000 students and 1,000 universities and business schools collaborate in the Challenge. Groups of students work together to analyse a publically traded company – this year construction giant Sacyr – to produce a research report with a buy, sell, or hold recommendation.
On February 28, the seven finalists, including two teams from EADA, will attend the final at the Madrid Stock Market, where they will defend their report. EADA’s winning teams are made up of a diverse group of participants from four out of five continents from the International Master in Finance and the International Master in Accounting & Financial Management.
For team member Adarsh, the chance to compete against the best teams in Spain is one of the highlights of the Madrid final. “The final provides a taste of what real valuation projects are like and offers the opportunity to apply the soft skills we have learned at the same time,” he says. “There are a limited number of techniques available to all of the teams, so getting the right answer is not enough – the real challenge is coming up with the differentiating factor that leads to victory.”
Jiawen cites communication skills as a key factor in success. “The most challenging part of the competition is the Q&A from the panel in Madrid, as we will have to understand the evaluation at a professional level,” she says. “I am most excited about the presentation before the panel; it will be a chance to demonstrate that I have overcome the stage fright I have every now and then.”
The teams were chosen in October of 2018, when they began working on the research report for Sacyr, including a comprehensive financial analysis and a final company valuation. The report was turned in on February 7. Joan Tarradellas, EADA professor and tutor for Team A, confirms that the competition was stiff. “We knew that we were competing against the best teams of the top Spanish business schools,” he says. “All team members made a tremendous effort to produce and deliver a world-class valuation report for an extremely complex company, one of the most challenging appraisal exercises I have seen in my career.”
This year’s company, Sacyr, poses some unique challenges for teams. According to Aayush, assessing the company’s industry market and competitors was hard work. “Compiling the data was challenging, as Sacyr operates within multiple businesses across many countries,” he says.
After months of preparation, the team members are pleased to have been selected to continue on to the final in Madrid. Both teams highly recommend the experience, citing a significant improvement in time management skills and a comprehensive understanding of valuation. “The CFA Research Challenge is a great way to give that ‘extra’ something, to challenge yourself and learn valuable concepts that will help later on in your career,” says team member Andrés.
EADA Professor and Team B tutor David Gonzalvo agrees. “I believe the CFA Research Challenge is a great experience for students,” he says. “Although it’s an academic competition, the final report is expected to be as close as possible to what a research analyst would do in real life.”