Maclay Students Compete in Wharton Investment Competition
Four Maclay students have joined forces to compete in a 10-week global investment competition sponsored by the Wharton School of Business at the University of Pennsylvania. Madeleine Roberts, Hayden McDaniel, Collin Roberts, and Madelyn Stout formed an investment club, Yeti Investors, in mid-August when they began meeting to discuss the many facets of the market, research sectors, and develop a unique investment strategy for the competition.
The team is registered in Region 3 of the competition, a diverse grouping that includes teams from 12 countries across 5 continents. Each team was given $100,000 to invest in Wharton’s stock simulator and assigned a specific client whose needs were considered as the team’s investment portfolio developed.
After much research and debate, Yeti Investors chose to focus their portfolio on a bottom-up strategy that considers stocks that pay dividends, have a three-year trailing earnings growth of at least 10%, have predicted earnings growth of at least 10% for the next year, and a relative strength index value less than 50 at the entry point, as well as other secondary considerations. Collin Roberts, who covers the industrial and energy sectors and places all trades for the group, said: “We consider dividends as a sign of executives’ confidence in the future success of their companies.” He continued, “Since we’re putting together our portfolio with the long-term investment interests of our client, we want stocks with a history of good earnings growth at a high yet sustainable rate. Our RSI requirement allows us to avoid stocks that are potentially overbought, from a technical analysis standpoint.”
Each member of the investment team monitors two sectors and screens stocks within those sectors to see if they might be a good fit for the portfolio. Stocks of interest are then presented to the team at weekly meetings to be considered for a potential purchase, while the status of current holdings is also discussed. Top stock holdings in Yeti Investors’ portfolio include CVS Health Corp, Nestle India, Molson Coors Brewing, ZTO Express, and China Yuchai International. Through this process, the group has learned about teamwork, communication, risk, diversification, company analysis, industry analysis, and investing. Additionally, the team reached out to Bloomberg L.P.’s education division, which granted free access to their data platform for the duration of the competition. As these Maclay students have gotten to know their way around a Bloomberg terminal, this access has provided them with real-time prices and market data as well as powerful analytical tools that have been critical to the independent research process.
Trading for the competition closes in mid-December with the final report due shortly after that. Top teams progress to the finals, where they will have the opportunity to travel to Philadelphia to present their investment strategy to the competition judges at Wharton. Over 2,000 teams entered this year’s competition from over 30 countries around the world, including such diverse places as China, Malaysia, Nigeria, Norway, and Brazil. Winners will be selected based on the strength and articulation of their investment strategies and consideration of the client’s needs. To find out more, follow Yeti Investors on Instagram as Madelyn, Collin, Hayden, and Madeleine share highlights of their investment journey @yeti_investors.
- Collin Roberts is a Maclay School Freshman