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Business Students Apply Their Knowledge in CFA Challenge

Bethel’s Chartered Financial Analyst Challenge team was the only private, Christian-based university at the CFA Institute Research Challenge Local Finals, which team members say demonstrates Bethel’s “strong reputation in the business world.”

By Jason Schoonover ’09, content specialist

March 04, 2019 | Noon

Bethel's Chartered Financial Analyst team and their faculty advisor

Bethel’s Chartered Financial Analyst Team was the only team from a Christian-based university to compete last month at the CFA Institute Research Challenge Local Finals. The team is, from left, Ryan Petersen ’19, Tyler Martens ’19, Trey Anderson ‘19, Associate Professor of Business/Faculty Adviser Brian Holland, Bridget Murphy ’19, and Mason Kucera ’19.

At $200 a share, Bethel’s Chartered Financial Analyst Challenge team was ready to issue a sell rating on Bio-Techne’s stock. But then the stock dropped to $140 a share. It eventually balanced out and after the Department of Business & Economics students valued the stock at $153.19, their research and work showed the company was being priced well. They issued a hold rating. “We don’t believe that it’s overpriced. We believe the market has fairly valued the organization,” says Tyler Martens ’19, an accounting and finance major.

That’s just a slice of the work done by Bethel’s CFA team, which competed February 21 at Minneapolis Central Library in the CFA Institute Research Challenge Local Finals against four other teams, including one from a graduate school. Bethel was the only private university—and only Christian college—of the five universities that gave 10-minute presentations of their findings in the regional finals. “It says a lot about the university,” says Mason Kucera ’19, a business finance and economics major. “It says a lot about the professors who have motivated us and have given the correct information and instilled useful tactics to retain that information.”

While Bethel did not advance to the national competition, the team found the experience enjoyable and beneficial. “It was a blast, and I couldn’t be happier with the team I had around me,” Kucera says.

In the CFA Challenge, teams of up to five students issue valuations of a company’s stock. Bethel’s team was assigned Bio-Techne, a clinical diagnostic and biotechnology company headquartered in Minneapolis. Bethel’s CFA team projected Bio-Techne’s stock price would appreciate another 5%, which—while good growth—wouldn’t provide a strong return on the market. But Martens called Bio-Techne a strong company built on a solid base of legacy products like proteins and amino acids.

Bethel’s team toured Bio-Techne’s offices, along with other CFA teams. They heard from the company’s chief executive officer, chief financial officers, and other executives in an overview of the company’s outlook. Kucera and Martens say that process proved helpful because it provided qualitative data and background to support their quantitative numbers and research. Kucera says he works analytically, but he says that additional information helped the team create “a picture of where the valuation is going as a company.”

For example, that helped the team attribute Bio-Techne’s stock fluctuations to recent mergers and acquisitions, which Kucera says shows the company’s dedication to growth. But that also brings risk as the company took on more debt and liability in the acquisitions, which is mitigated by the company’s steady cash stream. “They have the stability of their legacy products to fund acquisitions, which is a great growth strategy,” Kucera says. “But, if those acquisitions don’t pay off, there’s risk involved with them.”

The CFA Challenge enables students to apply lessons learned in the classroom to real-world situations. Kucera took his level one CFA test in December, and the CFA Challenge allowed him to apply what he’s learned while preparing for the test. Similarly, Martens says being able to use his classroom knowledge has helped as he’s studied to take his CPA exam. “It was really just a culmination of all the business classes coming together to one report,” Martens says.

As faculty advisor, Associate Professor of Business Brian Holland took a hands-off approach to let the students complete their work and gain experience. But he and a professional advisor provided feedback on the team’s written and oral presentations.

Participation in the CFA Challenge provides great networking opportunities, Holland says, adding it helps students as they seek employment after Bethel. “It tremendously expands their opportunities to get jobs—just participating,” he says. After putting the CFA challenge on his LinkedIn account, Martens received an email from a Minneapolis wealth manager asking him to apply to an open position. But he plans to work as an auditor at Deloitte after graduation.

While the CFA Challenge dates back several years, it connects well to one of the newest business and economics programs. Bethel’s young Royals Investment Fund has grown and outperformed early benchmarks.

The CFA Challenge and the Royals Investment Fund—commonly called the student-managed investment fund of SMIF—complement one another. As the Royals Investment Fund grows, some in the department can see students working on the fund as juniors and then the CFA team as seniors as a progression. Both research financial markets and investment opportunities, where Royals Investment Fund students evaluate and choose investment opportunities in the broader market, while the CFA team focuses its efforts on a single company.

Both provide business and economics students with real-world experience and exposure in the business market. “Bethel’s business department does have a strong reputation in the business world,” Martens says.

Along with Kucera and Martens, Bethel’s CFA Challenge team includes Bridget Murphy ’19, accounting and finance; Trey Anderson ’19, communication arts and literature education 5-12 and business: finance emphasis; and Ryan Petersen ’19, economics and finance and business: analysis/analytics emphasis.
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