Spring 2018 Recruitment Overview
Applications for Spring 2018 are now closed.
Slides from our Info Session here
Sign Up for our Investment and Trading Development Team here. Applications for our Quantitative Development Team is under the Spring 2018 Investment Team Applications.
Join our Listserv here.
Spring 2018 Applications are due on Sunday, January 28 at 11:59PM.
GBMS: Sundays, 3:00pm F85
Guidelines for Pitch
- Feel free to pitch any publicly traded asset with a market cap under $10 billion.
- If pitching an equity investment, please avoid well-covered stocks such as Google, Apple, Facebook, etc.
- Be sure to include the following sections: industry overview, business overview, business metrics (relevant ratios, etc.), thesis, qualitative and quantitative discussion.
- The qualitative analysis can take the form of a presentation or a write up. It should contain sections such as the Company Overview, Industry Overview, Thesis and Supporting Points, and Risks and Mitigants.
- For the quantitative analysis, be sure to focus on having clear and correct assumptions when driving revenue and costs. Do not focus on the mechanics of the model. We will accept DCFs, comparable companies analysis, liquidation analysis or any other form of model.
- Remember that we will be judging based on clarity and originality of thought rather than length and verbosity. Feel free to analyze a business without making a definite buy/sell recommendation. For those of you who have been on the development team, please remember to reference those concepts and apply them to your research.
Resources for Pitch
- Company filings, available at SEC Edgar. Here is a list of filings that you need to know. We recommend reading at least one 10-K and the most recent 10-Q.
- Earnings call transcripts are frequently available at Seeking Alpha, the company's investor relations website or on Thomson One (available on Wharton computers and through the Lippincott library). These transcripts frequently contain important information not discussed in the filings.
- Company presentations available on their investor relations website. These frequently highlight management plans.
- Analyst reports are available through Thomson One. To access Thomson One through a personal computer, please go to the Lippincott Library website, type in Thomson One, select the first link and sign in. Please note that Thomson One only works on Internet Explorer.
Whole Foods Sample Application Pitch
Whole Foods Market (NASDAQ: WFM) is an upscale supermarket chain that targets health-conscious consumers of middle and high income levels. As of January 20th, it is currently trading at $30.81 and at a 7.4x EV/EBITDA multiple. I believe that the company is undervalued as the market is not taking into account both their dominant position in the growing organic food market and their recent expansion into what they call their ‘365 stores’.
The firm employs a unique managerial structure wherein employees are grouped into store teams and given bonuses scaled to the relative performance of their respective Whole Foods location. This incentive structure helps induce higher customer satisfaction, creating a competitive advantage. A second competitive advantage is derived from Whole Foods’ recognizable brand name and unparalleled guarantee of high-quality products. This has created a near-monopoly within the large-scale organic grocer market, which is expected to grow at a 10% CAGR through 2020. Whole foods has been able to capitalize on this growth - in Q4 of 2016 alone, their bottom line increased by 57% relative to the previous quarter while revenue was up only 2%.
Whole Foods’ ‘365 store’ is smaller than a standard Whole Foods store, averaging 28,000 sq ft. versus 49,000. It is also cheaper for both Whole Foods and the consumer: the products in 365 stores are said to be 23% less expensive and the cost for Whole Foods to build and maintain the stores is over 50% cheaper, thus increasing their economic return. Whole Foods is set to open 22 new 365 stores in the first half of 2017. Analysts and the street have expressed concern that the ‘365 store’ brand could cannibalize a portion of Whole Foods’ existing sales. However, this will not be the case. The new stores are situated in locales where existing sale stores are already extremely low. Furthermore, the stores are focused on tapping into a younger demographics that lack the disposable income to consistently shop in their flagship stores. The absence of the cannibalization factor will vastly increase the future gains of the firm relative to the street’s expectations.
Whole Foods Market is currently being undervalued by the Street as a result of a general misunderstanding of their new venture into ‘365 stores’ and the potential they have to generate growing profits within the highly-demanded organic food space.