Spring 2024 Recruitment Overview
APPLICATION PROCESS OVERVIEW
Applications for investment teams are due February 3rd, 2024 at 6:00 PM ET. You can apply to at most two investment teams.
Apply on the Centralized Application through Penn Clubs or using our back-up applications page found here:
Join our Listserv Here
Email pennwitg@gmail.com if you have any questions
Application TIMELINE
January 19: Applications for Investment Teams Open
January 28: Information Session (3:00 PM)
February 2: Applications Close
February 3-15: Interviews
By February 19: Investment Team Admission Decisions
WITG Information Session: January 28, 2024, 3:00 PM
Join us on Sunday to learn more about opportunities for you to get involved in the organization! Hear from our Executive Board and Portfolio Managers about the application process, the structure of the club, and the events we have planned for the upcoming semester.
When: Sunday, January 28th at 3 PM
Where: F85 @ Huntsman Hall
Who: All undergraduates across Penn’s schools are welcome!
WITG GBM 1: Stock Pitch Walk-Through (Fall-only)
Join us on our first GBM to learn about pitching a public company! We’ll teach you how to analyze the industry landscape, how to evaluate a company’s business model and competitive advantages, as well as how to craft an investment thesis. Multiple sample pitches will be presented at the GBM to introduce you to public market investing!
When: TBD
Where: TBD
Who: All undergraduates across Penn’s schools are welcome!
INVESTMENT TEAM APPLICATIONS:
Note that you are allowed to apply for up to two teams. The written application will include a “Why WITG” essay (100 words), investment team specific questions (200 words), and a stock pitch (500 words). If you apply to two teams, you should reuse your “Why WITG” answer and your stock pitch, but you must answer both teams’ specific questions.
GUIDELINES FOR STOCK PITCH
Feel free to pitch any publicly traded asset.
You may pitch either a long (buy) or short (sell) recommendation.
The pitch does not need to be in the sector you are applying to. Feel free to pitch any company you are interested in.
If pitching an equity investment, please try to avoid well-covered stocks such as Google, Apple, Facebook, etc.
The qualitative analysis should contain sections such as the Company Overview (including business metrics and relevant financial ratios), Industry Overview, Thesis and Supporting Points, and Risks and Mitigants.
Quantitative analysis is not required, especially for first-years. If you would like to include quantitative analysis, briefly describe the process and results in the writeup. With that being said, we would rather see a well-developed qualitative analysis; we care about how you think, not whether you can build a model.
Remember that we will be judging based on clarity and originality of thought. 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 are available at SEC Edgar. Here is a list of types of filings that you should know. We recommend reading at least one 10-K and the most recent 10-Q to learn about the business.
Earnings call transcripts are frequently available at Seeking Alpha or the company's investor relations website. These transcripts frequently contain important information not discussed in the filings.
Company presentations are available on their investor relations website. These frequently highlight management plans.
Analyst reports are available through Refinitiv.
SAMPLE STOCK PITCHes
U-Haul Sample Application Pitch
November 2022
Amerco (NYSE: UHAL) is a holding company comprised of two main segments: the largest DIY moving and storage operator in North America known as U-Haul (94% of revenue) and an insurance business (6% of revenue). With a current market cap of $10.2 billion, Amerco may be mispriced because of the lack of financial coverage, with its self-storage segment receiving almost zero analysis from the sell-side. The current share price presents an opportunity for the stock to double over the next 5 years.
Operating a powerful and durable brand, UHAL is well-positioned for continued growth. Its self-serving truck rental business holds a near-monopolistic position in the U.S., commanding a 50% market share, while the second and third-largest players combined hold just 20%. As the most well-known truck rental business, UHAL benefits from strong brand recognition that allows it to save on customer acquisition costs due to lower marketing requirements. In addition, the company's network of 23,000 dealer locations (10 times more than its biggest competitor) forms the largest DIY truck rental network, with 90% of the U.S. population residing within 5 miles of a UHAL location, and 35% within 1 mile. UHAL's fleet of over 190,000 trucks also dwarfs its largest competitor's 20,000. Customers looking for rental trucks most value convenience, and UHAL’s large fleet provides a strong competitive advantage, making it the first choice among end users. In addition, with scale and higher utilization rates, UHAL is able to spread its fixed costs among a larger customer base, increasing its profitability compared to competitors. Smaller mom-and-pop competitors are unable to compete with the pricing and offerings of UHAL, allowing UHAL to increase its market share and establish local monopolies. As the relative scale difference between UHAL and its next competitor continues to grow, UHAL benefits from greater scale advantages that continue to improve its margins and cash flow generation.
In addition, the current market fails to appreciate the value of UHAL’s self-storage segment. Choosing to develop units from the ground up instead of buying completed facilities has required a high upfront investment. While this allows for lower cost, slow development coupled with low occupancy growth in the initial periods has negatively impacted UHAL’s return on capital in this segment, making the segment appear unattractive. However, as these units stabilize and pricing rebounds, the self-storage segment will generate more than $206 million in operating income, assuming a 72% NOI margin. With a 7% cap rate, this transformation is expected to create $2.9 billion of value. Fears of a recession have negatively impacted the market’s views on UHAL’s self-storage segment; however, UHAL has chosen to develop in underserved markets with lower penetration, allowing for greater growth avenues compared to markets saturated with competitors. With 7.3 million rentable sq. ft. under development and 135 purchased land lots, UHAL’s storage presents significant value and will continue to benefit from synergies created by its truck rental business.
With strong competitive advantages, we believe UHAL will have 2% sales growth in moving products and 7% sales growth in other moving products. EBIT margins of the truck rental segment is projected to expand to 33% as the company benefits from economies of scale and supply chain normalization. With the truck rental segment valued at a 7.0x EBIT multiple (in line with peers), its storage business at a 65% NOI margin and 7% cap rate (as occupancy rates improve), and its insurance business at its historical 9.0x EV/EBIT, UHAL presents an opportunity for 22% IRR over 5 years.
Whole Foods Sample Application Pitch
January 2017
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 these stores is over 50% lower, 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 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.