Penn State Behrend team wins CFA local investment challenge

Members of Penn State Behrend's CFA research team pose with trophies

From left, Greg Filbeck, professor of finance, poses with members of Penn State Behrend's CFA Research Challenge team: Samantha Chiprean, Kelsey Schupp, Eric Frei, Ricky Grullon, advisor Josh Armstrong and Drew Barko.

Credit: Penn State Behrend

ERIE, Pa. — Dick’s Sporting Goods just cut $100 from the sale price of an Easton Fastpitch TORQ-handle bat.

The better bargain, says Kelsey Schupp, who has studied the company’s financials for the past six months, could be Dick’s stock, which on Feb. 19 sold for $38 a share. It should be closer to $50, she believes.

Schupp, a senior at Penn State Erie, The Behrend College, led a student investment team that recommended a “buy” strategy for Dick’s investors at the 2016 Chartered Financial Analyst Institute Research Challenge. The judges — a panel of high-profile financial analysts — agreed, giving the team the top score for the competition’s initial round.

The CFA research challenge is considered the “investment Olympics” for university students, who develop detailed financial reports and one-year stock valuations for the company selected for a case study. Each team is paired with an industry mentor, who can provide up to six hours of advice, and can submit questions to top executives of the company being studied.

“It’s a hands-on project,” said Schupp, who is from Erie. “That’s how you really learn about this stuff. In class, with a traditional case study, everything you need is in the case file. This was different. We had to go out and find the information for ourselves.”

Dick’s is the nation’s largest sports apparel, footwear and equipment retailer, with 645 stores. The company also operates Field & Stream, Golf Galaxy, True Runner and Chelsea Collective specialty stores.

Sports retailing is a mature industry, and a recent stumble by a major competitor, The Sports Authority, which missed an interest payment and has had to close several stores, presents an opportunity for Dick’s, Schupp said.

“They are in a position to capitalize on that and win even more market share,” she said.

Schupp and her teammates — Drew Barko, of Erie; Samantha Chiprean, of Wattsburg; Eric Frei, of Poulsbo, Washington; and Ricky Grullon, of Ridgewood, New York — met weekly beginning in September to prepare their detailed financial report and valuation of the company. Each spent more than 130 hours on the effort.

The team submitted its report using the stock’s $38 closing price on Feb. 19. A week later, the stock had risen to $42.

At the CFA local competition, held in Pittsburgh, the team summarized the key elements of its research in a well-rehearsed 10-minute oral presentation. They were given the final spot on the schedule, following teams from Carnegie Mellon University, Duquesne University, the University of Pittsburgh and Penn State’s University Park campus, among other schools.

“That they were able to capture first place among such impressive competitors is a testament to the rigorous finance program in the Black School of Business and the quality and work ethic of our students,” said Greg Filbeck, professor of finance at Penn State Behrend and the team’s adviser.

With the win in Pittsburgh, the team advances to the CFA regional finals in Chicago in April. They won’t stop there: Several of the students likely will revisit the study later this spring, when they enter the job market.

“Employers love it when you can talk about case projects,” Schupp said. “A lot of that work involves group dynamics, as well as time management and conflict resolution. Having that experience will really give us an advantage after graduation.”