URI business students impress investment industry veterans
Dave Lavallee, 401-874-5862
Ram Fund members highlight stock transactions for advisory board
KINGSTON, R.I. -- March 10, 2004 -- When University of Rhode Island business student Matt Moreau reported on his and his fellow students’ success with Winnebago stock, their new mentors from the investment and finance industry broke into smiles and nods of approval.
"We investigated Winnebago and found that it became one of our top performing stocks," Moreau explained during the first meeting of the Ram Fund Advisory Board. "Last March (2003), we purchased the stock at $27.40, and nine months later we sold it for almost $60 a share."
That was just one of several highlights presented by URI College of Business Administration students who manage the Ram Fund, which was established in the spring of 2001 with $100,000 in seed money from the Alumni Association.
The Alumni Association’s goal in establishing the fund was to give advanced business students the opportunity to invest and manage money for the long term. Each year, students compete for various positions in the Ram Fund.
To strengthen the experience, the Ram Fund Advisory Board has been established to provide information, encouragement, advice and access to ideas and opportunities that might otherwise be unavailable to the students. The board first met with students in late February.
"Our committee has been pleased with the students’ investment performance, and impressed with the quality of investment analysis and their presentation skills," said Peter Miniati, treasurer of the Alumni Association. "Investment management is a difficult field to enter. The experience of managing a real money portfolio for a client gives URI’s top business students an advantage over undergrads from other schools. We are thrilled that the students have the opportunity to interact with Advisory Board members – all URI alumni who have reached the very top of the investment management profession."
The Winnebago stock success outlined by Moreau, a Burlington, Vt. resident, was just one of several that impressed the board members. Students Kelleigh Jann of Barrington and Emily Salter of New Rochelle, N.Y., presented a detailed report on XM Satellite radio, a subscriber-based digital radio service that provides 101 listening choices. Jann and Salter provided details on competitors, initiatives that would strengthen XM’s market position and briefs on the company’s top executives.
However, the two caught everyone’s attention when they reported that they had purchased 100 shares of the stock at $9.79 per share and sold them for $26.79 per share, a gain of $1,700 or a return of 175 percent.
"We want you to know that the students are doing advanced security analysis," said David Michayluk, assistant professor of finance and co-teacher for the Ram Fund, with Cranston Mayor Stephen Laffey.
Indeed, that was the case when student Scott Cohenford presented a report on ValueClick, a company that brings web publishers together with advertisers and provides technology necessary for each side to manage online advertising. Cohenford recommended that the Ram Fund students buy the stock. "Although relatively new, the company is rapidly growing sales and earnings and it has already established itself as one of the leading market competitors," he said in the report. "ValueClick’s unique and diversified services set it apart from all other companies in the field, giving unmatched versatility and flexibility to survive and ever-changing market.
"ValueClick can stay on top of its game while competitors lose market edge and build debt," he said.
"We looked at the advertising industry, which is a high risk industry, but also high growth," the West Warwick resident said. "This company is one of the youngest in the industry, and yet it is one of the most profitable. It has one of the highest profit margins of any of the competition."
After compliments from the advisory board members, several offered advice and personal thoughts on the investment industry.
"As you watch the television and read the newspaper and you see the analysts quoted, they might seem like experts," said advisory board member Thomas J. Silvia, a portfolio manager for Fidelity Investments and a 1983 URI graduate with a degree in chemical engineering. "But once you get into the business, you realize how shallow they may seem to be. If you get into this business, you’ll get to know companies and industries better than anyone else."
He also told the students that when he first started on Wall Street, he was struck by how willing people are to make money at any cost. "There is tremendous pressure that leads some to doing the wrong thing. You have to be very careful. Make sure your integrity and ethics are in the right place."
Advisory Board member Thomas Shevlin, a senior executive with Haven Capital Management in New York and a 1968 graduate of URI’s business college, said values are most important. "Teamwork is very important as well, and be willing to go to a mentor. Recognize and embrace the change in business, and when you are interviewed by a recruiter, be yourself."
Other URI graduates serving as members of the Advisory Board are: Thomas P. Fay, managing director of regional investments for Columbia Management Advisors, a wholly-owned subsidiary of FleetBoston Financial and an MBA graduate of URI; Douglas E. Cote, portfolio manager for Enhanced Core Strategies ING Investment Management Americas; and Marc Dorcus, a senior investment manger for White Mountains Investments.