Lutgert News

FGCU team finishes 3rd in Student Investment Tournament

April 02, 2023  / Lutgert News  / Tags: 2023, Undergraduate, Competition, Economics & Finance, Finance

Congratulations to FGCU student analysts Mitchel Coker, Jessica Garciduenas and Adam Abdelfattah for taking home the $500 third place prize in a ‘Stock Pitch’ competition sponsored by the University of South Florida and Star Mountain Capital.

FGCU's Student Investment Tournament team
FGCU's Student Investment Tournament team

The FGCU team pitched current Eagle Fund holding, BorgWarner Inc, as their investment idea. As part of their research process, the students made extensive use of Bloomberg Terminal, the company’s Annual Report, SEC Filings, Investor Relations Website, Earnings Call Transcript, Supply Chain information, Wall Street Research and various news publications. The students also held a conference call with BorgWarner’s Director of Investor Relations as part of their due diligence process.

Here’s a brief snippet from the student’s presentation…

“BorgWarner is undergoing a major business model transformation from a supplier of internal combustion engine (ICE) auto parts to a key provider of Electric Vehicle (EV) components. This transition will allow the company to both accelerate sales growth and expand profit margins over the next several years.”

‘We believe the market has not fully appreciated the BorgWarner story....... and that is reflected in low equity market valuations across multiple metrics…… relative to the market, it’s industry competitors and the company’s own historical levels. Our DCF analysis generated a intrinsic value price target of $84, representing an 80% upside opportunity from the current market price. Additional stock price upside is possible, however, if investors begin to place appropriate value on the fast-growing EV components business, in a Sum Of The Parts analysis.”

“The company possesses several catalysts including: a recently announced plan to Spin-Off its fast-growing EV unit, continued deployment of Free Cash Flow towards accretive EV related acquisitions, and improving ESG rankings.”