Event Rules

Alpha Challenge Competition

1. Each team must consist of three full-time MBA students, of which at least two must be first year students.

2. Student teams will be making three (3) recommendations:  a long and a short from a pre-defined universe of stocks, and also a “wildcard” (long only) with parameters on the wildcard to be outlined closer to the competition.

3. For the defined universe, each team leader will receive an email approximately 10 days in advance of the competition, informing them of the universe of stocks available for recommendation. The available stocks will be selected from a specific industry and exclude companies in which trading is not considered sufficiently liquid. From the list of available stocks, students must make one, and only one, buy recommendation as well as one, and only one, sell recommendation. (Note(1): if the stock submitted with your resume is in the universe, it cannot be used as your “long” or “short”, but may be valid for your “wildcard”; Note(2): the additional “wildcard” selection can come from the universe, but it does not have to). The investment horizon is twelve months and the students should assume they represent a $1 billion fund that will fully invest in these three (3) positions.

4. Students will be permitted to use any research tools that are available through their respective school, including Bloomberg, FactSet, StockVal, professionally prepared equity research and industry contacts. FactSet will be made available to each participating student.

5. Presentations must be submitted electronically as three (3) individual PowerPoint files. A template will be provided when the universe is distributed on Nov 3rd.  File names must include the name of the team’s school, type of pitch, and the stock ticker (example: UNC-Long-MSFT.pptx).  Presentations should not contain any video or other excessively large data objects. Presentations must be emailed to the event coordinators no later than 5:00p, Sunday, November  13, 2016.

6. Morning rounds will be begin promptly at 7:45am on Friday, November 18th, and there will be 6 competition rooms:  Two (2) for longs, Two (2) for shorts, and Two (2) for wildcards.  Teams will be randomly split into two (2) groups of 8 schools, and will make three separate pitches, one in each of their assigned room for a long, short, and wildcard. Note:  teams will be changing rooms for each pitch, however, you’ll compete against the same teams in each room.

7. Each team will have 7 minutes to present its stock recommendations. The presentations will be followed by up to 10 minutes of questions by the judges. Each room will be officiated by a member of the Kenan-Flagler Business School community. Time limits will be strictly enforced by the official.

8. Following all of the presentations, the judges will assign a rank of 1 (best) through 8 (worst) to each team in their room. Judges must complete their rankings by 11:00AM EST. The winning team of each room will move on to the final round to pitch the stock from their winning room.   In addition, the team with the highest overall score from their 3 pitches will also advance to the finals, making the finals a total of 7 pitches.  A team can have more than one pitch in the finals.

9. Judging will be based on the quality of the investment idea, the communication of it and the risk/reward, and to which investment idea would you be most likely to allocate capital?

10. During the luncheon, KFBS representatives will reveal the 7 teams/pitches that will compete in the finals. The order of presentation for finalist teams will be determined by random drawing.

11. At 12:30PM EST final round presentations will begin. Each team will have 10 minutes to present their stock recommendations and 10 minutes of questions by the judges.  The proceedings will be officiated by a member of the Kenan-Flagler Business School community. Time limits will be strictly enforced by the official.

12. Following all of the presentations, the judges will assign a rank of 1 (best) through 7 (worst) to each presentation. The scoring/ranking from the morning rounds, in addition to the scoring/ranking from final round, will determine the overall ranking and winners of the 2016 Alpha Challenge.  The top 3 teams (schools) will be announced at the awards reception shortly after the final round ends.

Pat Hartley Performance Award: Return Calculation Rules

All results are based on total percentage returns of all three (3) stock recommendations, assuming an equal weighting of each. For determining return, the closing price of the relevant securities on the next to last US exchange trading date before the current competition as the ending value, and the closing price of the relevant security on the date of the previous year’s Alpha Challenge competition will be used.

The performance award is based only on the positions selected by students during the previous year’s competition. Positions cannot be changed, liquidated or substituted in any way following presentation.