This article was written by Stockpickr member Ira Krakow.
Last month, we saw how the Michael Price Student Investment Fund (MPSIF) at the New York University Stern School of Business was able to sift through the third-quarter earnings noise and stick to its investment strategies. Here is an end-of-semester rundown of how the MPSIF's
value student managers beat their
MPSIF Growth Fund: Up 9.7%
The MPSIF's growth fund, run by Ryan Fiftal, returned 9.7% between Aug. 31 and Nov. 30, beating the fund's benchmark, the
Russell 1000 Growth Index
, which returned a mere 3.7% during the same period. Fiftal attributes the growth fund's success predominantly to "good stock-picking." Fiftal says, "Our
underweighting of financials was an excellent call."
Here are the growth fund's recent buys and sells:
: Originally purchased on April 4 for $28.41 per share, the MPSIF growth team sold its stake in the education company on Nov. 7 for $57.77 per share.
Fiftal explains: "We sold
DeVry based on
valuation. The stock more than doubled since we purchased it, which was well in excess of our initial price target. Our thesis that DeVry is a great play on the growth of online vocational training was confirmed by the market. We did not want to be greedy."
: On Dec. 3, Fiftal and his team invested into the semiconductor company for $39.14 per share.
Fiftal's reasoning: "Tessera is not a semiconductor manufacturer per se. Instead, it licenses its intellectual properties for a royalty. By doing that, Tessera's business model is insulated from the price wars of the semiconductor manufacturers, such as
Advanced Micro Devices
. Our price target of $51 was based on a
discounted cash flow model."
: On Nov. 26, shares of the investment management firm with $1.3 trillion of assets under management were added to the MPSIF's growth fund for $190.15 per share.
Fiftal recalls: "We liked BlackRock's recent growth and performance in spite of difficult conditions in the financial space. Our
analyst was impressed with how smoothly BlackRock's
merger with Merrill Lynch Asset Management progressed. In spite of Merrill Lynch's recent
writedowns, we felt that asset management companies are more stable than
investment banks and
brokerage firms. Our analyst used a combination of
price/earnings-to-growth analysis, with expectations of superior growth compared to peers such as
T. Rowe Price Group
, and discounted cash flow analysis to arrive at a price target of $231."
MPSIF Value Fund: Up 3%
Marc Albanese, manager of the MPSIF Value Fund, also reported good results, with a return of a little over 3% from Aug. 31 to Dec. 5. This was stellar compared with the fund's benchmark, the
Russell 1000 Value Index
, which was down almost 2% for the same period. Marc attributes the results to "good stock-picking" as well, with the intent to "get international exposure." Examples include
Marc Albanese details two recent investments that he believes will extend the value fund's winning streak:
. Albanese explains: "Legg Mason enjoyed a 23% year-over-year growth in earnings per share in the most recent quarter. It's one of the larger asset management funds, with a big share repurchase plan. We valued Legg Mason using a discounted cash flow model, establishing a price target of $105."
is a domestic oil and natural gas driller and explorer that Albanese picked as "more of a play on natural gas." Albanese says that the company's "management is taking advantage of the depressed natural gas
price environment by buying rigs at a discount." According to his research, Unit is "poised to profit when natural gas prices rise." Albanese adds, "Based on the recent consolidation of
Global Santa Fe
the MPSIF believe Unit could be in play as an
"How to Play the M&A Game")."
Value and Growth Up, Small-Caps Down
While the MPSIF's growth and value funds saw benchmark-beating returns, the MPSIF Small Cap Fund ended the fall semester down 5% -- compared with its benchmark, the
Russell 2000 Index
, which was down 2.88% for the same period. What happened? Zach Shannon, manager of the small cap fund, cites a "difficult three-month period."
Next time, we'll take a look at Shannon's steps to navigate the small cap fund into positive territory.
Stockpickr is a wholly owned subsidiary of TheStreet.com.