Last time , we introduced you to the Investment Analysis Group (IAG) at the New York University Stern School of Business. The undergraduate investment club was about to add Intel ( INTC) to its portfolios . Now, in the second month of their fall semester, IAG is on the lookout for some S&P benchmark busters. Here's an update on their progress.
Each of IAG's two portfolios -- the growth oriented "All-Star" and the value-focused "Initiative" -- trail the S&P by close to 4%. This no doubt weighs on the student portfolio managers trying to live up to the group's lofty historical performance -- IAG has generally trounced the S&P (see "How a Group of College Kids Outtraded the Pros" ) . But the school year is still young, and good decisions made now can have a big impact on the value of the group's model portfolios. So, what companies do IAG's members like right now and what have they learned about stock selection along the way? Week Three: A Good Story Needs Good NumbersCaraustar Industries ( CSAR) was presented during the IAG's first October meeting. Past selections were predictable for college students -- alcohol ( Diageo ( DEO) and computer chips ( Intel ( INTC). Caraustar, a recycled paperboard manufacturer, seemed to be a bit of a departure. Still, on Friday, October 5, Mattan Griffel, Michael Tanzer and Zhuoya Wang presented the stock. Griffel says his team "picked Caraustar up off a 52-week low screen " and did some fundamental research on it. According to Griffel, the premise for buying Caraustar was that it "was a dirt cheap paper company, trading at way below book value " and that the company "was probably going to get bought out sooner or later (see "How to Play the M&A Game" )."