How To Pitch A Stock PDF

How to Pitch a Stock
Educational Workshop #1
Intro
This is a learning environment, you should never be scared to ask a question
Make mistakes early so that you don’t make them during a pitch / competition
This presentation will be distributed, so don’t worry if you can’t write everything down
If you have not RSVP’d for the Superday, please do so ASAP!
Bauer Capital Group | bauercapitalgroup.org

Copyright © 2019 BCG. All rights reserved.
1
Overview of a Pitch
1. Company Introduction
2. Investment Thesis
3. Setup
4. Variant View
5. Catalysts
6. Risks
Investment team pitches will be delivered in the form of a write-up

Competition pitches will be delivered in the form of a PowerPoint presentation
All pitches will be delivered verbally and followed by a Q&A session

2
Company Introduction
The purpose of this section is to educate your audience on what your company does and how it
makes money
Companies can have complex products and business models
Therefore, it’s crucial to communicate effectively so that your audience can understand the rest of
your pitch
Things to include
• What does the company do? • How does the company make money?
• Who buys the company’s product/service? • How old is the company?
• Where does the company operate? • Who is running the company?
Before you can explain your pitch, you must first explain the company
3
Thesis
Your investment thesis is your entire pitch packed into a few sentences. The crux of a pitch is
selling an idea, the thesis is where you tell the audience what you’re selling.
The basic question you should be answering is:
Why should we buy / sell this stock?
Example
“I am recommending a high-conviction short position prior to the Q3 earnings print on YYY with a
price target of $20 and an implied upside of ~25%. Comparable store sales growth will be lower
than consensus estimates due to shifting consumer trends and the launch of a competitor
product.”

4
Thesis (cont.)
Give away the ending early! The audience should not be confused as to what your idea is
The rest of the pitch should tie directly to your thesis. Resist the urge to add unnecessary
information.
Remember, there is always going to be a Q&A session, this is where your Audience/PM/Judge will
ask the questions that matter.
The Q&A is your opportunity to showcase how much you really understand your own thesis.
Theses for the investment team and for competitions should be fundamental driven.
This means that you should think about key drivers and external factors with a clear tie to
business operations (foot traffic data, OPEC decisions, weather, etc...)
Tie your thesis (conviction level) with your operating model.

5
Setup
During your pitch, you’ll need to explain how you’re variant, explaining the stock’s setup is how
we’ll do that in our pitches.
For our purposes, it is critical to understand what the market thinks about a stock.
The market’s current price is the result of what consensus thinks about revenue/earnings/FCF
expectations
Things to include
• Recent price performance • Market bull/bear theses

• Short Interest • Changes in management
• Relevant consensus estimates • New product/service launches
A holistic approach to setup helps support your variant view

6
Variant View
This is how we make money.
The question your variant view should answer is:
What is the market getting wrong about this stock?
You could be variant on a variety of things, one thing to keep in mind is whether or not you are
variant on things that matter.
Step one for building a variant view is finding out what investors care about. This tends to shift
over time.
Your variant view should be the bulk of your pitch.

7
Variant View (cont.)
In order to identify a genuine mispricing, try to answer the following questions:
1. What is the market missing?
2. Why is the market missing it?
3. How will the market realize its error and correctly price the security?
Your operating model should serve as a tool to see what metrics you are variant on.
Example: Consensus estimates point to iPhone sales growth of 4% in Q4’19, your model indicates
that sales growth will be closer to 9% due to higher average unit prices.
This leads to you being variant on unit prices, sales growth, and ultimately revenue.

8
Catalysts
Catalysts are events that cause the market to realize the real value of a stock
Examples of Catalysts
• Merger / Acquisition • Guidance Changes

• Regulatory Approval • Bankruptcy
• Earnings Beat / Misses • Divestiture
There are really two main categories of catalysts

Events you know will happen (earnings releases)
Events you hope will happen (mergers / acquisitions)
The most common catalyst we will deal with are earnings releases

9
Risks
Key things that could go wrong in your investment thesis
What could cause your long / short thesis to go the other way?
The risks section of a company’s 10K or 10Q can be helpful for identifying potential risks

10

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How to Pitch a Stock

This is a learning environment, you should never be scared to ask a question

If you have not RSVP’d for the Superday, please do so ASAP!

Bauer Capital Group | bauercapitalgroup.org

Investment team pitches will be delivered in the form of a write-up

All pitches will be delivered verbally and followed by a Q&A session

Bauer Capital Group | bauercapitalgroup.org

Companies can have complex products and business models

The basic question you should be answering is:

Why should we buy / sell this stock?

Bauer Capital Group | bauercapitalgroup.org

Tie your thesis (conviction level) with your operating model.

Bauer Capital Group | bauercapitalgroup.org

• Recent price performance • Market bull/bear theses

A holistic approach to setup helps support your variant view

This is how we make money.

The question your variant view should answer is:

What is the market getting wrong about this stock?

Your variant view should be the bulk of your pitch.

Bauer Capital Group | bauercapitalgroup.org

In order to identify a genuine mispricing, try to answer the following questions:

1. What is the market missing?

2. Why is the market missing it?

Bauer Capital Group | bauercapitalgroup.org

• Merger / Acquisition • Guidance Changes

There are really two main categories of catalysts

Bauer Capital Group | bauercapitalgroup.org

Key things that could go wrong in your investment thesis

Bauer Capital Group | bauercapitalgroup.org

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