Introduction
Value investing is a time-tested strategy that focuses on identifying undervalued stocks and investing in them for the long term. At Fordham University, the Fordham Value Investing Club (FVIC) provides students with the opportunity to develop expertise in financial analysis, fundamental valuation, and long-term investing principles. This article explores the club’s mission, investment philosophy, valuation techniques, and activities.
Mission and Objectives
The Fordham Value Investing Club is dedicated to:
- Teaching members the principles of value investing.
- Providing hands-on experience in stock analysis.
- Preparing students for careers in investment management.
- Connecting members with finance professionals and alumni.
Investment Philosophy
FVIC follows the core principles of value investing, which include:
- Intrinsic Value: Determining the true worth of a company based on fundamental analysis.
- Margin of Safety: Buying stocks at a significant discount to their intrinsic value to minimize risk.
- Long-Term Perspective: Investing in companies with strong fundamentals and holding them for extended periods.
Valuation Methods Used by FVIC
1. Price-to-Earnings (P/E) Ratio
The P/E ratio is used to assess whether a stock is overvalued or undervalued compared to its earnings.
P/E = \frac{Market\ Price\ per\ Share}{Earnings\ per\ Share}2. Price-to-Book (P/B) Ratio
The P/B ratio compares a company’s market value to its book value.
P/B = \frac{Market\ Price\ per\ Share}{Book\ Value\ per\ Share}3. Discounted Cash Flow (DCF) Analysis
The DCF model estimates the present value of future free cash flows to determine a stock’s intrinsic value.
V_0 = \sum \frac{FCF_t}{(1 + r)^t}where:
- V_0= Present value of future cash flows
- FCF_t = Free cash flow in year tt
- r = Discount rate
Club Activities and Events
Stock Pitch Competitions
FVIC members participate in competitions where they present investment ideas and valuation models to finance professionals.
Guest Speaker Sessions
The club hosts investment managers, equity analysts, and alumni who share industry insights and career advice.
Portfolio Management
Members manage a simulated investment portfolio, applying value investing principles in real-time market scenarios.
Career and Networking Opportunities
FVIC helps students secure internships and full-time positions in asset management, hedge funds, and private equity. The club leverages Fordham’s alumni network and industry connections to provide career mentorship and job placement support.
Conclusion
The Fordham Value Investing Club equips students with the skills necessary for success in the finance industry. By emphasizing fundamental analysis, valuation techniques, and hands-on experience, FVIC provides a strong foundation in value investing. Whether you’re an aspiring investor or looking to build a career in finance, joining FVIC is a valuable step toward achieving your goals.
