This week’s current event presentation was about Israel and how Yoav Kisch recently proposed a bill to allow cannabis exports. This would be a great opportunity for the Israeli economy. There was a great discussion in class regarding the legality of this substance because of the potential dangers that it could bring. Despite the social repercussions that will create a commotion in Israel, the benefits will be far more rewarding compared to the disadvantages. The growing export, health benefits and increased small business growth will all be helpful for the economy and overall improve parts of the economy.
This week in the consulting session we covered relative valuation. Relative valuation strategies are relevant to the consulting session as they provide analyses of comparable companies and a basis of what the company will be valued at. You want to be valued near or above the comparable companies to sell or buy the company for the right value. There are different multiples that you can value the comparable company analysis off of – typically EBITDA or EBIT is used and projected 5-10 years in the future. Once you find the EBITDA multiple of the comparables, than you can multiply this multiple by the company’s EBITDA that you are trying to value. This will help you find the enterprise value. After looking through Pepsi’s example of balance sheets, members were able to grasp a firmer idea of the valuation.
This week, we learned about the Discounted Cash Flow Analysis (DCF) to conclude our education for the semester. A discounted cash flow analysis is an important aspect of financial valuation to incorporate into the stock pitch because it intrinsically values a company based on their projected free cash flows. This valuation method is used by many people to predict the future cash flows and terminal value which provides an estimated valuation range for the company. Our members were able to use this new knowledge and skills for their stock pitch while evaluating their company and deciding whether to buy the stock or not.
This week we also had presentations that the students have been working on with their groups. Both the consulting presentations and the stock pitches were held on Thursday, 11/29. Each group did a great job researching their company and it was awesome to see all of the pieces come together that we learned throughout the semester. Our consulting groups put together a unique presentation, each suggesting a new bundle for Spitball with creative cases for all. One group suggesting a scholarship section to be added to the Spitball website which everyone thought was a great idea and could really help Spitball be incorporated in the United States. On the stock pitch side of presentations, each group put together a comparable company analysis, discounted cash flow analysis, precedent transaction analysis and football field graph for their specific companies and evaluated whether or not to buy the stock based on the industry trends, history and predictions that they were able to conclude.
This was yet another big week for TAMID Group Beta Chapter at Illinois: we had the opportunity to hear from the Dean of the Gies College of Business: Dean Jeffrey Brown. Dean Brown has a very interesting perspective on the Israeli economy from his experiences working for the White House and in the business school. TAMID members were able to hear about his work and everything that he has done to promote Israel within the business school, specifically, one of his goals is to increase the amount of Gies students who travel and learn in Israel. Dean Brown has made many initiatives to increase the Israel presence including promoting studying abroad and semester long trips to Israel. We were able to ask questions and hear his unique perspective regarding our specific ideas.