- This topic has 5 replies, 4 voices, and was last updated Aug-175:35 pm by
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Up5
Be aware that if they want to challenge your suggestion to invest in utilities be prepared to answer, what happens if we find ourselves in a rising interest rate environment? Higher yielding, defensive companies like utilities tend to react similarly to bonds as rates rise. Just look at June of 2013. Of course there is an arguement that since Yellen continuing the US’s easy money policies that we won’t see rates rise this year. I know this is very US centric but I just wanted to help. Good luck @bob_loblaw.
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Up4
Hi @Bob_loblaw, good to see your first post! And thanks for the kind words 🙂
I think you have a good plan there. A few questions: for your case study, are you supposed to base your recommendation purely on financial statements (i.e. financial metrics)? I presume you’re presented with 2 companies in the same industry perhaps for this exercise to make sense? Don’t forget to think of the nature of the industry itself when looking at the ratios, e.g. growth firms in tech industry vs. more mature sectors like utilities/insurance/manufacturing would have different norms for the ratios of course.
For public companies that you’d recommend, you could use this opportunity to look into companies/sectors that interests you, as you’d have better background knowledge of them too. If it helps, I’d even do a summary 1 pager for say 2 firms that I’d recommend, as if they are equity research reports 1 pager summary, with headline description, your recommendation (and why), with the relevant ratio analysis etc. I thought that would be professional and impressive if you hand over 2 summary pages (1 A4 side per company) with some charts, numbers and ratio analysis, that you can use it as a guide to talk through your rationale with the VP. It helps show that you’ve done your work and put some thought into this, and also demonstrates that you can present information succinctly – all requirements of your role. Moreover, it guides your thought process during the interview as well as you talk through why you recommend this firm (vs. its competitor for example).
Hope that helps, and good luck Bob!
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Up2
Be aware that if they want to challenge your suggestion to invest in utilities be prepared to answer, what happens if we find ourselves in a rising interest rate environment? Higher yielding, defensive companies like utilities tend to react similarly to bonds as rates rise. Just look at June of 2013. Of course there is an arguement that since Yellen continuing the US’s easy money policies that we won’t see rates rise this year. I know this is very US centric but I just wanted to help. Good luck @bob_loblaw.
That’s helpful, @mattyc. I can’t imagine them not trying to challenge the argument, even if just to see my reaction. And since the company I’m interviewing for invests in the North American markets, that’s a very relevant point you made.
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Up1
Thanks for your feedback, Sophie!
As far as I know, the case study will present only financial statements. The position will entail financial statement analysis mostly, so it makes sense for the company to focus on that. Good point about checking whether the companies operate in the same industries; I’ll make a mental note of it.
Love your tip about bringing the analysis reports. Will definitely do that.
I greatly appreciate your input. I’ll come back and share my experience after the interview.
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