The D.A. Davidson Student Investment Competition serves as a competitive platform for 20 schools across the west coast. The Oregon State Investment Group is entering its fourth year in the program. Each September 1st, all portfolios are reset to $50,000 for another year of competition. Any excess return beyond 5% is split evenly between D.A. Davidson and the participating school.
Due to the one-year time horizon of the DADCO competition, the portfolio inherently lends itself to more risk. The objective of the fund is to capture value by indentifying companies whose earnings we expect to grow significantly, or those that we believe have been undervalued by the market and are priced at opportunistic levels. We consider value/distressed securities to be those that satisfy any of the following conditions: a P/E of less than or equal to 10, are trading below their current book value, or have a PEG ratio below 1. The DADCO portfolio is also dependent on the ability to capture unforeseen growth, so the group relies on indicators such as: rapid revenue growth, high margins, forward P/E and an ROE above 15%.