Meeting on 1/24 @ 2:30pm in Reg 523

Hi Everyone,

Thank you for all your great work on the industry reports. These reports I think will be great resources for us in screening stocks this week, and also for reference in the Sector's research throughout the rest of the year. 

The plan for next week's meeting is to pick the stock for our 8th week pitch. To do this, each of you will have a chance to present a 7-10 minute stock pitch. The details of the assignment are attached on the Assignments - Week 3 folder of the dropbox. 

With regards to screening, I want all of you to at least attempt to find your own stock. However, I understand that time constraints may result in the search for your optimal stock pick being less than ideal. So, this is the plan going forward:

1. Everyone must fill out the research spreadsheet with a stock of their own choice.

2. Should you find after filling out the research spreadsheet and conducting other initial research, that the stock is not as promising as you originally expected, you may send an email to me requesting a different stock to research.

3. However, you can only send that email if you send me a half-page written explanation of why you abandoned your initial stock pick, detailing the intuition and financial information that went into your initial interest and ultimate decision.

Be methodical in your screening process. Choose a screening technique and follow it out while taking notes on the successes and failures of the method. Common methods include -

1. Identifying industry themes and proactively choosing stocks you believe should benefit from them. 

2. Quantitative stock screening. Looking for stocks with below industry average multiples, which you should find on our industry reports or online. Or looking for stocks with above average ROIC or margins.

3. Hedge fund ideas. Seek out small-cap focused hedge funds and look at their healthcare holdings. You can actually look these up online as these are public filings.

4. The bottom of the barrel. Look for the worst performing healthcare stocks of the last year or last several years. Has the market overreacted to its issues?

5. Momentum stocks. Look at stocks that have technical 'momentum' and see whether there might be a fundamental reason for that. 

Sector meeting is at room 523, time from 2:30 - 4:30. Schedule will be detailed later in the week.

Best,

Eduardo