As Burkenroad Reports celebrates its 25th anniversary, Freeman Business looks back at how Peter Ricchiuti built a tiny equity research program covering six “stocks under rocks” into one of the most acclaimed experiential learning programs in the nation.
In 1993, Peter Ricchiuti was teaching part time at the A. B. Freeman School of Business and working full time as the assistant Louisiana treasurer. As manager of the state’s $3 billion investment portfolio, Ricchiuti regularly fielded requests from investors for information about Louisiana businesses, but he had almost nothing to offer them. Most Louisiana public companies weren’t even on the radar of analysts working for Wall Street financial firms.
Ricchiuti remembers a landscape ripe for an innovative idea: “You’ve got these companies in Louisiana that sometimes we refer to as orphan stocks. Nobody loves them. Nobody writes reports about them. And we’ve got an unlimited number of really smart kids that want to stand out in the job market and really get their hands dirty. What could [Freeman] do to make ourselves very, very different?”
And that, in a nutshell, is how in the fall of 1993 Ricchiuti founded Burkenroad Reports, the nation’s first student stock research program. With a $45,000 grant from the Louisiana Education Quality Support Fund, Ricchiuti launched the program as a non credit extracurricular activity that initially attracted 16 students. Burkenroad Reports has since developed into one of the jewels of the Freeman School, providing students with real-world experience as equity analysts and launching hundreds of investment careers. Every year, Freeman students vie for one of the 200 spots following 40 small-cap public companies across the Southeast. Students research the companies and their markets, travel to their headquarters and meet with top management, design financial models, and publish objective, in-depth equity research reports with recommendations for potential investors.
Yasgari Asgari (MBA ’19) left, and Teddy McCullough (MBA ’19), associate directors of research, meet with Ricchiuti in his office to discuss the companies they’re covering this semester.
Although educators have come to understand the benefits of experiential education, when Ricchiuti first developed the idea for Burkenroad Reports, such hands-on learning programs were rare in business schools. Ricchiuti is barely exaggerating when he says that in those early days the sparse money available for the program meant “we could only follow companies that were on the St. Charles streetcar line.”
For the first five years of its existence, the program was called Freeman Reports. In 1998, it was renamed in recognition of financial support from Jane Burkenroad Bories (NC ’51), Peggy Burkenroad Selber (NC ’53) and Aaron Selber Jr. (BBA ’50) in honor of legendary coffee importer William Burkenroad Jr. (BBA ’23).
While a number of instructors and support personnel help keep the program running, the face of Burkenroad Reports is undeniably Ricchiuti, known as much for his comic timing and high energy as for his deep knowledge of finance. Ricchiuti peppers his lectures with colorful stories and jokes, sometimes even slipping into an accent to set the scene for listeners.
“You can’t say enough about the boundless directional force of nature that he is,” recounts former student Scott Weber (MBA ’97), who manages a Houston equity fund.
“Peter is the professor everybody wants to have,” says Karen Howland (BSM ’99), a Burkenroad graduate and managing director of San Francisco venture capital firm CircleUp. “He makes investment interactive and interesting. As students, we were always wondering what joke he would tell next.”
Burkenroad Reports now follows companies headquartered in six states (Texas, Louisiana, Mississippi, Alabama, Georgia and Florida) — “you know,” Ricchiuti jokes, “the financial center of the country.” Ricchiuti calls overlooked but profitable investment
opportunities “stocks under rocks,” and with Burkenroad Reports, he created a winning formula.
“He was always looking out for the underfollowed, underappreciated company with a good business model,” says Kash Rangan (MBA ’94), his former student and now a managing director at Bank of America Merrill Lynch.
Ricchiuti also recognized the need in the market for objective, unbiased investment analysis. While sell-side analysts typically work for investment banks that hope to gain business from the companies they follow, the independent student analysts of Burkenroad have no such conflicts of interest. Current students and program staff are also
prohibited from investing in Burkenroad companies, helping them to avoid even the appearance of impropriety.
Ricchiuti and his students often recognize underfollowed jewels before Wall Street: Over the life of the program, 44 companies that Burkenroad follows have been bought out, validating the students’ research and earning investors an average stock premium of 35 percent.
Ricchiuti with his painting of Los Angeles Dodgers Hall of Famer Sandy Koufax in the background. A baseball fanatic, Ricchiuti calls Burkenroad “Wall Street’s farm league.”
Over its 25 years, Burkenroad Reports has earned national coverage in The Wall Street Journal, Barron’s, The New York Times, Investor’s Business Daily, Kiplinger’s and The Washington Post and been profiled on CNBC, CNN, and PBS’s “Nightly Business Report.” In 2014, Burkenroad Reports was recognized by the Wharton School’s Reimagine Education Awards for having the top teaching delivery of any experiential learning program in the world, beating out programs at more than 400 universities in 43 countries to earn the honor.
And the program’s real-world experience has succeeded in setting Freeman job seekers apart and ahead of their peers, increasing their marketability in the investment world.
“The Burkenroad program took a lot of the skills that I had learned in my fundamental courses and made them more real, made them more applicable for the real world,” says Ron Ondechek Jr. (MBA ’03), whose experience in Burkenroad helped him transition from his position as an engineer at Exxon to a career in finance. He is now managing director of South Highland Ventures LLC, a family office private equity investment firm in Shreveport, Louisiana.
Howland is another of the hundreds of Burkenroad alumni who’ve launched into successful careers in investments. As a student analyst, Howland covered Piccadilly, a chain of cafeteria-style restaurants. When she was interviewing for post-graduation jobs, recruiters were impressed by the program. “It gave me a real leg up as far as experience goes,” she says. “The program made Tulane students stand out, and to be able to stand out is a huge advantage.”
One of the program’s great successes occurred in 2001 with the establishment of the Hancock Horizon Burkenroad Small Cap Fund (HHBUX). Though Hancock Horizon Investments manages the fund and makes all investment decisions, the mutual fund was inspired by Burkenroad Reports and uses its investment reports as a source of research. Over its lifespan, the fund has outperformed 99 percent of all stock mutual funds in the country.
“That is just amazing,” says Ricchiuti. “I never thought [Burkenroad Reports] would be this successful, and I jokingly tell people that we do it with the lowest research payroll in America — zero.”
As he explains in his 2013 book on investing, Stocks Under Rocks, Ricchiuti recognized an opportunity in following small, well-run but overlooked companies. “Some of these companies we follow, we get there, and no [analyst has] visited these companies in four or five years,” says Ricchiuti. “They have big signs, ‘Welcome Burkenroad Analysts,’ out front.”
Despite the program’s reputation for finding diamonds in the rough, Ricchiuti says students still sometimes want to know at the beginning of the semester why they aren’t following large, glamorous stocks like Microsoft.
“Well,” Ricchiuti tells them, “Bill Gates isn’t going to spend a whole day with us, and there’s 65 analysts following Microsoft. What are we going to bring to the table?”
For their part, the students are always amazed at how much they learn. For example, when a team of Burkenroad analysts went to visit the CEO of Crown Crafts, one of the nation’s largest producers of baby supplies such as bibs, the students told him that one measure they were using to value the company was the rate of U.S. births. The executive replied they should probably focus on the birthrate of first babies. “By the time you get to the second, third kid,” Ricchiuti remembers him saying, “you’re using the same bib you used on the first one.”
Students regularly take away similar nuggets of wisdom in their meetings with company officials, which is why Burkenroad places such an emphasis on the importance of getting out of the classroom, donning a jump suit or hard hat, and going on site. In Stocks Under Rocks, Ricchiuti describes Burkenroad as having “the best field trips in the free world. We’ve flown out to and visited offshore oil rigs, toured steel mills, and walked through chicken processing plants. If you’ve never been to a chicken processing plant, do take the family!”
Three years after Burkenroad Reports began, the Freeman School inaugurated the Burkenroad Reports Investment Conference, an annual event where executives from Burkenroad companies present to investors. The late- April conference (which Ricchiuti nicknamed “Jazz Fest for Capitalists”) has become one of the biggest business events in the Gulf South, drawing nearly 800 people every year. Normally, only institutional investors attend such conferences, but Ricchiuti is proud of the conference’s democratic approach, distributing stock information to anyone who wants it — “I’ve got professional money managers [alongside] ladies from Chalmette in fuzzy slippers. It’s the way life ought to be, really: ‘You all heard the same information. Now, good luck.’”
Burkenroad Reports is a huge undertaking, with annual expenses running about $800,000. For starters, there’s the cost of student travel, printing Wall Street-worthy reports and staging the annual conference. Such a big project requires a dedicated staff. Freeman School lecturer Anthony Wood (MBA ’07), an alumnus of the program who previously worked for TXU Energy, Capital One Southcoast and Charles Schwab, team-teaches the course with Ricchiuti. While Ricchiuti handles the finance side, Wood instructs students how to research, analyze, create and forecast financial statements to build financial models that predict Marie Daigle has been with Burkenroad Reports since the beginning, and she keeps the train on the tracks: overseeing interns, running analyst workshops and coordinating the annual conference. Dee Fuchs, a Freeman lecturer, is the writing editor for Burkenroad Reports. Jennifer Brady is a senior program coordinator who coordinates the student analysts and company management.
The Burkenroad team. Clockwise from left, Ricchiuti, Anthony Wood, Jennifer Brady, Robert Morton, Dee Fuchs and Marie Daigle.
Weber now reads Burkenroad Reports as part of his job, and in the two decades since he graduated, he’s become even more impressed with what Ricchiuti created. “I think it’s fantastic on a number of levels,” he says. “What makes Burkenroad valuable as a research tool is that the analysts are not motivated by encouraging a trade. I would say the unbiased nature of the research is inherent to its value.”
For Kash Rangan, Burkenroad proved an entrée into a rewarding career in equity analysis. “I could not be happier with the job I’m doing,” says Rangan. “I have been incredibly fortunate, and the starting point was Burkenroad in 1993.”
What really sticks with Rangan, however, is Ricchiuti’s kindness. Rangan had landed a post-Tulane job as a stock analyst at Robertson Stephens, a San Francisco investment bank. Even 25 years later, Rangan recalls the paltry sum in his bank account that afternoon — $5.60. “I didn’t have enough money to even take a cab to the airport. I told Peter that. He gave me a ride, and it was very touching. I was teary-eyed when he dropped me off.”
That’s just one story of many about the influence of Ricchiuti and Burkenroad Reports over the past 25 years. Ricchiuti looks back on the program he created 2 ½ decades ago — a program that has propelled nearly 750 students into successful investment careers, inspired one of the nation’s most prosperous mutual funds, and brought numerous students to chicken processing plants. It is a successful impact that no one could have foreseen 25 years ago — even a master stock predictor like Ricchiuti.
“I was always a big advocate of experiential learning,” says Ricchiuti, “and I saw promising companies overlooked by Wall Street and smart students who wanted to stand out in the job market. I thought, ‘Here’s a match made in heaven.’”
