Peter Ricchiuti: Finding Diamonds In The Rough
New Orleans is a long way from Wall Street and Tulane Business Professor Peter Ricchiuti says that's a good thing.
Ricchiuti and his students have made national headlines by unearthing data on little-known companies in the Gulf South with strong earnings potential. "We call them stocks under rocks–dozens of companies that Wall Street has totally ignored to their own peril."
For the last 13 years, Ricchiuti and his students have produced securities research on companies that have been under-followed by analysts. Today, the Burkenroad Reports are distributed to more than 30,000 individual and institutional investors. About two-hundred Tulane students follow fifty companies in six southern states. Students are divided into teams and they make on-site visits to each company, meet with company executives and compile the research.
"Tulane is a leader in experiential learning," Ricchiuti says, using the Burkenroad Reports as a good example. "Our students take helicopters offshore, visit chicken processing plants and actually meet with the CEO's of these companies who want to tell their company's story." Ricchiuti says this hands-on learning opens doors for students who go on to work in Wall Street investment firms as portfolio managers, equity researchers and traders.
The research impressed Hancock Bank of Mississippi so much it started a mutual fund built around the program. Since its inception on December 31, 2001, the Hancock Horizon Burkenroad fund (Ticker Symbol: HYBUX) has a 15.24% annual rate of return far surpassing the S&P Index rate of 5.72%. "We've been blowing away most mutual funds," Ricchiuti proudly exclaims. The fund and Burkenroad Reports have been featured in national media such as the Wall Street Journal, Barrons, Kiplinger's and more.
Ricchiuti's hands-on approach extends to his personal life as well. The Boston native came to New Orleans over twenty years ago and revels in Louisiana culture, even alligator hunting. In 1996, he and his in-laws snagged a 16-and-a-half foot gator weighing 640 pounds. "It set the state record for the year," he says proudly.
As devoted as he is to New Orleans, Ricchiuti is an unwavering Boston Red Sox baseball fan. Even a flare-up of a serious neurological condition couldn't keep him from attending a game a couple of years ago. He was in Boston and suffered a sudden loss of equilibrium. "But Pedro Martinez was pitching," he recalls. Ricchiuti went anyway. Turned out he would need surgery for a malformation of blood vessels in his brain. The surgery was scheduled for 6 a.m. on the very day the Sox clinched the World Series. When he woke up at 11 p.m. that night, the ICU nurse told him "we clinched 15 minutes ago." Ricchiuti immediately asked, "what was the score?," a good sign that this business professor had come through surgery with flying colors. Peter is doing his part for the city's post-Katrina recovery. He sits on the New Orleans Revenue Estimating Committee which is in charge of the City's fiscal health.
Peter Ricchiuti thrives on teaching and enjoys the relationships he's formed with his students – past and present. Yet he's identified the moment when he'll retire from teaching: "The day one of my students walks in and tells me I taught their mother. That's the day I'm going to step down."
