Investing With Your Alma Mater: Penn State University

Let's face it, college was a good time. Sure, there's some "fog of war" hanging on some of those memories, and perhaps some of us left school with a new friend called debt, but most people look back fondly on their college days.

We are ... PENN STATE!
While that booming chant may be connected with the Nittany Lions football dynasty and its living-legend coach, Joe "Joe Pa" Paterno, there is a lot more to Penn State than gridiron greatness. With a total enrollment of 84,000 students, PSU is one of the 10 largest public universities in the country. The school is ranked in the top 50 by U.S. News & World Report and was No. 11 in a 2003 Gallup poll. Penn State's Smeal College of Business is a very highly regarded business school and was ranked number 18 by U.S. News & World Report. Smeal is particularly strong in the areas of management, real estate, and supply chain management.

Frank Smeal, a Goldman Sachs partner and highly regarded muni-bond trader, was a very generous PSU alumnus, and the business school is his namesake. Other notable people who call Penn State their alma mater include former U.S. Secretary of Defense William Perry, Howard Stern Show head writer Benjy Bronk, sports writer Tom Verducci, novelist Dale Brown, and NFL quarterback Kerry Collins (had to get at least one football player in there!).

But we're here for investing, so I've cross-referenced data from Capital IQ and The Motley Fool's new investing community service, CAPS, to come up with a list of some of the highly rated companies that have a Penn State grad in a key executive or board position. So without further ado, I give you your Nittany Lion starting lineup:

Company

Penn State Grad

LTM Stock Performance

CAPS Rating (out of five)

Nike (NYSE: NKE  )

Mark Parker, president and CEO

23.9%

****

American Superconductor (Nasdaq: AMSC  )

Gregory Yurek, co-founder, chairman, president and CEO

42.9%

*****

TradeStation Group (Nasdaq: TRAD  )

Salomon Sredni, president and CEO

(19.1%)

*****

Rockwell Collins (NYSE: COL  )

Patrick Allen, CFO

27.0%

****

SPSS (Nasdaq: SPSS  )

Raymond Panza, CFO

2.2%

*****

Patrick rocking with Collins
Over the past six months, Rockwell Collins has been en fuego. And why shouldn't it? Let's review. In September, Rockwell purchased a private company to bolster its software capacities. The company signed up a number of new deals with the Navy and was tapped for Boeing's (NYSE: BA  ) new 747 fleet. It continued to buy back shares and announced a new $500 million buyback program. And, most importantly, it is continuing to put up strong financial results and surpass analyst estimates.

Rockwell Collins makes communications systems and aviation electronics for military and commercial customers. On the government side, Rockwell works on projects like government-grade GPS systems, data link technology for unmanned air vehicles, and cockpit and mission management systems for military helicopters. Its commercial business includes avionics systems for flight management and flight control, as well as cabin electronics that provide passenger lighting and entertainment.

CAPS player ViciousChicken considers it a stock you can count on: "[Rockwell Collins is] a stable player in an unstable world. No matter how you look at it, defense spending will continue to rise, with an ever-greater focus on technology and smart weapons systems."

Patrick Allen, the company's CFO and resident Penn State grad, is a CPA who spent six years with Deloitte & Touche before joining Rockwell International. In 2001, when Rockwell Collins was spun off Rockwell International, Allen moved over to the new company and has been there since.

Then there's the rest
With so many Penn State grads floating around out there, the list above certainly isn't exhaustive. For instance, Mark McCollom, the CFO of Sovereign Bancorp (NYSE: SOV  ) , is another PSU grad. Though Sovereign's stock has shot up 20% since September, CAPS players are concerned about the bank's residential loan exposure, as well as the potential for it to put up organic growth, and have stuck it with a lowly one-star rating.

Penn State's collection of alums also includes one of the most powerful women in American business -- Archer Daniels Midland President, CEO, and Chairwoman Patricia Woertz. While Archer Daniels has benefited business-wise from the rise of ethanol, the same has hurt sentiment for the stock in CAPS. A number of CAPS players see ethanol as hype and believe that when the hype subsides, ADM will take a beating. So for now, ADM has been stuck with a "show me" three-star rating.

Are you still reading this? Go ahead and click on over to CAPS to let the other 24,000 registered players know what you think about these stocks -- or any of the other 4,100 stocks on CAPS.

More CAPS Madness:

Do you think you could pitch your favorite stock -- or ditch your least favorite one -- in less than 27 seconds? That's what we're doing over at Motley Fool CAPS. Check out our new stock videos.

Fool contributor Matt Koppenheffer encourages feedback, predictions on next fall's college football season, or suggestions on which school to explore next. He owns shares of Goldman Sachs. The Fool's disclosure policy has a Ph.D. in keeping you in the know.


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