Top Picks From The Sohn Conference

By: Marshall Hargrave
Harvest Exchange
May 9, 2017

Top Picks From The Sohn Conference

From this year’s Sohn Investment Conference -

• Keith Meister of activist hedge fund Corvex Management, and former Carl Icahn frontman, is a big bull on CenturyLink. CenturyLink is buying up Level 3, which is the catalyst that has gotten Meister interested - calling the move a ‘game changer.’ He sees 40% upside to CenturyLink and has made the company Corvex’s largest holding.

• Bill Ackman of Pershing Square took his time on stage to tout a company he’s owned for several years, Howard Hughes. He’s never really talked about it publicly but says now is the most interesting time to own Howard Hughes. The company builds communities in various locations and owns the South Street Seaport in New York City. The key thesis for Howard Hughes, according to Ackman, is the "location, location, location” of the company’s properties.

• Blue Harbour's Clifton Robbins again touts his Investors Bancorp holding. He’s talked about Investors Bancorp in the past and again argues that the demutualized bank could become an acquisition candidate in the future. "We'd like to see a significant share [buyback] increase and we'd like to see increasing dividends, and we think they will be the beneficiary from tax relief and regulatory reform," Robbins said "if that happens that'd be a good thing. We would support them if they find accretive M&A to do. And at some time... at the right price, we think the company is an attractive acquisition candidate."

• David Einhorn of Greenlight Capital says short Core Laboratories.

• Debra Fine of Fine Capital says buy DHX Media, as kids programming is a business that never goes out of style. Expects shares to go up four-to-fivefold.

• David Serra at Algebris Investments says to short Gilts, given the U.K. a broken country. Imports and weak public finances will put pressure on the economy there. So short the long-dated Gilts.

• Greenlight Capital's David Einhorn says investors should short Core Labs. Calls the company misunderstood, as it’s not the secular growth story many think, and instead is a cyclical story. Part of his thesis is that oil prices will remain lower for longer, hence, Core can’t make a lot of money in deepwater drilling.

• Palihapitiya Chamath of Social Capital calls going long Tesla. Compares Tesla to Apple, and thinks it’ll do for cars what Apple has done for the smartphone. But don’t buy the stock, buy the 2022 convertible bonds. It’s a win-win, as you have no downside and get nearly all the Tesla upside.

• Jeff Gundlach of DoubleLine Capital wants investors to go long the emerging markets and to short the S&P 500, as U.S. valuations are “out of whack.”

• Brad Gerstner of Altimeter Capital says go long United Airlines, citing new management and the moves it is making. Says the stock is worth $135 a share in his base case.

• Josh Resnick of Jericho Capital touts a short call on Frontier Communications. He’s been short for five years and says the company is poised for bankruptcy. Expect the company to cut its entire dividend and then break its covenants.

• Larry Robbins of Glenview Capital has a few picks, including DXC Technology, Quintiles IMS and FMC Corp. Says all three have a reasonable valuation and they have more earnings growth ahead than the market is expecting.

• Sohn idea contest winners was a Wharton student and he pitched going long eBay.

From last year’s Sohn Conference -

• Stan Druckenmiller said buy gold and sell stocks. He was quite wrong, hence the recent he was introducing speakers and not introducing this year.

• David Einhorn said go long General Motors and short Caterpillar. GM has been up over 10%, but his CAT short has been abysmal, with CAT shares up 40% since last year’s Sohn.

• Jim Chanos said to short MTN Group, the largest mobile phone company in Africa. It’s been a small underperformer since the conference.

• Glenview Capital’s Larry Robbins said that Anthem and VCA were the stock to buy and he was right, with both up more than 25% since then.

• Starboard Value’s Jeff Smith said that DepoMed was a buyout target. He’s been wrong and shares have fallen hard. However, Smith is still waging an activist battle there.

Originally Published at: Top Picks From The Sohn Conference