(Bloomberg) -- Some of the biggest hedge fund names pitched their strongest wagers and concerns to an audience in Toronto -- from Jimmy Levin’s long view on telecom giant China Tower Corp. to Rob Citrone calling Elizabeth Warren the single biggest risk to the market.
Over two days, investors gathered at the C4K Investors Conference to hear trade ideas. Here’s a rundown of some of the most prominent calls.
Sculptor Capital’s Jimmy Levin Is Long China Tower Corp.
The chief investment officer of Sculptor Capital Management Inc. said the firm is betting heavily on China Tower. The telecom company has a “phenomenal” competitive advantage with a 98% market share, he said. It also has scale and can manage the infrastructure upon which China’s mobile communications network is built.
Starboard’s Jeffrey Smith Said Box Is a Good Takeover Target
Box Inc. has a slowing growth rate and poor profitability but could be attractive to a buyer, Smith said. The software maker could unlock value by accelerating growth, better balancing profitability and increasing sales, or even seeking an acquirer, he said.
Tudor’s Ulrike Hoffmann-Burchardi Pitched Alteryx
The software company’s shares could reach $150 over the next 12 months in a bullish scenario, said Hoffmann-Burchardi, who runs an equity portfolio within Tudor Investment Corp.’s flagship hedge fund. The company has two growth drivers: its focus on business analytics and data science, she said. She also pitched a long wager on cloud communication company Twilio Inc., saying it has high growth prospects with strong operating metrics.
Discovery’s Rob Citrone Said Elizabeth Warren Is a Market Risk
The market isn’t pricing in the prospect of the Democratic party’s left wing gaining power, the founder of Discovery Capital Management said. “If Elizabeth Warren is leading the way into the February primaries, the S&P will be down 10, 15, 20%,” he said. He suggests shorting Turkey’s currencies and equities, as the nation is poised to fall into crisis. He thinks Mexico is also deteriorating, and wouldn’t be surprised if Germany is in a recession next year. There’s a 20% to 30% chance of Italy leaving the European Union in the next 18 months, he said. On the long side, Citrone likes the currency and equity markets in India, Vietnam, Malaysia, Thailand, Indonesia and the Philippines.
Corvex’s Keith Meister Is Bullish On ForeScout Technologies
Cybersecurity firm ForeScout Technologies Inc. can double its revenue over the next three to five years, said Meister, managing partner of activist hedge fund Corvex Management. In the worst case of five years, revenue would rise to $800 million, he said, from projections this year of about $361 million. The company can also reach $650 million of gross profit in that time, he added. Corvex said in a filing this week it partnered with Jericho Capital Asset Management on a 14.5% stake.
Chilton’s Jennifer Foster Sees Upside for Domino’s Pizza
By 2021 Domino’s Pizza Inc. could be trading at about $340 a share, said Foster, co-chief investment officer of equities at Chilton Investment. The stock is now at about $263. The failure rate for stores of the pizza chain is “incredibly low,” she added.
Parsifal Capital Management’s David Zorub pitched Brazilian insurance provider Sul America SA as a long idea. He sees private health insurance having a long runway of growth in Brazil.Canada-based Element Fleet Management Corp. is a favorite at Picton Mahoney Asset Management, which sees upside to C$13 for the shares over the next year. President David Picton likes the company’s transformation strategy under CEO Jay Forbes.Social media site Pinterest Inc. drew praise from 1832 Asset Management’s Noah Blackstein, who sees potential for the company to double its revenue per user versus publicly traded peers.Impactive Capital pitched a long on Asbury Automotive Group Inc., saying the company is generating growing free cash flow and its shares have more than 100% upside.Darling Ingredients Inc. will be a part of the global shift to low-carbon platforms, said Ardinall Investment Management CEO Maria Jelescu. The fund’s high-case scenario estimates 130% upside.Aluminum producer Constellium SE has upside to $26 per share, according to One Tusk Investment. “While the equity has appreciated since 2017, we think the story is more exciting today because the majority of the growth is ahead of us,” Vivian Lau said.Vision Capital’s Jeffrey Olin pitched BSR Real Estate Investment Trust as a long idea because he sees the company garnering institutional support as it trades at a discount to U.S. peers.Two Creeks Capital Management sees about a 50% upside to Floor & Decor Holdings Inc.’s stock over the next year with a $66 target in that time. The company has impressive same-store sales and has lowered its exposure to China, Two Creeks founder Ryan Pedlow said.White Crane Capital suggested shorting Maple Leaf Foods Inc., saying it’s not a fundamentally great business and that its plant-based protein unit isn’t growing at hyper rates. White Crane estimates C$1.6 billion in potential legal liabilities from allegations of bread price-fixing. Maple Leaf said it determined in 2017 that its exposure was “not material to our company, and nothing has happened to change our assessment.”Senator Investment Group’s Jay Bharadwa endorsed Thomson Reuters Corp., saying the company’s transition is taking it from “good to great” as margins expand and growth accelerates.Bornite Capital’s Daniel Dreyfus said Cheniere Energy Inc. could reach $93 a share in a year. The company, now trading at about $64, could be added to the S&P 500 Index, generating greater investor interest, he said.
(Adds Zorub’s presentation under Other Takeaways.)
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