David Einhorn's Sohn Conference Presentation: Oil States International (OIS) ~ market folly

Thursday, May 9, 2013

David Einhorn's Sohn Conference Presentation: Oil States International (OIS)

We're posting up notes from the Ira Sohn Conference 2013 in New York.  Next up is a summary of the presentation from David Einhorn of Greenlight Capital.  He presented a long of Oil States International (OIS).

Long: Oil States International (OIS)

It's a low cost provider.  Trades at 4x, a discount.  Just under 7x EBITDA, should be over 8x  Almost half their fleet is proprietary/patent protected and has higher margins than competitors.  The offshore segment is undervalued as well.  It's an interesting business with high margins that isn't reflected in the valuation.

Sum of the parts (SOTP) = $118 (stock closed $95 that day, he presented after market close).  If you start to look at a REIT valuation, it could be worth $155.

Einhorn's not the only prominent hedgie in this trade, either.  We flagged how Barry Rosenstein's hedge fund JANA Partners filed a 13D on OIS recently as well.

The Greenlight manager also made some intriguing comments about his presentations at big events and noted he usually doesn't trade out of a position within 3 months of an event.  Reiterated to do your own work.

Einhorn also said he agreed with Druckenmiller's talk and said Greenlight is short steel and iron ore.

In addition to managing Greenlight Capital, Einhorn is also the author of Fooling Some of the People All of the Time.  For more on this manager, you can check out one of Einhorn's letters to investors discussing some of his positions.

Check out the rest of the hedge fund presentations from the event: notes from Ira Sohn Conference 2013.

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