Per Johansson's Sohn London Presentation: Long eBay, Short ACS ~ market folly

Monday, December 7, 2015

Per Johansson's Sohn London Presentation: Long eBay, Short ACS

We're posting up notes from the Sohn London Investment Conference 2015.  Next up is Per Johansson of Bodenholm Capital who pitched a long of EBAY and a short of ACS.


Per Johansson's Sohn London Conference Presentation 2015

Long Ebay (NAS: EBAY): Per Johansson is particularly interested in the investment opportunities created by spinoffs. The spinoff of Paypal from Ebay is creating an opportunity to invest in a smaller Ebay. The Paypal spinoff is the first step to unlocking Ebay’s value.

Ebay has a strong balance sheet. It is a high margin business but growth has temporarily slowed for three main reasons.  - May 2014, Google changed the search algorithm - A security breach led to customers having to change their passwords - The strength of the Dollar has been a headwind.

Johansson believes growth is picking up again. Auctions are only 15% of the business. Ebay owns some good brands that some market participants are not aware of. For example, it owns Mobile.de which he referred to as the” Autotrader of Germany.” In time the market will recognise the importance of Ebay’s brands.


Short ACS Actividades de Construccion y Servicios (BME: ACS): ACS is a Spain based global construction company. Johansson said that ACS has accounting irregularities and overstates its earnings. The company has not created any cash flow in the last five years. There are hidden liabilities on the balance sheet. ACS’s end markets are deteriorating. There are cost over-runs on big projects in California.


Be sure to check out the rest of the Sohn London Conference presentations.


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