Jonathan Boyar's London Value Investor Conference Presentation 2018: AXTA, GOLF, MSGN, BEN, HHC

We're posting up notes from the 2018 London Value Investor Conference.  Next up is Jonathan Boyar of Boyar Value Group who presented five long ideas: Axalta Coating Systems (AXTA), Acushnet Holdings (GOLF), Madison Square Garden Networks (MSGN), Franklin Resources (BEN), and Howard Hughes (HHC).


Jonathan Boyar's London Value Investor Conference Presentation

Long: Axalta Coating Systems (AXTA):  Axalta is the world's 5th largest coatings company. Berkshire Hathaway own a large stake. It’s the no. 1 player in refinish (re-painting autos after accidents). Refinish accounts for 50% of their EBITDA and is the crown jewel. They have turned down two takeover offers. The company appears to be for sale, but they are waiting for the right offer. They are buying back shares. They are currently trading ats ubstantially less than an acquirer would pay at EBITDA 10x 2019. This type of company usually gets bought out for 13x to 15x.

Long: Acushnet Holdings (NYSE: GOLF) Acushnet designs, makes and sells golf products. It is a great consumer franchise. It’s not in a major index. It has minimal sell-side coverage. It generates 40% of revenues from consumer products. It’s a potential takeover target. Nike has left the golf product business.

Long: Madison Square Garden Networks (MSGN):  It’s a broadcasting company that was technically the parent from the spin out of Madison Square Garden (MSG). At the time of the spin-out it was carrying a lot of debt (5x levered). They have now reduced that to 3x. Once Disney, Fox and Comcast conclude their M&A activity one of them might be interested in bidding for Madison Square Garden Networks.  The market believes that cable operators might drop the channel. This is unlikely because sports are too important to cable subscribers and advertisers. The shares are cheap at FCF 7x.

Long: Franklin Resources (NYSE: BEN):  Franklin is an Investment management business. They are buying back a lot of stock. The family owns 40% of the company. If the shares get cheap enough the family might buy it outright.

Long: Howard Hughes Corporation (NYSE: HHC).  The real estate is difficult to value and the company is largely ignored by most investors. It is not in a major index. The CEO recently purchased a warrant for $50m that will expire worthless if the stock does not go up.


Be sure to check out the rest of the presentations from the London Value Investor Conference 2018.

New Graham & Doddsville Issue: Kingstown Capital Interview

Columbia Business School has released the Winter 2017 edition of its Graham & Doddsville newsletter.  In it, they feature a great interview with Guy Shanon and Michael Blitzer of Kingstown Capital.

They talk about their investment process and also outline their thesis for their largest position, Adient (ADNT), a spin-off from Johnson Controls (JCI).

The issue also features chats with Rupal Bhansali of Ariel Investments, Simeon Wallis of ValorBridge Partners, Jared Friedberg of Mercator, as well as Charles and Roy Studness of Studness Capital Management.

Lastly, this edition includes student investment pitches on short Foot Locker (FL), long Axalta Coating Systems (AXTA), and short Cardtronics (CATM).

Embedded below is Columbia Business School's latest Graham & Doddsville:



You can download a .pdf copy here.

You can also view past issues of this newsletter, including interviews with Meritage Group and MSD Capital.

Meritage Group Increases Axalta Coating Systems Stake

Jim Simons, founder of quant Renaissance Technologies, also has a family investment vehicle called Meritage Group managed by his son Nathaniel.  Meritage has filed a 13G with the SEC regarding its position in Axalta Coating Systems (AXTA).  Per the filing, Meritage now owns 5% of AXTA with over 12 million shares.

This is an increase of over 3.22 million shares in their position size since the end of the second quarter when they owned 8.78 million shares.  The filing was made due to activity on October 2nd.

Warren Buffett's Berkshire Hathaway is also involved in AXTA and bought around $28, slightly below where the stock is trading now.  Our most recent Hedge Fund Wisdom newsletter highlighted the thesis on AXTA if you want to catch up quickly on the name.

New Hedge Fund Wisdom Issue Just Released: Find Out Why Berkshire Hathaway Bought Axalta Coating Systems

A brand new issue of our Hedge Fund Wisdom newsletter was just released.  Subscribers please login at www.hedgefundwisdom.com to read it.

Inside The New Q2 2015 Issue

- Equity Analysis of Axalta Coating Systems (AXTA): Warren Buffett's firm bought $560 million worth of this stock during Q2 and it's only trading around 3% higher than where they purchased. Find out why they bought in the new issue.

- Equity Analysis of a Recent Stock Purchase by David Einhorn's Greenlight Capital

- Updated Portfolios of 25 Top Hedge Funds

- Consensus Buy/Sell Lists

- Commentary on Each Fund's Moves With Context


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