Value Investing Congress Notes: New York 2013

Below are notes from the 2013 Value Investing Congress in New York from both days.  Click the links below for each speaker's presentation:


Value Investing Congress Notes: Both Days


Jeff Ubben (ValueAct): Long Willis Group (WSH)

Jeffrey Smith (Starboard Value): Long Wausau Paper (WPP)

Mick McGuire (Marcato): Long United Rentals (URI)

Cameron & Tyler Winklevoss (Winklevoss Capital): On Bitcoin

Donald Yacktman (Yacktman Funds):  Process & market thoughts 

Alex Roepers (Atlantic Investment Management): His 5 new ideas 

Guy Gottfried (Rational Investment Group): 2 Canadian longs

Michael Castor (Sio Capital): Various healthcare plays

John Mirshekari (Fidelity Investments): 2 investment ideas

Chris Mittleman (Mittleman Brothers): Azteca, CMIC Holdings

Clifton Robbins (Blue Harbour Group): Chico's (CHS)

Mark Boyar (Boyar Value Group):  Long Madison Square Garden (MSG)

Joe Altman & Chris Kyriopoulos (COMPOUND): Long Ascent & Covanta

Harvey Sawikin (Firebird Management): Long Gazprom Neft

Rahul Saraogi (Atyant Capital): On India

Charles de Vaulx (IVA): Market thoughts

Whitney Tilson (Kase Capital): Short K12 (LRN)

Daniel Miller (Gabelli Focus Five): 3 ideas 

Evan Vanderveer & David Shapiro (Vanshap Capital): 2 investment ideas

Carl Chen & Tom Lu (Temple Honor Asia): 2 stock picks

Chris Mayer (Capital & Crisis): Various bank picks

Value Investing Challenge Winner: Long Ashland (ASH)

Value Investing Challenge Runner-Up: Short Life Lock (LOCK)

Value Investing Challenge Runner-Up: Short LifeLock (LOCK)

We're posting up notes from the 2013 Value Investing Congress in New York.  Next up is the runner-up in the Value Investing Challenge competition.  David Swartz of Pacific West Land pitched a short: Life Lock (LOCK).


David Swartz's Value Investing Congress Presentation

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Short Life Lock (LOCK)

Claims to protect against identity theft.  He says they are misrepresenting their ability to protect against identity theft.  Weak product, not useful, basic product, 73% of members, doesn't even do credit report checks.  $10/month basic service has no credit monitor.

 

One of the founders had his identity stolen several times.  Own father accused him of using his AMEX to run up $150k in charges.  Name does not even appear in Life Lock’s prospectus.  Bankruptcies, lawsuits, failed businesses, etc.

 

The very origin of the company is a fiction.  CEO: Todd Davis, co-founder.  Put his own SSN in ads, his identity has been used in 13 separate incidents.  He's been selling stock every month. 

LOCK just bought ID Analytics, paid $186M in cash, for 7x revenue.  Business is unprofitable. 

LOCK has $1.3B market cap, 22x BV, 38x P/E forward eps.  Spending $170M on sales and marketing.  Has a public comp, INTX.  Its TEV/sub is only $39 vs. LOCK of $393. 

Price target: $5.

Be sure to check out the other presentations from the New York VIC here.