Notes From Great Investors Best Ideas Conference (GIBI) Dallas: Einhorn, Pickens, Gabelli

Below are some notes from the 2016 Great Investors Best Ideas (GIBI) conference in Dallas, TX.  It featured prominent investors sharing investment ideas to benefit the Michael J. Fox Foundation for Parkinson's research and Vickery Meadow Youth Development Foundation.


Notes From Great Investors Best Ideas (GIBI) Dallas Conference 2016

David Einhorn (Greenlight Capital):  Likes Mylan (MYL), thinks the Epipen situation is overblown relative to the rest of their business as they're mainly in generic drugs.  "So the earnings that we're looking at in 2018 are in the low $6's and we think only about 25 cents of it comes from EpiPen, so you're gonna earn something in the high $5s, excluding EpiPen and the stock's today in the mid $30's."

Contrasted the situation to that of Mallinckrodt (MNK) which bought QuestCor, a formerly highly shorted hedge fund name.  Their Acthar Gel drug has raised prices from $40 in 2001 up to a whopping $40,000 a dose but you don't hear about it as much because less people use it but says they're more exposed to potential health care focus on lowering drug prices given Acthar is a much larger portion of MNK's profit. 

Thinks General Motors (GM) is cheap and can earn its entire market cap before Tesla turns a profit.  Laid it out as follows:  stock could fall 3/4 and still has enough to pay the dividend.  Another quarter of the earnings are stock buybacks so you're basically getting a 5-6% share reduction, a 5% dividend so you're almost getting a 11% return just by sitting around. 

Thinks the Rite Aid (RAD) deal closes and separately also sees upside in Chemours (CC).  You can view his thesis on Chemours in Greenlight's Q2 letter.

Talked about the active vs passive investing debate.  Noted that "It seems to me that passive money management strategies are fundamentally momentum strategies.  In other words, the more the stock goes up, the more it becomes weighted in the index.  The more it becomes weighted in the index, the more important it becomes.  It continues going up, it doesn't ever revert."  Also called stocks like Apple (AAPL), Herc Holdings (HRI), and CIT (CIT) 'very cheap stocks.'



Boone Pickens (BP Capital):  Sees oil at $60 by the end of 2016 and up to $70 by the end of next year.  Likes EOG Resources (EOG) as well as Pioneer Natural Resources (PXD). Says 'you can't miss' on the later, argued that the only thing that can mess up his thesis is a recession.  Says PXD has a huge amount of oil.  (In the past we've posted how David Einhorn has/had been short PXD.)  Pickens says he's up 300% this year



Mario Gabelli (GAMCO Investors): Likes Herc Holdings (HRI), recent spin-off from Hertz Global (HTZ),  as a play on infrastructure: thinks EBITDA margins widen up to 1000 basis points.  Says the biz is growing 4-5% and is a highly fragmented biz but with 3 major players (other two being Ashtead (LSE:AHT) and United Rentals (URI).  Thinks stock triples over next 5 years.  He also posted about HRI on his Twitter account here.



Andy Beal (Beal Financial): He was pretty bearish and argued that government policies are basically depriving them of potential investment opportunities and basically said to get out of everything.  Talked up rental real estate.



Lisa Hess (SkyTop Capital):  Formerly of Loews, now manages SkyTop.  Her pick was Constellium (CSTM) as a proxy for more use of aluminum in automobiles etc.



Caroline Cooley (Crestline Investors):  Long Shutterfly (SFLY).  Says they have 60% market share and likes it as a growth play.  Said she's not worried about competition from the likes of Amazon (AMZN) and others like Snapfish.  Cited Apple trying and failing to compete with a similar service.  Says SFLY earns ten times that of its next biggest competitor, giving them a huge advantage.  Likes new CEO Chris North (previously of Amazon UK) and says company has some potential partnerships in the works and has bought back stock in the past.



Ray Nixon (Barrow Hanley Mewhinney & Strauss):  Talked about active vs passing investing.  Argued Buffett could potentially buy Phillips 66 (PSX) around $100 per share.  We've highlighted how Buffett has been accumulating PSX.


For more coverage of other recent investment conferences, head to our notes from the Sohn San Francisco conference.

Viking Global Increases Pioneer Natural Resources Position

Andreas Halvorsen's hedge fund firm Viking Global has filed a 13G with the SEC regarding its position in Pioneer Natural Resources (PXD).  Per the filing, Viking now owns 6% of PXD with over 8.96 million shares

This is up from the 6.39 million shares Viking owned at the end of the second quarter.  The filing was made due to activity on October 20th.

On the other side of this trade of course has been David Einhorn who has been short PXD.

We've highlighted other recent portfolio activity from Viking Global here.

Per Google Finance, Pioneer Natural Resources is "an independent oil and gas exploration and production company with operations in the United States. The Company focuses on production of oil, natural gas liquid (NGLs) and gas through development drilling, production enhancement activities and acquisitions of producing properties. The Company's properties include Spraberry/Wolfcamp oil field located in West Texas; the liquid-rich Eagle Ford Shale field located in South Texas; Raton gas field located in southern Colorado; the West Panhandle gas and liquids field located in the Texas Panhandle, and the Edwards gas field located in South Texas. The Company's operations include well stimulation and hydraulic fracturing. The Company's proved reserves include approximately 89 million Bbls (MMBbl) of oil, 42 MMBbls of NGLs and 317 billion cubic feet (Bcf) of gas. The Company owns interests in six gas processing plants and eight treating facilities.."

David Einhorn's Sohn Conference Presentation: Short Pioneer Natural Resources

We've posted up notes from the 2015 Sohn Investment Conference that just ended in New York.  David Einhorn of Greenlight Capital pitched a short of Pioneer Natural Resources (PXD) and embedded below is his full slideshow presentation.


David Einhorn's Sohn Conference Presentation 2015




Check out the rest of the Sohn Conference notes here.

Viking Global Boosts Pioneer Natural Resources Position

Andreas Halvorsen's hedge fund firm Viking Global has filed a 13G with the SEC regarding its position in Pioneer Natural Resources (PXD).  Per the filing, Viking has disclosed they now own 4.7% of the company with over 6.73 million shares.

This marks an increase of over 2.66 million shares in their position size since the end of the second quarter.  The filing was made due to activity on October 14th.  It looks like Viking took advantage of the big recent sell-off in shares.

You can view other recent portfolio activity from Viking Global here.

Per Google Finance, Pioneer Natural Resources is "an independent oil and gas exploration and production company with operations in the United States and South Africa. Pioneer is a holding company whose assets consist of direct and indirect ownership interests in, and whose business is conducted substantially through, its subsidiaries. The Company sells homogenous oil, natural gas liquid (NGL) and gas units. The Company provides administrative, financial, legal and management support to United States and South Africa subsidiaries that explore for, develop and produce proved reserves."

Boone Pickens Says Natural Gas Heading Higher, Likes National Oilwell Varco & Pioneer Natural Resources

We're posting up notes from the Great Investors' Best Ideas Investment Symposium in Dallas and next up is Boone Pickens of BP Capital Management.  The legendary energy man focused on, you guessed it, energy.

Pickens started his presentation talking about how the oil industry has changed over the past 10 years and how he thinks we can rebuild the economy off of cheap energy.  In politics, he thinks Romney will win the election and says he has the first true US energy plan (though it's not complete and he'd like to see more natural gas used).


Pickens on Natural Gas

One of the bolder calls of the conference was made when T. Boone argued that natural gas prices would rise to $4.50 or $5 in the next year and could see $6 by 2015.


Pickens' Stock Picks

At GIBI, Pickens recommended two stocks.  His first pick was National Oilwell Varco (NOV).  It currently trades at just under $74 and he thinks it will see $100.  He points to the company's huge shale opportunity for development and that there's still support for oil domestically and internationally.

His second pick was Pioneer Natural Resources (PXD), which he likes due to their great assets, pointing to 900,000 acres (of which he specifically mentioned the Permian basin assets).  He says they'll be drilling for a while.  The stock currently trades at just under $106 and he thinks it sees $150.


For the rest of the presentations, head to notes from the Great Investors' Best Ideas conference.

Analysts' Best Stock Picks For 2011

Raymond James is out with its Analysts Best Picks for 2011 report. We highlighted their picks from 2010 and those performed pretty well with a 22.3% return. In fact, their annual selections have a 10 year average return of 12.4%.

The report details analysis of the fundamentals, growth prospects and risks associated with each stock. They've selected 13 stocks again this year and in alphabetical order, here are the Analysts' Best Stock Picks for 2011:

- Allscripts Healthcare (MDRX)
- Bank of America (BAC)
- CONSOL Energy (CNX)
- Covidien (COV)
- Digital Realty Trust (DLR)
- Equinix (EQIX)
- Halliburton (HAL)
- HealthSouth (HLS)
- Lincoln National (LNC)
- NVIDIA (NVDA)
- Panera Bread (PNRA)
- Pioneer Natural Resources (PXD)
- Stanley Black & Decker (SWK)

There are some pretty familiar names in that bunch and a few prevalent themes. They've included multiple plays in the health space with MDRX, HLS, and COV. Also, technology is represented with two names in NVDA and EQIX. Also, energy/natural resources are abundant via PXD, CNX and HAL. We wanted to highlight a few of their selections below:

Bank of America (BAC): This name is interesting because it was also on the analysts' best picks list for 2010. However, over the course of last year the stock declined. Raymond James sees the price depreciation as further opportunity and is again a buyer of shares this year. Not to mention, some of the largest hedge funds in the game have sizable stakes in BAC, including John Paulson.

Halliburton (HAL): Arguably, the time to buy this name was during the Gulf oil spill when uncertainty abounded and the stock price was depressed. Yet, RJ feels the company will see near-term earnings momentum and a rebound in international activity. We've talked about how hedge funds are betting on higher oil prices as well.

Equinix (EQIX): This tech name is intriguing because it saw some volatility last year. And as we detailed in our Hedge Fund Wisdom newsletter months ago, a large shareholder (Shumway Capital) was reducing its position size and could be partially responsible for the volatility. Raymond James likes the company's dominant market position in the colocation market and data center industry.


Keep in mind that obviously with the market rally, a lot of these names have been bid up significantly already. Some strategists would obviously advocate waiting to purchase some of these names given that they're extended and knowing that the market doesn't go straight up forever. RJ's Chief Investment Strategist Jeff Saut expects a buyable pullback.

Embedded below is the full research on Analysts' Best Picks for 2011:



You can download a .pdf copy here.

For further research from this shop, head to the previous best stock picks for 2010 as well as Jeff Saut's risk management principles.