Christopher Hansen Long Zillow: Sohn New York Conference

We're posting up notes from the Sohn New York Investment Conference.  Next up is Christopher R. Hansen of Valiant Capital Management who presented long Zillow (ZG).

Chris Hansen's Sohn New York Presentation

Long Zillow
•    $7 billion market cap, $6 billion EV
•    70% market share
•    Currently sells leads. Potential to move to taking part of the commission
•    $1.2 billion in revenue. $350 million in EBITDA
•    Huge potential in flipping homes. Has all the data. Has all the traffic of people looking to buy homes. Some people willing to sell for a little less in order to get cash quick and not deal with selling their house
•    Will get into mortgage origination business. 50% to 75% attach rates
•    Will get fees on this flip. Don’t even need to make money on the actual flip. Will turn over inventory 6 times (30 to 90 day holds) a year which will make it a good margin business


Be sure to check out the rest of the Sohn New York conference presentations.

What We're Reading ~ 3/18/15

The Checklist Manifesto: How to Get Things Right [Atul Gawande]

Ray Dalio warns of 1937-style rate risk [FT]

A dozen things learned from David Tepper about investing [25iq]

Interview with short-seller Marc Cohodes [First Adopter]

In praise of short sellers [New Yorker]

Lumber Liquidators' campaign of distraction and deception [Seeking Alpha]

Crispin Odey says following China could lead to recession [Sydney Morning Herald]

Why the smart money is betting on WWE [First Adopter]

A pitch on Interactive Brokers [Value Venture]

Live Nation Entertainment: an unregulated monopoly? [PunchCardBlog]

A look at Softbank [Institutional Investor]

With the benefit of hindsight [Morgan Housel]

Stock performance before, during, and after recessions [Wealth of Common Sense]

The majority of people are struggling to save for retirement [Wealth of Common Sense]

The future of the four horsemen: Amazon, Apple, Facebook & Google [YouTube]

Consumer behavior across pay-TV, VOD, and OTT [Digitalsmiths]

Zillow, the industry, and reading the tea leaves [Notorious Rob]

Andrew Left's Value Investing Congress Presentation: Short Zillow/Trulia

We're posting up notes from the 2014 Value Investing Congress in New York. Next up is Andrew Left of Citron Research who presented a short of "Zulia", or the combined Zillow / Trulia entity.


Andrew Left's Value Investing Congress Presentation

Shortselling in general: "I keep Xanax in business"
Shortselling in general: two types, when you need something to change vs. when you need things to stay the same (time on your side). Z is in the latter camp. 

Big disconnect between the reality of the residential real estate market (people driven; agents don't differentiate b/n various listing services) vs. the Wall Street hype. 

Business model is providing commodity information (listings) that they do not own and selling the advertising space next to it to agents. Paying agents also block other agents from being displayed on the side of the paying agent's listing. 65% of revenue is agents paying, 25% is display ads, 10% mortgage-related. Agents don't like the business model at all. 

The fundamental problem with Zulia is that the total addressable market ("TAM") is considerably smaller than commonly believed. 

Based on Citron research and certain disclosures, about 40% of the inventory is unavailable for sale. 

Zillow's low-value  "deals" with Douglas Elliman and ReMax are known but they also appear to have special terms with larger regional firms and Keller Williams.  Deals indicative that Z provide little to no value to its customers. 

These corporate deals make the full-price clients very upset; also Z has been reducing the number of protected listings a paying agent might have. 

Price target $22.50 based on comps, $42 based on a stable leadgen EBITDA business. 


Q&A: Compared to the Australian counterparts, Z has no real IP.

Q&A: Long idea BBRY. Internet of things play/secure mobile data transmission. CEO superstar. Handsets no longer a deciding factor. IBM/Apple partnership to enter space validates BBRY's business.


Be sure to check out the rest of the Value Investing Congress presentations here.

What We're Reading ~ Analytical Links 8/13/14

Zero to One: Notes on Startups, or How to Build the Future [Peter Thiel]

The Buffett formula - how to get smarter [Farnam Street]

A look at Alstom as a potential sum of the parts play [Value and Opportunity]

Value stocks in market corrections [Brooklyn Investor]

What does sentiment suggest for future returns? [Fat Pitch]

What will happen when companies stop buying back so much stock [Business Insider]

Zillow shares could fall by half [Barrons]

Taking AIG from 'sucks' to 'rocks' [Business Week]

Why you should keep an eye on Sequoia Fund [Asset Builder]

Investors move into cash, bracing for market sell off [IFRE]

The power of shareholder yield [What Works on Wall Street]

Unfortunate realities of the investment business [Wealth of Common Sense]

Buy stock pickers, avoid sector pickers [Morningstar]

Tiger Global Starts Zillow Stake

Chase Coleman and Feroz Dewan's hedge fund has filed a 13G on shares of Zillow (Z).  Per the filing, Tiger Global now owns 9.5% of the company with over 3.1 million shares.

This is a brand new position for the hedge fund as they didn't report ownership of any shares at the end of 2013.  The filing was required due to activity on April 21st.

It should be noted that Tiger Global's venture capital arm has also recently made an investment in fellow real estate company, RedFin.  They were a part of a $50 million round about six months ago.

Lee Fixel, who runs the VC arm, talked about their investment in a press release: "The real estate industry is ready for an innovator who understands how business can be transformed by putting the customer first, as we’ve seen with many industries before. We are confident this strategy will create significant value for all stakeholders over the long term."

You can view some of Tiger Global's other recent portfolio activity here.

Per Google Finance, Zillow is "provides real estate and home-related information. Zillow provides products and services to help consumers through every stage of homeownership, such as buying, selling, renting, borrowing and remodeling. The Company makes home-related decisions and enables homeowners, buyers, sellers and renters to find and connect with local professionals. Individuals and businesses that use Zillow have updated information on more than 37 million homes and have added nearly 100 million home photos."

What We're Reading ~ Analytical Links 9/4/13

The Manual of Ideas: The Proven Framework for Finding the Best Value Investments [Amazon]

Risk is not a four-letter word [Herb Greenberg]

How the Verizon-Vodafone deal was sealed over gym talk & a breakfast [Globe & Mail]

Vodafone (VOD) spreadsheet post-deal [MicroFundy]

Is discounted cashflow the best way to value a company? [Google Plus]

Profile of billionaire Jorge Lemann [BusinessWeek]

MSFT: Ballmer out, ValueAct in - get ready for the next shoe to drop [All Things D]

Microsoft / Nokia: the deal that makes no sense [Stratechery]

Why is chicken more expensive? Ask McDonald's [BusinessWeek]

The biggest risk Zillow (Z) faces isn't what you think it is [LittleBear]

How 'Teslanaires' made fortunes on Tesla stock [Sun-Sentinel]

CNBC ratings hit 20-year nadir [NYPost]

What We're Reading ~ Analytical Links 7/31/13

Inflationistas and the global supply shock [FT Alphaville]

Equity long short funds: do they provide return-free risk? [Reformed Broker]

Is Caterpillar (CAT) nothing but the Dow's most overpriced dog? [ZeroHedge]

Interview with the 2013 Ira Sohn Contest winner [Santangels Review]

Thoughts from the Valuex Vail Conference [Institutional Investor]

A dozen things I've learned from Seth Klarman [25iq]

You don't know as much about bonds as you think you do [Term Sheet]

The hardware revolution is upon us and why it matters [True Ventures]

A pitch on Cedar Fair (FUN) [Broyhill]

The irrelevance of Microsoft (MSFT) [Benedict Evans]

Why online consumers love Zillow and Trulia [Realtynex]

The cult of home ownership is dangerous [FT]

Goodbye mail carrier, hello cluster mailboxes [CNN]

What We're Reading ~ Analytical Links 7/10/13

On saving investors from themselves [WSJ]

Smart and stupid arguments for active management [Reformed Broker]

Incorporating right-brain thinking into your investment process [Investing 501]

How gold lost its luster [The Big Picture]

A dozen things I've learned about the psychology of investing [25iq]

Steel: an inferno of unprofitability [The Economist]

On dealing with a rising interest rate environment [WSJ]

30-year mortgage rates surge to highest level in 2 years [Zillow]

The Dow Jones Index between 1789 and today [Go Infront]

MJN, ABT, NSRGY: China investigates foreign makers of baby formula [WSJ]

DVA: dialysis pay would drop $970 million under CMS proposed rule [BNA]

DIS: An interview with head of ESPN John Skipper [HollywoodReporter]

Talk of mergers stirs cable TV's big players [NYTimes]

Labor market spider chart [Federal Reserve Bank of Atlanta]

The best investment advice you'll never get [San Francisco Magazine]

Merchant banks make a comeback [WSJ]

The scam Wall Street learned from the mafia [Rolling Stone]

A report on Corrections Corp of America (CXW) [Scribd]

Introducing the Winklevoss Bitcoin trust [FT Alphaville]

What We're Reading ~ Analytical Links 3/20/13

What matters more in decisions: analysis or process? [Farnam Street]

The stock market and the economy are two very different animals [Abnormal Returns]

One of the most sentiment-driven rallies ever [Reformed Broker]

A pitch on retailer Coach (COH) [Old School Value]

Walt Disney (DIS): Can ESPN sustain its fee subscriber growth? [Trefis]

A small investors' guide to activist investing [Fool]

When will interest rates rise? [LearnBonds]

Technical tools for helping to identify possible market tops and bottoms [Chris Perruna]

Confirmation bias and the importance of asking "why might I be wrong?" [Incblot]

Why Redfin, Zillow (Z) and Trulia (TRLA) haven't killed off real estate brokers [BW]

This is the future of TV [Quartz]

Is it time to short Canada? [Bonddad]

How to beat Amazon (AMZN), Best Buy (BBY) edition [WSJ]

The scariest statistic about the newspaper business today [The Atlantic]

Short sellers flee the scene [WSJ]

10 signs stocks are about to tumble [Marketwatch]

Should investors be on Twitter? [Felix Salmon]

March madness analytics: blind bracket tool [WSJ]

Citadel Starts Zillow Stake

Ken Griffin's investment firm Citadel Investment Group just filed a 13G with the SEC regarding shares of Zillow (Z).  Per the filing, Citadel has revealed a 6.1% ownership stake in the company with 1,588,436 shares.

This is a brand new position for the firm and the disclosure was required due to portfolio activity on November 19th.  Shares of the real estate information site dropped recently after the company issued disappointing guidance.  Zillow recently announced it would be acquiring HotPads in an effort to broaden its reach in the housing rental space.

As of the end of the third quarter (September 30th), other top institutional holders of Z shares included JAT Capital, Miura Global, Glade Brook Capital, and more.

Per Google Finance, Zillow is "a real estate information marketplace. The Company provides information about homes, real estate listings and mortgages, through its Website and mobile applications, enabling homeowners, buyers, sellers and renters to connect with real estate and mortgage professionals. The Company’s database has more than 100 million United States homes, including homes for sale, homes for rent and homes not currently on the market. Individuals and businesses that use Zillow have updated information on more than 27 million homes and added more than 50 million home photos. These profiles include detailed information about homes, such as property facts, listing information and purchase and sale data."

For those interested, we've also recently posted up some of Citadel's short positions.

Steve Cohen's Hedge Fund Has Been Buying These 10 Stocks

Steve Cohen's hedge fund SAC Capital has been busy filing 13G's with the SEC the past few days.  In total, they've filed ten different times.  Cohen was named one of the top 25 highest earning hedge fund managers of 2011.  Here's his fund's latest activity:


1. Sequenom (SQNM) - The hedge fund has boosted its holdings in SQNM by quite a large margin since the end of last year.  They now own 5.4% of the company with 6,128,919 shares. This is due to portfolio movement on May 7th.

Per Google Finance, Sequenom is "a diagnostic testing and genetics analysis company. The Company is focused on providing products, services, diagnostic testing, applications and genetic analysis products that translate the results of genomic science into solutions for biomedical research, translational research, molecular medicine applications, and agricultural, livestock and other areas of research."


2. Zillow (Z) - This is a brand new position for SAC Capital as they did not report a stake in their last disclosure at the end of 2011.  They now own 5% of Zillow with 1,011,501 shares due to activity on May 7th.

Per Google Finance, Zillow is "a real estate information marketplace. The Company provides information about homes, real estate listings and mortgages, through its Website and mobile applications, enabling homeowners, buyers, sellers and renters to connect with real estate and mortgage professionals."


3. Western Refining (WNR) - SAC Capital has increased its stake by a whopping 287% since the beginning of the year.  They now own a 5.4% ownership stake in the company with 4,860,883 shares due to activity on May 4th.

Per Google Finance, Western Refining is "an independent crude oil refiner and marketer of refined products and also operates service stations and convenience stores. WNR operates in three business segments: the refining group, the wholesale group, and the retail group."


4. Yelp (YELP) - The company completed its initial public offering at the beginning of March this year and this is a brand new position for Cohen's hedge fund.  They now own 415,847 shares, or 5.1% of the company.  They were required to file a disclosure due to crossing a regulatory threshold in trading on May 4th.

Per Google Finance, Yelp "connects people with local businesses. Its users contribute reviews of every type of local business, from restaurants, boutiques and salons to dentists, mechanics and plumbers. Its platform provides local businesses with a range of free and paid services, which help them to engage with consumers at moment when they are deciding where to spend their money."


5. Movado Group (MOV) - SAC Capital now owns 5.11% of Movado Group as they've built a position of 943,890 shares.  They only owned a tiny 11,347 share position at the end of 2011 so they've certainly ratcheted up their stake this year.

Per Google Finance, Movado "designs, sources, markets and distributes fine watches. The Company’s portfolio of brands consists of Movado, Ebel, Concord, ESQ, Coach Watches, HUGO BOSS Watches, Juicy Couture Watches, Tommy Hilfiger Watches and Lacoste Watches. The Company operates in two segments: Wholesale and Retail."


6. Accretive Health (AH) - This stake has been increased since their last disclosure and SAC now owns 5% of the company with 5,005,600 shares due to activity on May 4th.

Per Google Finance, Accretive Health is "a provider of services to the healthcare providers. The Company’s three offerings are revenue cycle management; quality and total cost of care, and physician advisory services. Its integrated revenue cycle management service offering helps the United States healthcare providers to manage their revenue cycles, which encompass patient registration, insurance and benefit verification, medical treatment documentation and coding, bill preparation and collections."


7. Walter Energy (WLT) - The hedge fund disclosed ownership of 3,143,160 shares of WLT due to trading activity on May 3rd.  They now own 5% of the company and have boosted their holdings by around 30% since the end of 2011.

Per Google Finance, Walter Energy is "a producer and exporter of metallurgical coal for the global steel industry and also produces steam coal, coal bed methane gas (natural gas), metallurgical coke and other related products."


8. Santarus (SNTS) - Cohen's firm started a new position in Santarus and now own 3,231,392 shares, or 5.2% of the company.

Per Google Finance, Santarus is "a specialty biopharmaceutical company focused on acquiring, developing and commercializing products that address the needs of patients treated by physician specialists."


9. Clearwater Paper (CLW) - This position is slightly different in that SAC filed an activist 13D on the name.  As of the beginning of May, they now own 1,640,000 shares (or 7.2% of the company).  In recent trading, they were out purchasing shares on April 26th, 27th, and 30th at prices in the high $32.xx and low $33.xx.

The hedge fund feels that Clearwater would be worth more if it split up.  They feel that the sum of the parts are worth more separate than in their current combined entity.  SAC portfolio manager David Rosen wrote a letter to the company as SAC is currently the third largest shareholder.

They feel that the company's consumer products division is worth between $990 million and $1.4 billion.  They argue that the pulp and paperboard division is worth $770 million to $960 million.  But as of recent trading, Clearwater's entire market cap is only $786 million.


10. Select Comfort (SCSS) -SAC Capital now owns 5.02% of Select Comfort (SCSS) with 2,848,996 shares.  At the end of 2011, they only held a tiny position so they've boosted their holdings by over 1,500% since then.

Per Google Finance, Select Comfort is "a bed manufacturer and retailer. The Company designs, manufactures, markets and distributes the SLEEP NUMBER bed and other sleep-related products. The Sleep Number bed features DualAir technology, which allows couples to adjust each side of the mattress to his or her level of firmness."


And if you missed it, we've posted up even more of SAC Capital's portfolio activity here.