Reno Giancola's Sohn Canada Presentation: Long Great Canadian Gaming

We're posting up notes from the Sohn Canada Investment Conference 2015 (Capitalize For Kids.)  Next up is Reno Giancola from Alignvest who pitched a long of Great Canadian Gaming.

Reno Giancola's Capitalize For Kids Presentation

-    Long Great Canadian Gaming
-    50% upside
-    Rod Baker – CEO since 2009
-    Reasons for upside: underlevered, strong ROIC, Unique assets
-    Vancouver BC location with many VIP gamblers, have 50% market share in BC
-    River rock is a unique assets with revenue per table of 2x the market average
-    Relaunched Hard Rock Casino Vancouver due to construction in the area and should reach previous revenue levels in 2016
-    Ontario gaming is an area for growth as bundles are sold, they have purchased 1 for $50MM and expect 20% ROIC on the purchase
-    Buybacks will drive further shareholder value
-    Can grow earnings 45% if they releverage
-    Own the real estate, trend to spin off assets into REITs, could unlock additional value
-    $31-32 price target excluding buybacks and M&A
-    Cheap compared to Australian gaming industry, comparable due to Asian consumers


Be sure to check out the rest of the presentations from the Capitalize For Kids Conference.

Jeff Hales' Presentation on Corby Spirit & Wine: Capitalize For Kids Sohn Canada Conference

We're posting up notes from the Capitalize For Kids Sohn Canada conference that just took place.  Next up is Jeff Hales of Alignvest Capital who pitched long Corby Spirit & Wine.


Jeff Hales' Sohn Canada Presentation

Co-runs a Long Short equity strategy with a focus in Canada. Mentioned the Canadian investment market has a less competitive business environment than the US (and other markets), allowing for more competitive advantages.

Pitched LONG Corby Spirit and Wine, a leading marketer of spirits and importer of wines, represents 25% of the top 25 top selling spirit brands. Currently has net cash, generating high ROIC for many years (along with FCF) and has owned brands (Wiser’s) and agency brands (distribution). Given their ROIC, Canadian spirits franchise is a great business.

Some potential catalysts exist which make this story interesting. It recently sent up an agreement to use Pernod Ricard to launch JP Wisers into the US (much bigger market than Canada). It was able to do so given their already strong relationship with Pernod (owns ~48% of commons). The whiskey market is seeing secular growth, seeing the fastest growth since 1960’s, about 2 or 3x other spirits. Average M&A multiple is around 18x EBITDA (50% upside). If Corby’s traded on pare with industry average of 16x EBITDA, price target around $31. Although, industry comps can mislead given the large players involved, while Corby’s is still a sub-billion dollar business.

Be sure to check out the rest of the presentations from Capitalize For Kids Sohn Canada here.