Larry Robbins' 4 Long Ideas at Invest For Kids Chicago

We're posting up notes from Invest For Kids Chicago 2014.  Next up is Larry Robbins of Glenview Capital who pitched Tenet Healthcare (THC), eBay (EBAY), Teradyne (TER), and Cadence (CDNS).


Larry Robbins' Invest For Kids Chicago Presentation

•    More constructive than average on the long side. Portfolio trading at ~13x PE.
•    Excess cash at corporates remain high. Akin to Michael Jordan sitting on the bench looking to put up points.
•    Avg HY company can borrow at 6.4% pre-tax. Never been as cheaper or deeper.
•    Shareholder engagement at all time high. Notes Jeff Ubben at MSFT. Ideas: Tenet, EBay, Teradyne, Cadence


•    Tenet Healthcare (THC) – hospital stocks traded down 10% recently. Strong core growth, operating leverage, Vanguard health M&A, reforms provide multi-year growth tailwind, hidden undervalued conifer asset, forward year capital deployment opportunity, industry consolidation all adds up.
•    Unemployment is down and insurance is up which helps. M&A synergies are ramping and achievable for the Vangaurd transaction.
•    Only 7MM Americans have signed up for exchanges, half already had insurance. Vast majority in front.
•    Most hospitals are not for profit. Not just charter, but also income statement.
•    11 hospitals for every person in the house of rep. They are not going to bankrupt the hospital operators (big employers).
•    #1 self-pay/uninsured has gone down. #2 amount of Medicare coverage has increased around 11%. Some cases mid twenties. More people can pay their builds = more profits and revenues for hospitals.
•    Why is the health care bill insulated?? Repeal would take 60 votes from senate and a signature from the President. Want to go after the medical device tax, individual mandate (doesn’t affect hospitals). They are going after the parts not the whole.
•    Public approval for ACA growing.
•    Stocks traded down, provided entry point.
•    Tenet has a 90% + return on repurchases.
•    As they digest vanguard, instead of de-levering, should take advantage of the credit markets to maintain 5x leverage. Could buyback all of the company all else equal (won’t happen, since the share price wouldn’t stay still).
•    Companies who consistently repurchased shares have created value, not a short-term play.
•    Hidden gem is a RCM. Generates $200MM in EBITDA, RCM companies garner higher multiples. Conifer has higher growth than comps on both revenue and EBITDA. Peers trade at 16x EBITDA, versus Tenet at 8x for the whole.
•    If you took every publicly operated hospital operator and combined them, that would be only a 13% market share, so further consolidation is possible, especially considering synergies.
•    Thinks the monetization of Conifer and consolidation are possible catalysts.


•    eBay (EBAY) is the next idea.
•    2/3 of Ebay is the market place and 1/3 is Paypal. Third business is hoarding cash ($15b).
•    Doing the spin-off after shareholder pressure.
•    Growing revenue at 14%, EPS at a higher clip at 15x earnings give or take.
•    Like Ebay as it grows twice as fast as everything else. Higher margins.
•    Back out Paypal at 16x FY16E earnings, creating marketplace at ~12x.
•    People are scared of Paypal competition. It is like being scared of the 12th edition of the Halloween movie.
•    Opportunity to buy two great businesses at a cheap price. Once they separate businesses, marketplace will lever up to 2x net debt. Allow for them to buy ~22% of the PF company.
•    Thinks they can handle higher leverage of 3x – 4x.
•    Event-driven guys left eBay due to other problems (Shire/Fannie/Ebola). Allowed for Glenview to do time arbitrage.
•    Doing everything ppl want them to do. Just have to wait for the actual event to happen. Time arbitrage.
•    Ebay is like a divorce. One is focused on a lifetime of shopping, the other focused on a lifetime of payments.
•    Might be attractive to other players. May want to do a SA/JV or acquisition.
•    Acquirers could pay 22x earnings or more and be hugely accretive.


•    Teradyne (TER) – semiconductor test equipment, lots of cash.
•    High market share (although shrinking), their share has grown at 47% share. They love oligopolies due to smart pricing.
•    Need to fix the lazy balance sheet.
•    Victim of their own success. Buy rates troughed and are now peaking up. 18% is the wireless test business, does have cyclical components.
•    Has $1.2B of cash, don’t need  that much cash,


•    Cadence Design (CDNS) is the next name. Same opportunity as above. Revenue growth is accelerating. Months away from launching a new hardware emulation platform.
•    Overcapitalized balance sheet.

For more from this hedge fund manager, Robbins recently shared other investment ideas at Capitalize For Kids Sohn Canada as well as the Robin Hood Investors' Conference.


Be sure to check out the rest of the hedge fund presentations from Invest For Kids Chicago here.

Wally Weitz Long Liberty Media: Invest For Kids Chicago

We're posting up notes from Invest For Kids Chicago 2014.  Next up is Wally Weitz of Weitz Investment Management who pitched long Liberty Media.


Wally Weitz's Invest For Kids Chicago Presentation

Idea: Liberty Media 

•    Split up yesterday when split into two parts. Liked them together or separate. Cheap due to the complexity of Liberty.
•    Weitz are value investors in the Buffett mold, think like business owner, IV is the discounted value of cash flow.
•    Think of it as an investment company built to evolve over time.
•    All Liberty companies follow the same game plan. Generate FCF, maintain appropriate leverage, buyback shares and sell in a tax efficient manner.
•    Like the main components of Liberty Media/Broadband (Siri/CHTR). Both are subscription businesses.
•    Liberty Broadband (LBRDA / K) owns ~26% of Charter and is doing a rights offering to raise cash. Trades for $50, think Broadband is worth $58 per share. If you like CHTR, this is a cheap way to own it.
•    Liberty Media you get extra bonuses (hidden assets/options). They won a court case with Vivendi and Vivendi owns them roughly ~$3 per share (might take time), and the Atlanta Braves. Thinks it could be worth more than the ~$600MM current price.
•    Own 27% of Live Nation, which owns ticketmaster which spent years going over a tech overhaul that improves margins.
•    Broadband owns Charter shares, cash and Time Warner Cable shares. Also the opportunity for Malone to buy other cable subscribers outside of CHTR and then sell it into a parent company through a reverse Morris trust (did this with Direct TV). Always optionality. Malone always has multiple plans.

Weitz was also recently interviewed in the latest issue of Graham & Doddsville.


Be sure to check out the rest of the hedge fund presentations from Invest For Kids Chicago here.

Steve Kuhn's Presentation on Japan at Invest For Kids Chicago

We're posting up notes from Invest For Kids Chicago 2014.  Next up is Steve Kuhn of Pine River Capital who talked about Japan.


Steve Kuhn's Invest For Kids Chicago Presentation

•    Talk about Japan.
•    Heard a comment – “a land alpha goes to die”.
•    Traded it for 3 yrs on a night desk trading Japanese convertible bonds until 4am at Citadel.
•    #3 economy in the world.
•    Japan is interesting as Japanese stocks are still cheap relative to bonds.
•    Japanese corporate governance: the sun is rising. It is improving and the trend is your friend.
•    “Boring is beautiful”.
•    Pension funds are increasing their equity allocations, especially GPIF, which is material.
•    Long cheap, low volume, higher quality companies with strong track records. Short expensive, high volume, high beta companies with poor track record in return on capital and shareholder friendliness.
•    Their long portfolio trades for 12.2x PE, 8.1x EBITDA, 5% FCF yield, 11% ROE and has returned capital. Short portfolio trades for 23x PE, 11.4x EBITDA and lower returns on capital.
•    Looking to fix corporate governance such as a stewardship code, cross shareholding reduction and adding external directors.
•    GPIF looking to boost share allocation to about ~25%.
•    Japan companies have increased their share repurchases which is up 49% YoY. Dividends also increasing.
•    Cash holdings are still at near record highs – a positive for share repurchases and dividends.
•    62% of companies now have outside directors, up from 32% in FY04. Still in last place when compared to other major economies.
•    Takeover defenses peaked in FY08 and are steadily declining.
•    Easy way just to buy the JPNK index.


Be sure to check out the rest of the hedge fund presentations from Invest For Kids Chicago here.

Sam Zell's Talk at Invest For Kids Chicago

We're posting up notes from Invest For Kids Chicago 2014.  Next up is the fireside chat that Michael Sacks had with Sam Zell of Equity Group Investments.


Sam Zell's Talk at Invest For Kids Chicago

•    Comment on the election (Zell): I don’t know if America is better but there is a God.
•    Zell thinks yesterday was a big day. Big day from a number of different perspectives. (1) if results different, serious risks that the President legislates his way through edicts; (2) creates an opportunity for Obama to compromise and get something done through mutual agreement.
•    Everyone is excited that the stock market is at an all-time high. Experience is that USA can’t do well if Japan/Europe/Russia in trouble.
•    “Best looking gal in the whore house – it’s still a whorehouse” On USA and the rest of the countries
•    America needs growth. Whatever happens, need to refocus on growing company, which will begin to solve the trouble of inequality.
•    Where is Zell finding opportunities today to deploy capital? Some markets outside of the USA which are interesting - #1 country is Colombia. Major benefactor of the free trade agreement. Because of the reduction of FARC, Colombia production of oil increased due to access. Investing significantly in Colombia.
•    Optimistic on India. Difficult environment to operate in, many burned. Modi is doing good things.
 •    Real estate is where it was a couple years back, very attractive from a price point.
•    Always opportunities, look at individual situations. That is what they do.
•    Any common investment principles? They have always been industry agnostic. You get business or you don’t.
•    In the 80’s consolidated rail cars. No one liked it, but loadings where flat and they scrapped 65% of the cars – lots of money was made when those lines crossed.
•    Up until the 80s only did real estate, pivoted to opportunity.
•    When you commoditize trust, you dramatically increase risk.
•    If Zell was in his twenties to thirties what would he do? His response was the generations often thought the older generation had it easier. Zell and Lure’s success tied to the fact they didn’t know what they couldn’t do.
•    Current environment smells a lot like the dotcom boom in regards to valuations. Amazon is one example.
•    On philanthropy, approach from the perspective that anyone can put their name on the building by just giving money. They don’t want to do that. They support topics across colleges such as entrepreneurship and creative writing.
•    Talked energy briefly – noted cost of production in Saudi Arabia is cheaper than the USA and that the market went bananas on US oil for a bit.


Be sure to check out the rest of the hedge fund presentations from Invest For Kids Chicago here.

Mason Hawkins Long Level 3 Communications: Invest For Kids Chicago

We're posting up notes from Invest For Kids Chicago 2014.  Next up is Mason Hawkins of Southeastern Asset Management who pitched long Level 3 Communications (LVLT).


Mason Hawkins' Invest For Kids Chicago Presentation

•    Founded 1975, 40 years ago. $35 billion AUM
•    Run the Longleaf Partner Funds with a long term value orientation.
•    Purchase companies at deep discounts to intrinsic value, under three appraisal methodologies (NAV, FCF, private market comps). Generally engaged with the investees and boards in order to build IV per share. They are not passive investors.
•    “Business, People, Price” is their operating method.

Idea: Level 3 Communications (LVLT) 

•    Global telecom company which provides infrastructure to connect consumers and businesses onto the internet.
•    One of the largest fiber networks with a reproduction value in excess of $45B.
•    Rapidly growing FCF per share with modest additional capex as demand for broadband triples over next five years.
•    118K intercity route miles, 60K metro route miles in 170 major metro markets, 33K sub-seas miles. 38K buildings on market. 400K enterprise businesses within 500 ft of fiber network.
•    Large salesforce and 10 billion in NOLs which should shield pre-tax profits.
•    Street is overlooking the NOLs and extra assets overlooking after-tax FCF.
•    Have a low single digit market share but offer the most comprehensive portfolio of secure, managed network based enterprise solutions should allow for faster growth than the competition.
•    Most compelling investment due to the critical nature of their service offerings, and the fact that large customers in growing industries rely on the company. It’s the backbone.
•    CEO focused on building intrinsic value. Transformed from long-haul into an enterprise solutions company.
•    Since Jeff Storey took over as CEO, gross margins, EBITDA, FCF and other metrics have increased. Making attractive acquisitions such as Tw Telecom.
•    Share price increased 116% vs S&P at 31%.
•    Two long-term shareholders: Southeastern (17%) and Temasek (17%).
•    Significant enterprise revenue growth in conjunction with operating/financial leverage will lead to dramatic FCF growth.
•    Mid to single rev growth will lead to 60% EBITDA contribution margins.
•    Maintenance CapEx is ~12% of revenues. NOLs offset cash taxes until 2021.
•    FCF should triple from $2 per share to $6 over the next 5 years.
•    DCF leads to a $61 per share value or $21.5B of value. Excludes the value of non-earning assets such as dark fiber and 10 empty conduits. These are extremely valuable as well. Dark fiber worth “billions”.
•    Historical Gross PP&E w/ Tw Telecom worth over $45B.
•    Timing? Now as they think growing shortage of broadband capacity and upside from non-earning assets should lead to FCF growth.
•    Benefit from shift to cloud.
•    Routes the most valuable commodity: information.


Be sure to check out the rest of the hedge fund presentations from Invest For Kids Chicago here.

Nehal Chopra Long Actavis & Charter Communications: Invest For Kids Chicago

We're posting up notes from Invest For Kids Chicago 2014.  Next up is Nehal Chopra of Tiger Ratan Capital.  She pitched two ideas: Actavis (ACT) and Charter Communications (CHTR).


Nehal Chopra's Invest For Kids Chicago Presentation

•    Started in FY09. Worked at Balyasny beforehand. Was seeded by Julian Robertson/Tiger.
•    Best ideas follow similar pattern: great management teams, high quality businesses. The power of compounding. Secret sauce is operational improvement and capital deployment.

Idea: Actavis (ACT)

•    Owned Forest Labs beforehand.
•    Brent Saunders joined from Forest Labs. Previous CEO of Bausch and Lomb. Brent Saunders turned it around and sold it.
•    At Forest over six months Brent executed a cost cutting program ($500MM), accretive transactions and then sold it for a 25% premium to Actavis. Made 100% return for shareholders. Now runs Actavis.
•    Rolled all of his stock ($100MM) into Actavis.
•    Chairman of Actavis (former CEO) not a slouch as well. 7.3x return.
•    Actavis is a diversified pharma company. Scale of large pharma with cost culture of a generics co. No looming patent cliff.
•    New breed of specialty pharma. Strong platform and distribution. Strong balance sheet strength and FCF generation. Benefits from a low tax rate.
•    Thesis is simple – strongly positioned across all markets which should drive substantial revenue growth. Cost cutting opportunities and debt to EBITDA at 3.5x allows for optionality. Lots of opportunities to deploy FCF into M&A and buybacks.
•    Everytime they buy a product, can drop it into the sales force bag, leads to higher margins.
•    $20+ earnings in FY16/FY17. Number could be closer to 22 to 23. 15x multiple leads to $350 plus target.
•    Actavis rumored to be in the running for Allergan or sold to Pfizer.


Idea: Charter Communications (CHTR)

•    Owned by Paul Allen, balance sheet/ op issues declared bankruptcy. Emerged in 09. Tom Rutledge joined as CEO. Excellent operator.
•    What is Charter today? Two man band, Operator: Tom Rutledge and savvy deal making of John Malone.
•    Malone owns 25.5% through Liberty Media (Liberty Broadband).
•    Rutledge has led CHTR to increase rev per customer, digital penetration, Video ARPU and Products per User. Poured lots of cash into maintenance capex to upgrade/fix network which wasn’t maintained in bankruptcy.
•    April entered into a series of transactions with Comcast. Bought former TWC assets including 1.5MM subs for $7.7B, swapping 1.7MM subs with Comcast, and will also managed Greatland (33% stake) with 2.5MM subs. Receives a mgmt fee for Greatland.
•    Charter is going from 4MM subs to 8MM subs. Many which were undermanaged, allowing Tom Rutledge to manage.
•    Bull case is operational improvements, cash flow generation and capital deployment (buyback/M&A). Levered equity returns and favorable tax position.
•    EBITDA going from $3.5MM in EBITDFA/ $8 - $9MM in FCF and 4.4x net debt, to $5.5B in EBITDA, $18 - $22 in FCF per share, net debt at 4.5x and trades at an implied 7x FCF.
•    Risks are leverage, Google fiber, timing uncertain.


Be sure to check out the rest of the hedge fund presentations from Invest For Kids Chicago here.

Jonathan Kolatch Long Puerto Rico Power Authority: Invest For Kids Chicago

We're posting up notes from Invest For Kids Chicago 2014.  Next up is Jonathan Kolatch of Redwood Capital who likes Puerto Rico Power Authority ("PREPA").


Jonathan Kolatch's Invest For Kids Chicago Presentation

•    Manages $7B, focus on stress/distress and high yield credit.

Idea: Puerto Rico Power Authority (“PREPA”)

•    Overview of Puerto Rico – a territory of the United States, GDP of $70B.
•    Has problems – recession since 2006. Slow demographic decline. Piling up debt over years.
•    $71B of debt in Puerto Rico. 2/3 is related to central government (general obligation), 1/3 public corporations such as water company, highway authority, etc.
•    PREPA is the Power Authority. Largest municipal electric utility in the USA. Only electric utility in Puerto Rico. 18% of their revenue is not collected. i.e. people stealing electricity.
•    Doesn’t look particularly different vis-à-vis other utilities. 8.8 cents per kilowatt, in the middle of the pack. At a 4.6% ROA, not far out of line. Reasonable well run utility.
 •    PREPA bonds went from above par in FY12 to around ~50, huge divergence and lower than GO bonds.
•    Why does the market hate PREPA? All of their electricity is generated from oil.
•    Politicians target PREPA. Rates at 27 cents per kilowatt hour, pretty high versus the 11 cent avg. Yet it isn’t expensive relative to other islands that use oil.
•    Puerto Rico passed a law allowing entities like PREPA to undergo bankruptcy.
•    Running negative cash flow for many years. Losses plugged by transfers from the state or debt offerings. People bought bonds off the credit quality of Puerto Rico.
•    PRASA and Highway/Transport also burning cash.
•    In regards to the water utility – implemented a 60% rate increase. $400MM increase in revenues. •    Highway – increased gas tax increase from $3 per barrel to $15.3 per barrel or $350MM of increased revenue.
•    Generates currently $750MM in EBITDA, need to raise EBITDA to $1,075MM or a 7% rate increase.
•    1989 was the last time they did a rate increase. No other utility has gone that long without a rate increase.
•    Debt covenants say rates need to be set to keep 1.2x of EBITDA to debt coverage. Contribution in lieu of taxes and capex is subordinated to P&I for PREPA bonds.
•    Thinks an Article I contracts clause will be used/broken.
•    A lot of problems are subsidies to entities like hotels and theft of power.
•    PREPA has four levers to cut cost. (1) convert to natural gas which is a 3 to 7 cent per kilowatt saving; (2) restructure the CILT which has a 0.3 to 1 cent per kilowatt savings; (3) reduce energy theft which is a 1.5 to 2 cent per kilowatt savings and (4) realign the labor force which is a 0.2 to 0.5 cents per kilowatt savings potential. Every 1 cent per kilowatt is worth ~$175MM of EBITDA.
•    Thinks there are gross savings of 4 to 7 cents. Only need half to stay solvent.
•    Recent oil sell-off should lower costs by 2.9 cents per KWh. Only need 1.8 cents per KWh to keep the entity solvent.
•    Timeline – forbearance agreement, next coupon in January and there is a reserve program to pay it. Hard deadline in July 15 when coupon payment is due.
•    Mistreating PREPAs bondholders will severely compromise creditors willingness to believe Puerto Rico’s other promises to creditors.
•    50 cents on the dollar does not leave much downside.


Be sure to check out the rest of the hedge fund presentations from Invest For Kids Chicago here.

Tim Hurd Long Blackrock: Invest For Kids Chicago

We're posting up notes from Invest For Kids Chicago 2014.  Next up is the emerging manager panel featuring Tim Hurd of Blue Spruce Capital who pitched long Blackrock (BLK).


Tim Hurd's Invest For Kids Chicago Presentation


Idea: BlackRock (BLK)

•    They pursue a private equity approach to public markets.
•    Background is Madison Dearborn. Concentrated fashion, no more than 15 stocks with 3 year or more holding period.
•    Grinder – a company with high FCF that can do well over time.
•    Thesis – highly diversified company across clients, product, style and regions.
•    BlackRock wins regardless of what happens in the capital markets.
•    Mostly passive.
•    iShares franchise is the gem. Grown 20% - 30% range, thinks it can grow 11% or more. ETF business is an oligopoly. Return/scale business hard to break into.
•    BLK’s ETF franchise includes equity and fixed income ETFs.
•    Retail AUM growing.
•    Fee growth leads AUM growth. iShares and retail generate margin accretive growth.
•    FCF share has historically exceeded net income (excluding changes in trading investments).
•    Myths about BlackRock : too big to grow, ETF are low fee/low margin business, great rotation fears.
•    PIMCO is the gift that keeps on giving to BLK and other competitors. Pimco Total Return lost another $25B +, BLK and others benefiting.
•    ETFs gain incremental margins of 80% - 90%.  Some ETF products like HY carry 50 bps fee.


Be sure to check out the rest of the hedge fund presentations from Invest For Kids Chicago here.

Nancy Prial Long iCAD: Invest For Kids Chicago

We're posting up notes from Invest For Kids Chicago 2014.  Next up is the emerging manager panel featuring Nancy Prial of Essex Investment Management who pitched long iCAD (ICAD).


Nancy Prial's Invest For Kids Chicago Presentation

Small and Micro-cap growth investor.

Idea: iCAD (ICAD)

•    Down 50% since FY04. Believes there are catalysts in place to return to growth.
•    Innovative cancer detection and radiation therapy solutions.
•    Disruptive platform technology to enable early detection, faster treatment and better outcomes.
•    Catalysts for growth: shift from 2D to 3D for mammography.
•    Radiation business growing 50% + over the next few years.
•    Potential market opportunity of $1B. Favorable results from Hologics and GE. Got into the business through an acquisition.
•    Opportunities to expand outside of the USA.
•    Penetration of technology is 1% - 2%. Thinks they can grow from $30MM a year in business to 25% penetration, which equals a bllion dollar + opportunity
•    Operating income turned positive.
•    Trades for less than 3x revenue, below peers with high gross margin products selling into large under-penetrated markets.
•    beat 8 out of the last 8 quarters for revenue and 5 out of the last 8 EPS estimates. Note only one analyst covering the name on the sell-side.
•     $170MM market cap, thinks the SOTP value is $16. Trades for $11.


Be sure to check out the rest of the hedge fund presentations from Invest For Kids Chicago here.

Mike Wilkins on Short Selling: Invest For Kids Chicago

We're posting up notes from Invest For Kids Chicago 2014.  Next up is Mike Wilkins of Kingsford Capital who talked about short selling.


Mike Wilkins' Invest For Kids Chicago Presentation

•    Short focused firm with $250MM in AUM
•    Focused on small and micro-cap US listed equities, Founded in FY01.
•    Topic is “benefitting from persistent fraud”
•    Fraud is persistent because fraudsters are persistent. Fraud is a people business.
•    Find a stock promotion and build a network form there.
•    To find a promotion, look for a tell.
 •    Step 1: Look for a tell. Look for money losing companies in south Florida/Nevada. Sometimes the CEO looks like a crook!
•    David Brooks – DHB Industries – sold defective body armor to the army. Ended up going to prison.
•    Sometimes the tell is in the SEC filings. The OCZ filings had suspect filings. IPO is a lawyer document. CEO was convicted in a felony (wrote as youthful discretions in the IPO prospectus).
•    Focus on the investor relation firms, transfer agents, lawyers, accountants, etc. Some of them similar.
•    Interoil (IOC): No production but has over a $2B market cap – look at the networks once again (not a short selling recommendation but a potential stock promotion he saw).
•    Look for the stock promoters.
•    Persistent fraud lets them create a history of the company. Sell-side or money managers never really look into the history of managers and companies.
•    Star Scientific is one short than played out. Formed in 98. Burned through $290MM in multiple offerings. Promoted multiple times over the years. Jonnie Williams was one of the people involved. Became chief ethics officer and on the board.
•    Pumped one of their products that was a chemical found in cigarettes that could supposedly cure inflation, a driver of Alzheimer’s.
•    Patrick Cox was one of the promoters. Called it the last stock you ever need, could cure Alzheimer’s. And makes a great face cream.
•    Came into light that Jonnie Williams gave $11MM in bribes to the former VA governor. Was investigated and Williams worked with authorities gaining a blanket immunity from stock pump and dumps.
•    John Stewart couldn’t believe that Jonnie Williams got away with it.
•    John Isner was sponsored by the company
•    John Isner was also sponsored by Ebix another potential promote.
•    Paid promoters: Red Chip, Dave Gentry – involved with L&L Energy. Talks about many of the Chinese frauds. L&L claimed to have coal mines, but did not.
•    Dave Gentry went on CNBC to talk about the company. In FY13, went back up to 5 after new promoters where hired.
•    This March LLEN was charged with fraud and the CEO plead guilty.
•    Tobin Smith was a former Fox contributor on business. Fox fired him for a pump and dump scam. Must be bad if Fox fires you.
•    The DreamTeam Group is another stock promoter group that pays writers to write positive investments. Galena Biopharma was one company that was pumped by the DreamTeam.
•    Lightdingo is one promote.
•    GALT is one idea. Who is GALT?
•    Galectin Therapeutics – went from $2 to $19 since FY13. Zero revenue and more board members than employees. Working for a cure for liver disease.
•    History goes back to another name and founded in FY98. Sold an orange derived product and a home cleaning product. No miracle ingredients – used the same chemicals of that everyone else had, just used more water. Pumped as a safe cleaner, while all it had was watered down chemicals.
•    Then went to pitch a cancer cure. Didn’t work. Brought in new money and directors in FY09. Brought in John Mauldin to the board.
•    Added Dave Gentry, John Fugler, Tobin Smith, and other promoters.
•    Liver drug flopped – was safe (just pectin) but didn’t work (not a surprise). 


Be sure to check out the rest of the hedge fund presentations from Invest For Kids Chicago here.

InvestPitch 2014: Summary of Stock Picks From Emerging Hedge Fund Managers

While most investment conferences feature big names that manage large sums of money, the recent InvestPitch competition put on by Institutional Investor and SumZero highlighted up and coming smaller hedge fund managers.  Videos of the pitches will be available at II in a few weeks, but in the mean time here's a quick summary:


Summary of InvestPitch 2014 Stock Picks

Sahm Adrangi (Kerrisdale Capital): long Savills (LSE:SVS)

Kyle Mowery (GrizzlyRock Capital): long Leucadia National (LUK)

Daniel Lawrence (Elmrox Investment Group): long Realogy (RLGY)

Spencer Grimes (Twinleaf Management): long E.W. Scripps (SSP)

Travis Cocke (Voss Capital): Short GW Pharmaceuticals (GWPH)

Ian Clark (Dichotomy Capital): Short Transocean (RIG)

Michael Zapata (Sententia Capital): Long Aaron's (AAN)

Keith Rosenbloom (Cruiser Caiptal): long Ferro (FOE)

Brian Pitkin (URI Capital): long JPMorgan Chase TARP Warrants (JPM/WS)

Sam Hendel (Levin Capital): long Newcastle Investment (NCT)

Nicholas Snyder (Snyder Brown Capital): long Sears Holdings (SHLD)

David Hanson (Hanson Wells Partners): long Alleghany (Y)

Josh Young (Young Capital): long Stone Energy (SGY)

Donald Marchiony (Westpark Capital): long Tower Semi (TSEM)

Vad Yazvinski (Jordan Capital): long American Capital (ACAS)

(ValueTree Investments): long Kohl's (KSS)

Terry Lally (Spotlight Funds): long Staples (SPLS)

Mike Winston (Sutton View Capital): long Starz (STRZA)

Charles Goldblum (Hurley Capital): long Lifepoint Hospitals (LPNT)


There have been a ton of investment conferences lately and if you missed any of them, we've got you covered with notes below:

- Notes from Sohn San Francisco (Ubben, McGuire, Billick etc)

- Notes from Capitalize for Kids Sohn Canada (Ainslie, Dinan, Robbins)

- Robin Hood Investors' Conference: Summary of stock picks (Tepper, Loeb, Einhorn, etc)

- Great Investors' Best Ideas Dallas (Ackman, Einhorn, Perry & more)

-  Check back for Invest For Kids Chicago notes later this week as well

Tiger Global Reduces MakeMyTrip Stake

Chase Coleman and Feroz Dewan's hedge fund Tiger Global has filed an amended 13G with the SEC regarding their position in MakeMyTrip (MMYT).  Per the filing, Tiger Global now owns 12.2% of the company with over 5 million shares.

This means they've reduced their position size by over 2 million shares since the end of the second quarter.  The filing was required due to activity on October 31st.

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

Per Google Finance, MakeMyTrip is "an online travel company in India. The Company conducts its business principally through its Indian subsidiary, MakeMyTrip (India) Private Limited (MMT India). Through its primary Website, www.makemytrip.com, or MakeMyTrip.com, its subsidiaries’ websites, such as www.hoteltravel.com, www.makemytrip.ae, www.makemytrip.com.sg, and other technology-enhanced distribution channels in India, including its call centers, travel stores and travel agents’ network, travelers can research, plan and book a wide range of travel services and products in India as well as overseas. Its services and products include air tickets, hotels, packages, rail tickets, bus tickets, car hire and ancillary travel requirements, such as facilitating access to travel insurance."

Sequoia Fund Investor Day Transcript 2014

Today we wanted to highlight the transcript from Sequoia Fund's investor day earlier this year.  This is old (6 months ago) but is still worth reading due to the in-depth color they provide on their investments and the fact that they're long-term shareholders so most of the positions still remain in their portfolio.

Positions they talk about include Valeant Pharmaceutical (VRX), Allergan (AGN), Google (GOOGL/GOOG),  Mastercard (MA), TJ Maxx (TJX), Omnicom (OMC), IBM (IBM), Ritchie Brothers (RBA), Fastenal (FAST), Costco (COST), Berkshire Hathaway (BRK.A/B), O'Reilly Auto (ORLY), Rolls Royce (LON:RR), Precision Castparts (PCP), and more.

Embedded below is the Sequoia Fund's Investor Day Transcript: 



You can download a .pdf copy here.

And given their long-term focus, we'd also point you to Sequoia Fund's 2013 investor day transcript as well as Sequoia Fund's 2012 annual letter if you haven't read those either.

What We're Reading ~ Analytical Links 11/5/14

The Misbehavior of Markets: A Fractal View of Financial Turbulence [Benoit Mandelbrot]

What's your investing edge? [Clear Eyes Investing]

Building a personal margin of safety [Abnormal Returns]

Managing someone else's emotions [A Wealth of Common Sense]

On taking losses and the value of survival [Long Short Trader]

A look at Ocwen Financial & Altisource Portfolio Solutions [Doug Kass]

A look at C.H. Robinson [Punch Card Investing]

On Hewlett Packard's break-up [Aswath Damodaran]

First time homebuyers hit lowest in nearly 30 years [CNBC]

On Japan and business vs economics [Paul Krugman]

Underwriting the next housing crisis [NYTimes]

An interview with Google's Larry Page [FT]

How confirmation bias can lead to spinning wheels [NYTimes]

Sears has a deal to offer its shareholders [Bloomberg View]

John Maynard Keynes is the economist the world needs now [BusinessWeek]

The way to make solar energy a hot investment? Make it a boring one [Slate]

Julian Robertson's 3 Most Important Things To Look For in a Stock

Tiger Management's Julian Robertson made his rare yearly media appearance recently on Bloomberg.  There, he talked about what the most important things are that he looks for in a stock:


Julian Robertson's 3 Things To Look For in a Stock

1) Good management:  This was the first thing he mentioned and is something you'll see strongly emphasized at most of the Tiger Cub hedge funds these days.

2)  Good product line:  This one is kind of obvious as you need to sell a product/service that people/companies need or desire.

3) Shareholder oriented:  This kind of ties back-in with #1, but he wants a company that's very stockholder friendly (presumably returning capital to shareholders, etc).


Robertson On Current Markets

Robertson also touched on some other topics during the interview.  Interestingly, he said sometimes it's good to move away from stocks and to look at currencies, saying they're "very interesting" to analyze and that there's a lot of volatility in them.  He also noted it's a "race to cheapen currencies everywhere."  

He also said there's a big bubble with bond yields being so low, causing people who would otherwise be in bonds to be in stocks.

Turning back to stocks, the Tiger man called Apple "awful cheap" and also made similar comments about Google (GOOGL / GOOG).

Robertson went on to say that Asia is the "golden place for hedge funds to be."  He says there's a ton of competition among hedge funds in the US this day and he said Asia isn't quite as competitive.  

Embedded below are the videos of Robertson's Bloomberg interview:

Video 1
 

Video 2
 

Video 3

Lone Pine Capital Starts New Autodesk Stake

Steve Mandel's hedge fund firm Lone Pine Capital has filed a 13G with the SEC regarding shares of Autodesk (ADSK).  Per the filing, Lone Pine now owns 5.3% of the company with over 11.96 million shares.

This is a newly disclosed position for the hedge fund firm and the filing was required due to activity on October 24th.  We've also posted some additional portfolio activity from Lone Pine here.

Per Google Finance, Autodesk is "a design software and service company, offering business solutions through technology products and services. The Company serves in the 3D design, architecture, engineering and construction; manufacturing; and digital media, consumer and entertainment industries. Autodesk operates in four segments: platform solutions and emerging business (PSEB); architecture, engineering and construction (AEC); manufacturing (MFG), and media and entertainment (M&E). The principal products and services of these segments include flagship products, which include AutoCAD, AutoCAD LT, AutoCAD Civil 3D, AutoCAD Mechanical, AutoCAD Map, AutoCAD Architecture, Maya and 3ds Max; Suites, which includes Autodesk Product Design Suites, Autodesk Building Design Suites, Autodesk Infrastructure Design Suites and AutoCAD Design Suites, and New and Adjacent products, which include Autodesk Creative Finishing products, Autodesk Moldflow products and Autodesk Alias Design products."

Final Chance Family Office Super Summit

MarketFolly was able to secure 7 discounted tickets to the 3-Day Family Office Super Summit in  Miami, FL on November 11th-13th but these are almost sold out now.  There are just a few tickets left which enable you to attend for $797 instead of the regular $1,997 price.  To take advantage of this offer please use promo code "Folly" during checkout: http://WilsonConferences.com/Super

Like all of our events we 100% guarantee that you will love the conference and get far more than your money's worth of value from it or we will refund you instantly upon request.

If you are looking for a reason to head south in November, be sure to grab one of these discounted tickets for the Family Office Super Summit.  Not only will you hear from more than 50 family office speakers on important investing issues and wealth management strategies, but you will also have three days to network with leading family office and investment executives.  Here's a look at some of the family offices and wealth managers who will be presenting during this conference:


Family Office Super Summit Speakers List

• Michael Connor, Consolidated Investment Group 
• Matthew McCarthy, Nottingham & Spirk 
• Jonathan Bergman, TAG Associates 
• Elliot Dornbusch, CV Advisors 
• Al Bhatt, Coral Gables Trust 
• Paul Vogel, Argos Partners 
• Richard Joynt, Bedell Family Office 
• John Jonson, Lyrical Partners 
• Christian Zabbal, Black Coral Capital 
• David Rosen, Pritzker Group 
• David Fisher, Bentley Capital 
• Gary Domoracki, Ten Mountain Capital 
• Jimmy Hickey, RiverRock Capital 
• Candice Beaumont, L Investments 
• Ronald Macleod, Baciu Family Capital 
• Timothy Smith, Petro Lucrum 
• Mauricio Gruener, GFG Capital 
• Mark Renz, Barclay Breland Family Office 
• Cliff Oberlin, Oberlin Wealth Partners 
• Roman Khlupin, W Family Office 
• Declan Ramsaran, Redwood Wealth Canada 
• William Kidd, KIDD & Company 
• Camilo Nino, AKRO Group 
• James Cassel, Cassel Salpeter & Co. 
• Blakely Page, Spouting Rock Capital 
• Ira Perlmuter, T5 Equity Partners  
• Jorge Carstensen, Helvetica 1890 
• Santiago Ulloa, WE Family Office 
• Abe Tatar, The Hysek Group 
• Michael Weinberg, MOW & AYW 
• Stuart Dunn, Holdun Investment Partners 
• Christian Jagodzinski, Desdemona Capital 
• Gregory Spick, UPS Investments 
• Anthony Ritossa, Ritossa Olive Oil & Family Office 
• Richard Stone, Stone Family Office 
• Scott Freund, Family Office Research 
• Henley Smith, Commonwealth Asset Management 
• Paul de Sousa, BMG, Inc. 
• Rodolfo Paiz, The Guayacan Group 
• Christina Dikareva, Single Family Office (Private) 
• Logan Powell, Copper Beech Capital 
• Daniel Shakhani, RDS Capital 
• Sergio Pedro, Private Family Office 
• Greg Curtis, Greycourt & Co. 
• Andrew Mehalko, AM Global Family Investment Office 
• Harris Fried, Fried Family Office 
• Peter Marquardt, The Leo Group 
• Leah Zveglich, Aster Family Advisors 
• Richard C. Wilson, Billionaire Family Office 
• Jesse Shemesh, Kite & Key Realty Group 
• Thomas Handler, Handler Thayer

Conference Details: http://WilsonConferences.com/Super

Where: JW Marriott of Miami in Brickell ($200 discounted rooms available)

When: November 11-13, 2014

Why: Learn from top family office investors, form new family office relationships, and access three days of family office insights covering a range of institutional investing topics.


Last Chance Discount For Market Folly Readers

This is your last chance to take advantage of these super-discounted admission passes of just $797 for all 3 days, so if you want to attend visit the following link and enter the promo code "Folly" on the form: http://WilsonConferences.com/Super or call us if you have questions or trouble registering at (212) 729-5067.

See you in Miami.

Richard C. Wilson
(212) 729-5067
Wilson Conferences
Family Offices Group Association
3300 NW 185th Avenue Suite #108
Portland, Oregon 97229
Team@WilsonConferences.com
http://WilsonConferences.com/Super

Sohn Conference San Francisco 2014 Notes: Ubben, Billick, McGuire & More

The 5th Annual Sohn Conference San Francisco took took place on Wednesday October 29th.  MarketFolly was there to cover the event. Excellence SF is in partnership with the Sohn Conference Foundation and is focused on improving educational opportunities and life outcomes for underserved youth.  Conference proceeds also support the Sohn Conference Foundation.  Donations may still be made at www.excellencesf.org 


Sohn Conference San Francisco 2014 Notes


Jeff Ubben - ValueAct Capital - LONG Agrium (AGU) Thesis:  They have a $750M stake in the company.  Generally sees opportunity in the space.  AGU has continued to invest in the business the past 7 years, thinks this investment will start to show returns.  JANA went after mgmt and lost proxy battle, but this still lead to change in mgmt.  They agreed with Jana.  AGU's retail business is the jewel of the company.  Wholesale business is volatile.  AGU has put $7.6B into capex since 2012.  $1.7B should start to get returned to stockholders starting in 2016 or 2017.  Sees a share price of $120 to $150 a share. 

Key reasons for liking AGU:
1)  New CEO has a more focused game plan;
2)  Strong growth in FCF despite down cycle;
3)  Cheap any way you look at it;
4)  Well positioned in consolidating market. Thinks this is a good investment that offers potential returns of 20% a year for a few years.  


Kurt Billick - Bocage Capital - LONG Lundin Mng (LUNMF) Thesis:  Has a commodity focus.  For a while, China had been the key driver in increased commodity demand.  The lack of investment in infrastructure up to that point, lead to a steep climb in prices, which in turn lead to more capital and investment.  Nickel and Zinc are seeing excess inventories absorbed.  Copper is even more interesting.  Likes mining companies that mine base metals and LUNMF mines Nickel, Zinc and Copper.  


Mick McGuire - Marcato Capital Management - LONG Packaging Corp of America (PKG) Thesis:  Started his presentation out by noting that his pick from last year Sotheby's (BID) is down since he presented, and he likes it even more than he did last year.  With respect to PKG, it has a market cap of roughly $7B and they own roughly 3% of that.  Favorable trend for companies in this space as there has been consolidation leading to pricing power.  There's also an opportunity for part of the business that processes virgin wood pulp to become an MLP.  Sees possible price of $122 or 77% upside compared a price of roughly $70 at the time of the presentation.


Brian Zied - Charter Bridge Capital - LONG CaesarStone (CSTE) Thesis:  Likes to focus on industries driven by evolving consumer landscape.  CSTE's product is engineered quartz surfaces for kitchen countertops, bathrooms, floors and walls.  Quartz is gaining share vs. granite and marble.  Quartz has similar aesthetic, but superior performance.  Better characteristics include: scratch and heat resistant, non-porous, identical slabs, lifetime warranty.  Quartz is less expensive too.  Kitchens have become a larger part of the American home over time and are now a focal point of the home compared to say the 50s or 60s.  Remodels now usually also focus on kitchens first.  Quartz is gaining share relative to granite and marble.  CSTE is the only branded luxury quartz countertop maker.  EBIT margin and ROE are much higher than peers.  Compound sales growth over the last two years has been 45%.  Sees a possible stock price of $97 based on eventual EPS of $6.50 and a PE multiple of 15.  


Carl Kawaja - Capital Research Company - LONG Zulily (ZU) Thesis:  Internet retailer that is largely unpopular right now with large short interest.  IPO in November of 2013.  Most people in the audience at Sohn in SF are men, and men don't get ZU.  ZU vs AMZN, about half of items on ZU are not on AMZN.  Site is customized and successful.  ZU offers merchants better terms on their site.  Potential market is big.  Typical customer spends $150 in first year, but if they stay, they eventually avg $500 a year.  Reminds him of Costco.  Bear arguments include:  slow ship time, shipping charges not sustainable, and kid sales are dropping.  By 2018 he sees a potential market value of $11B compared to a bit over $4B right now.  


Sandy Colen - Apex Capital - LONG Container Store (TCS) Thesis:  Likes big opportunities that can be held for a long time.  TCS is down 60% YTD.  IPO'd at 18 and went to the 40s and is now at 17.  Some see weak traffic.  Keys to success include:  grow store base, branded closet line, controlled spending, improve operating leverage.  Sees potential EPS of $1.40 in 2017 and $8.50 in 2025 compared to analyst consensus of $1.00 for 2017.  


Mick Hellman - HMI Capital - LONG LPL Financial (LPLA) Thesis:  In money management there are two key groups, the manufacturers and the distributors.  LPL is in distribution.  Has over 14,000 advisors with $465B in Assets Under Control.  Stock is down a lot recently, but believes problems are solvable.  90% return on tangible capital.  Tailwinds include: large recurring opportunity, more need for financial advice, mix to fee based, client money tends to stay on platform.  Chokepoints include:  best platform, compliance and practice mgmt, scale play, stickiness of platform, flexible product platform.  Sees opportunity for low 20% annual returns.  


Scott Fearon - Crown Capital Management - LONG Grand Canyon Education (LOPE) Thesis:  Owns 115,000 shares of LOPE.  Focus is companies less than a couple billion in market cap.  Lots of money managers don't understand LOPE.  Of the for profits, LOPE is the only one up since 1/3/2012.  Revenues have also been growing.  There is a large short interest in the stock.  There are 11,000 students in the physical school and another 53,000 online.  Four positives about LOPE include: ground campus, affordable, christian, relevant degrees.  Outside possibility of turning dorms into REIT.  Admission standards are high.  Low default rates on student loans on par or better than traditional nonprofit colleges.  Potential for $12 in EPS in 10 years with a 15 PE implies a price potential of $180.


Meridee Moore - Watershed Asset Management - LONG W.R. Grace (GRA) Thesis:  This was also her stock pick in 2011.  Feels like October 2011 again.  All chemical companies are down, but GRA is different kind of chemical company.  Three main lines: Catalyst Technologies, Materials Technologies, Construction Products.  Focus is on ROIC.  Stock is at $89 now.  Was roughly at $39 when she recommended it in Oct. of 2011.  GRA emerged from Chapter 11 in February of 2014.  Stock could be up 37% a year from now based on peer value of EBITDA.  Risks: global slowdown, high rare earths prices, strong dollar, delaying in construction infrastructure spending, recent declines in oil if sustained could mean low prices for Catalyst Technologies.  


Jose Medeiros - Stonerise Capital Partners - LONG QVC (QVCA) Thesis:  Likes to have concentrated portfolio of 6 to 8 long investments a year.  QVC is value hiding in plain sight.  Digital retail.  High retention rates with spend per customer going up.  Attractive financial model and 8% FCF yield.  Was buried in LINTA before, but now trading.  Not much analyst coverage yet.  Trades at $25 with potential for a price of roughly $42 in 2016. Second Pick: LONG Global Eagle (ENT) Thesis:  In flight entertainment and connectivity is a growing market and ENT is a leader.  Has 150+ airline customers.  Deals with airlines are recurring and have long term contracts of 7 - 10 years.  Air traffic is doubling every 15 years and connectivity is growing even faster.  Penetration and take rates are low now.  Gogo, a competitor, is based on ground to air.  Doesn't work over water and other issues as well as that.  Satellite based better.  Market cap of $800M.  Is down more than 40% in the last 12 months.  Has a strong balance sheet.  Other potential catalysts like Dish sponsorship deal.  


Jeff Osher - Harvest Small Cap Partners - LONG Green Dot (GDOT) Thesis:  They own over $50M of stock.  Sees at least 88% upside over 6 to 12 months as concerns get addressed.  Growth is reaccelerating.  30% of cap is cash.  Has a $1.1B market cap.  TAM is 160M customers (17M unbanked, 51M underbanked, 90M unhappily banked).  Simple financial model, sales come from: sale of cards, transfers / reloads, interchange.  Amex entry into market scared investors, but Amex not doing well with prepaid cards.  Misconceptions include:  concerns about collapsing margins, structural growth issues, loss of WMT will destroy GDOT.  


For more recent conference coverage, head to our notes from Sohn Canada investment conference as well as a summary of the stock picks from the Robin Hood Investors' Conference.

Wally Weitz Interview: Columbia Business School's Graham & Doddsville

Columbia Business School is out with the Fall 2014 edition of their investment newsletter: Graham & Doddsville.  In it, they interview Wally Weitz of Weitz Investment Management, Guy Gottfried of Rational Investment Group, as well as the gentlemen from Development Capital Partners.

Additionally, the newsletter features student pitches on short B&M European Value Retail and long Countrywide Plc.

As always, this is definitely a worthwhile read.

Embedded below is the Fall 2014 issue of Graham & Doddsville:


You can download a .pdf copy here.

For more great stuff from past issues of this newsletter, be sure to check out Lee Ainslie's interview as well.

12 West Capital Discloses RetailMeNot Stake

Joel Ramin's hedge fund firm 12 West Capital has filed a 13G with the SEC regarding shares of RetailMeNot (SALE).  Per the filing, 12 West now owns 5.3% of the company with over 2.87 million shares.

This is a newly disclosed position for the firm and the filing was required due to activity on October 16th.

You can view additional portfolio activity from 12 West Capital here.

Per Google Finance, RetailMeNot "operates digital coupon marketplace, connecting consumers with retailers and brands."

Sachem Head Capital Files 13D on CDK Global

Scott Ferguson's activist hedge fund Sachem Head Capital has filed a 13D with the SEC regarding shares of CDK Global (CDK).  Per the filing, Sachem Head now owns 7.88% of CDK with over 12.64 million shares.  Their position includes over 4.94 notional shares underlying total return swaps.

This is a newly disclosed position and CDK was spun off from Automatic Data Processing just about a month ago.  The filing indicates that the hedge fund plans to engage management.

Prior to founding Sachem Head, Ferguson worked at Bill Ackman's Pershing Square.

Per Google Finance, CDK Global is "a global provider, both integrated technology and digital marketing/advertising solutions to the automotive retail industry. The Company’s solutions automate and integrate critical workflow processes from pre-sale targeted advertising and marketing campaigns to the sale, financing, insurance, parts supply, repair and maintenance of vehicles, with an increasing focus on utilizing big data analytics and predictive intelligence. The Company’s solutions address the entire automotive retailers’ value chain. The Company operates in three segments: Automotive Retail Solutions North America (North American Automotive Retail), Automotive Retail Solutions International (International Automotive Retail), and Digital Marketing Solutions (Digital Marketing)."

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."

Capitalize For Kids Sohn Canada Notes 2014: Ainslie, Dinan, Robbins & More

The inaugural Capitalize For Kids investors conference recently took place.  In partnership with the Sohn Conference Foundation, top investment professionals shared their latest insights in support of child health research and treatment.  Below are links to the speaker's presentations.


Capitalize For Kids Sohn Canada Conference Notes 2014

- Lee Ainslie (Maverick Capital): long Qihoo 360 

- Larry Robbins (Glenview Capital): 4 investment ideas

- Jamie Dinan (York Capital): a bunch of stock picks

- Frank Brosens (Taconic Capital): long Men's Wearhouse

- Jeff Smith (Starboard Value): long Yahoo & MeadWestvaco

- Brian Zied (Charter Bridge Capital): long Outerwall

- Steven Shapiro (GoldenTree): long Co-operative Bank

- Jacob Doft (Highline Capital): long Intercontinental Exchange

- Alex Roepers (Atlantic Investment Management): 3 long ideas

- Sahm Adrangi (Kerrisdale Capital): 2 longs

- Guy Gottfried (Rational Investment Group): long Tree Island Steel & TerraVest

- Jeff Hales (Alignvest Capital): long Corby Spirit & Wine

- Aaron Cowen (Suvretta Capital): long Burger King & Liberty Global

- Jody Lanasa (Serengeti Asset Management): 2 investment ideas

- Shawn Foley (Avenue Capital Group): 2 stock picks

- Michael Thompson (BHR Capital): long Golar LNG

- Evan Vanderveer (Vanshap Capital): long Keck Seng Investments

- Chuck Akre (Akre Capital): 4 case studies

Lee Ainslie Long Qihoo 360 Pitch at 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 Maverick Capital's Lee Ainslie who pitched Qihoo 360 Technology (QIHU) long.


Lee Ainslie's Sohn Canada Presentation

He pitched Long Qihoo 360 Technology, a Chinese internet company.  China has penetration rates about half of the US (47% vs. 81%). It took Qihoo only 4 years to reach 6% of e-commerce penetration, great feat given Alibaba’s presence. This was helped by the growth of online advertising in China, now 36% of all advertising.

Revenue segments are: PC/Tablet Gaming (30%), Navigation page (AOL) 25%, App Store (23%), Search (22%). Believes management team is best in-class. Compared the CEO/Founder to Bezos, in a sense that he is looking to dominant difference domains and not his business acumen.

Insiders own ~22% of the company – a true rarity for Chinese based companies. Firstly, they have not monetized search, with traditional search based ads like Google or Bing. Secondly, both the “app store” and navigation/gaming have grown per user over the last 5 year quite well. Believes they have an opportunity in Search (since Google left), mobile app store (once Google left, the Android apps went away), Security (Government of China is looking for a domestic security company to to provide enterprise security, traditional have used US based companies on occasion. At the moment, they do not charge for their security feature.

China has recently passed a law to try and create a standard of enterprise security, in which it selected 5 different companies with Qihoo being one of them. Believes this change can lead to new business in 2015, could do as much as $60m in 2015 for security (admitted it could be way higher, but not sure). Opportunity is present following the selloff last 4-6 weeks.

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

Jamie Dinan's Stock PIcks at 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 Jamie Dinan of York Capital who shared a myriad of investment ideas.


Jamie Dinan's Sohn Canada Presentation

Started off with some general comments. US growth is still quite healthy (although not considered by many people), Europe on the other hand is still not. With oil prices coming down, it will give a huge amount of money to the US consumer (essentially a $130B tax break for consumers – this of course assumes money is not relocated to other spending). Believes Europe will be a reactionary market to policies and this will create lots of distressed situations in Europe (and there is still plenty today).

Some merger-arb names which have ~90% probability of closing: Time Warner Cable/Comcast Corporation, Albemarle Corporation /Rockwood Holdings, and DIRECTV/AT&T Inc.

Next, pitched LONG Molson Coors Brewing (TAP), believes an event could happen with the recent news of Anheuser looking for a deal with SAB. Molson has a 42% stake in MillersCoors (The JV between Molson and SAB). This possible transaction will force SAB to divest their 58% interest from MillerCoors (STZ/BUD deal, divestment of Groupo Model JV), Molson seems like the only option. The deal will likely get done with debt and take Molson to 5x Net Debt-EBITDA. Believes Molson can realize great about of synergies (~$300M) from the US JV with their current Canadian operations. 

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

Larry Robbins' Presentation at Capitalize For Kids Sohn Canada

We're posting up notes from the Capitalize For Kids Sohn Canada conference that just took place.  Next up is Larry Robbins of Glenview Capital who pitched a few stock ideas.


Larry Robbins' Sohn Canada Presentation

Looks for companies with excess cash on the balance sheet (cost of cash capital is low), debt capacity (companies with tangible assets and good credit history to leverage up), incremental debt capacity (under levered relative to industry and can leverage up without jeopardizing current credit rating) and finally defensive growth which protects the investor if company takes on leverage.

Pitched LONG on Thermo Fisher Scientific (TMO), Danaher Corporation (DHR), Endo International PLC (ENDP), and Actavis (ACT), which all fall under the criteria mentioned above.

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

Frank Brosens Long Men's Wearhouse: Capitalize For Kids Sohn Canada

We're posting up notes from the Capitalize For Kids Sohn Canada conference that just took place.  Next up is Frank Brosens of Taconic Capital who pitched a long of Men's Wearhouse (MW).


Frank Brosens' Sohn Canada Presentation

Runs a multi-strategy firm, with a focus on event driven ideas.

Pitched LONG The Men’s Wearhouse. Mentioned short term oriented traders flooded the stock during the merger battle with Jos. A. Bank Clothiers and has caused significant opportunities. The stock has sold off hard over last 2 weeks and they think it looks interesting again. The company can earn $5.50/share two years out with some catalysts to mention.

New CEO was appointed in 2011, but has just recently started implementing new plans and changes since chairman retired last year. Estimates the synergies of $100m by 2017. Men’s Wearhouse merger has a few unique opportunities; such as tuxedos, slimfit. Mentioned MW does $400M in tux rentals and Jos. A. Bank Clothiers only does $30M in tuxedo rentals.

Incremental margins are very strong, approximately 0.55 EPS accretion for every $50m incremental revenue gain for JOSB in tuxedos. Both JOSB and MW are well below peak margins due to heavy advertising spend. If MW can de-lever to ~2.5x Net Debt/EBITDA. They estimate MW can de-lever to 2.5x by 2018 and adjusting for 1x integration costs, FCF should exceed net income. Base case price target of $63 (~40% upside); upside and downside of +71% and -3%.

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

Alex Roepers' 3 Investment Ideas at 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 Alex Roepers of Atlantic Investment Management who pitched 3 long ideas.


Alex Roepers' Sohn Canada Presentation

Looks to enter positions 7-8x EV/EBIT and close 10-12x EV/EBIT. Usually has a 12-24 month holding period but is a case by case basis. Considers the firm a gentle activist. Usually does not look to make too much noise (took a jab at some more public activist investors). Always has a plan ready once a position is taken and looks to work with management, if not, then work with the Board.

First pitch was LONG Owens-Illinois (OI). They are a glass bottle maker (the standard in most spirits). Price target $45 within 12 months (~71% upside from Friday’s close). Said it was un-economical to ship more than 300 miles which is why there is a need for plants to optimize distribution. The factories have an estimated replacement value of $13B. Believes can earn $3.25/share in 2014, target based on 14x 2015 EPS. The recent sell off has created an opportunity to get back in to the stock (has traded the stock since the firm’s inception in 1992).

Next, pitched LONG Triumph Group (TGI). Has a price target of $100 within 24 months (~62% upside from Thursday close). Should trade about 11x 2016 EPS. Operational improvements, share repurchases and M&A will lead to solid EPS growth.

Lastly, pitched LONG Harman International (HAR). Has a price target of price target $141, (~46% upside from Thursday close). The “infotainment” segment has 24% global market share and penetration is very high in car audio (10 out of 15 leading brands use Harman when). Was puzzled as to why Google or Microsoft hasn’t bought them yet. Lots of cross-over with a consumer focused and respected brand. A multiple year phase of 30% EPS CAGR, should allow return to higher multiple (14-15x) in 2016. Believes it could earn $7 2016 EPS.

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

Sahm Adrangi's 2 Long Ideas at 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 Sahm Adrangi of Kerrisdale Capital who pitched two long ideas.


Sahm Adrangi's Sohn Canada Presentation

Address the crowd regarding his recent GSAT short. Mentioned holding your own conference/presentation is a good way to articulate your point.

Pitched LONG SS&C Technologies Holdings (SSNC). It’s a hedge fund administrator company, considered one of the top 5 companies. Very sticky customer base – similar to the way firms don’t change accountants, funds also avoid changing fund administrators, enormous hassle and data/history is often hard to transfer from one to another. Believes the company should trade at 20x FCF and has grown over 20% Revenue CAGR last 10 year (from organic growth). Posted any average retention rate of 90%, again, highlighting the stickiness of the business.

Next, pitched LONG Cognizant Technology Solutions (CTSH). This is a high performing IT service business which has recently experienced a weak quarter. Operations in India, causing a low cost provide advantage. Enjoys multi-year contracts to ensure a steady revenue stream and has a $3.5B contract over 7 years (health net). Price target of $70 using DCF valuation.

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

Guy Gottfried's Presentation on Tree Island Steel & TerraVest: Capitalize For Kids Sohn Canada

We're posting up notes from the Capitalize For Kids Sohn Canada conference that just took place.  Next up is Guy Gottfried of Rational Investment Group who pitched longs of Tree Island Steel and TeraVest Capital.


Guy Gottfried's Sohn Canada Presentation

Pitched LONG Tree Island Steel. They are the largest steel wire product manufacturer (think nails). Small company and a recent sell off has made it even cheaper. Currently trades at 3.5x normalized FCF (using 2006 EBITDA and adjusting for capex, interest & tax). Believes the company is well run and has considerable insider ownership, however is still cheap and unrecognized by the general market due to being a microcap, illiquid and no conference calls until second quarter this year.  Believes they have been “under earning” for last few years. However, insiders remain confident and have bought 7% of shares in the open market within the last year and higher prices than today.  In 2006, EBITDA was $25m and he believes they can get back to these levels.

Next, he pitched TerraVest Capital. It is a former conglomerate with six divisions. It has divested 4 of the divisions, simplifying their capital structure and using cash for special dividends and share buybacks. Currently trades ~6.5x FCF based on current run rate. This exists because the market is not understanding the recent acquisition of Jerico (only been in financials for 2 quarters). It has dramatic growth potential (especially with lots of dry powder waiting to be allocated). Considerable insider ownership and recent buying. Insiders have bought 8% of openly traded stock since February and at much higher prices than today. 

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

Jeff Smith Long Yahoo & MeadWestvaco at 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 Smith of Starboard Value who talked about various investments including Darden, Yahoo, and MeadWestvaco.


Jeff Smith's Sohn Canada Presentation

Spoke about being in the news with the recent Darden Restaurants (DRI) battle. Mentioned they did not want management to sell Red Lobster, and they did.

Next talked about about Yahoo (YHOO). Many shareholders called him, as they are frustrated with lots of clear unlocked value. With a ~$40 B market cap, Alibaba stake is worth $35B, Yahoo Japan stake worth $7.5B, cash on hand at $7.5B and finally the core business of $5.5B. Full value of $62B, much higher than the current value. Opportunity exists given that they will need to pay taxes to exit Alibaba stake. Management is working hard to find a tax structure that is efficient. Mentioned they are currently in a black-out period and will have more details once this period ends. Price target $63 within 12 months (50% upside).

Next, pitched LONG MeadWestvaco Corp (MWV). which is a consolidated packaging company. They are looking to spin off the Specialty Chemical business and the Real Estate piece, both non-core businesses. Plans to reduce overhead and explore alternatives to unlock value of pension assets

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

Brian Zied Long Outerwall Presentation: Capitalize For Kids Sohn Canada

We're posting up notes from the Capitalize For Kids Sohn Canada conference that just took place.  Next up is Brian Zied of Charter Bridge Capital who pitched long Outerwall (OUTR).


Brian Zied's Sohn Canada Presentation

Runs a L/S Equity Strategy with a focus on consumer. Presented three case studies:  1) The Home Depot: $125B hardware store that built a culture that benefited consumers,  2) Cigarettes: why do people still smoke?  Smoking is a social decision, the experience of smoking a cigarette –gives a break in their day, 3) Netflix: why it didn’t kill cable, consumers just watched more TV (both online and off) –benefited both


Pitched LONG Outerwall (OUTR), a provider of automated retail solutions, known for their Redbox service. It has 44,000 kiosks around the US, which represent 85% of revenues and 20% operating margins. Over the past 5 years, has grown revenues at 18% CAGR, EBITDA at 21% CAGR, yet has 34% short interest outstanding. Currently trades at 4x 2015 EBITDA or about 20% 2015 FCF. Negative market sentiment due to their core business of DVD becoming irrelevant by VoD and Amazon/iTunes. However, Redbox has grown from 25% market share to 34% market share from 2011 to 2014, incredible given negative sentiment.

Stated that consumers use multiple rental services, 16% of all users surveyed indicated they use both Redbox/VoD and 45% of consumers preferred Redbox outright over video on demand or other services. Will likely continue to increase share from DVD by mail and brick and mortar (local convenience stores). This can perhaps lead to pricing power if they are able to continue to expand kiosks and win share. Believes new studio agreements are likely to provide more flexibility with similar economics, adding to the underling characteristics of the business of stable to growing revenues and margins (highlighting that volatility from movie success).

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

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.

Jacob Doft's Presentation on Intercontinental Exchange: Capitalize For Kids Sohn Canada

We're posting up notes from the Capitalize For Kids Sohn Canada conference that just took place.  Next up is Jacob Doft of Highline Capital who pitched long Intercontinental Exchange (ICE).


Jacob Doft's Sohn Canada Presentation

Runs a $2.5B firm with an equity L/S mandate. Started the firm when he was 25 years old and focuses on companies undergoing fundamental/industry change. The firm has 30 employees and was founded in 1995.

Pitched LONG Intercontinental Exchange (ICE), a trading exchange where 40% of revs come from non-transaction recurring revenue, selling services like data and access. With regards to trading, 15% of revenues are from Interest rates futures. All exchanges are leveraged to volumes and this one is no different. Potential catalysts include LIBOR opportunity, OTC clearing opportunity, cost cuts, selective pricing. Hugh upside if volume gets back to normal level – we’ll likely need to see risk-free rate increase. Thinks Jeff Sprecher is a great CEO and ready to lead the business through the upcoming predicted change. Valuation regarding different scenarios; flat volume — 30% upside, up volume - 50% ; using 2016 ICE consensus 15.2x EPS; Recovery assumption case 11.2x.

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

Steven Shapiro Long Co-operative Bank at Capitalize For Kids Sohn Canada

We're posting up notes from the Capitalize For Kids Sohn Canada conference that just took place.  Next up is Steven Shapiro of Goldentree who pitched long Co-operative Bank in London (LON:CPBB)


Steven Shapiro's Sohn Canada Presentation

Pitched LONG Co-operative Bank, trades in London. It’s the 7th largest bank in the UK (on deposits), thinks it can double in 12-24 months. Currently trades at half book value and has completed two rights offerings in the few years (to raise much needed capital).

Some risks include balance sheet correlation with UK real estate market, potential large pension liability outstanding, and payment protection insurance issue. Has recently worked to reduce non-core assets, the bank’s portion of the pension deficit is small. Now comfortable with payment protection issue. Significant franchise value as it is a recognized brand in the UK. Currently trades at the rights offering price and it a well-capitalized bank (Basel 3 compliant). Co-op is currently operating at much lower levels than peers, particular with high liquidity ratio.

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

Evan Vanderveer Long Keck Seng Investments & Fleetwood Corp at Capitalize For Kids Sohn Canada

We're posting up notes from the Capitalize For Kids Sohn Canada conference that just took place.  Next up is Evan Vanderveer of Vanshap Capital who pitched a long of Keck Seng Investments and long Fleetwood Corp.


Evan Vanderveer's Sohn Canada Presentation

Co-runs $45m AUM with a focus on global deep value investing.

Pitched LONG Keck Seng Investments, a real estate company, with property holdings around the world. Currently, a HKD $3B market cap and owns assets such as W hotel in San Francisco (15% cap rate purchase), Owns 7 different residential and 3 commercial buildings in Macau and is in the process of buying the Sofitel Hotel in New York (paying 5% cap rate). It is low levered world class real estate property, trades at ~70% of tangible book, ~10% FCF at these levels. About 30% of estimated NAV using market rates. Even if they decrease the value of the assets by 40%, you get a double from the current stock price.

Some potential catalysts include turning the W Hotel into a REIT, continuing to divest Macau real estate, initiating capital returns to shareholders. The company has very large insider ownership, which makes it quite illiquid. The company has doubled FCF per share last 3 years while continuing to make smart acquisitions.


Next, pitched LONG Fleetwood Corporation, an Australian manufactured accommodation company (Makes RV's and such). Brand names are Camec, Coromal/Windsor and it’s currently trading ~70% of tangible book value and 8x 2015 EPS. Believes it has significant underlying earnings power, and half the current is associated with government backed cash flow stream from Osprey (subsidized housing).

EBIT has come way down for a few reasons, causing Net Debt-EBITDA to creep up to 2-3x. Camec has been hurt by foreign price competition, particularly from China and Asia in general. They have also worked to restructure Coromal/Windsor brands. If the company can reap the benefits of a recovery and some cost cutting, can reach 0.45 EPS in 2015, price target at $4.5. (~65% upside from closing prices).

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

Michael Thompson's Presentation on Golar LNG: Capitalize For Kids Sohn Canada

We're posting up notes from the Capitalize For Kids Sohn Canada conference that just took place.  Next up is Michael Thompson of BHR Capital who pitched Golar LNG (GLNG) as a long.


Michael Thompson's Sohn Canada Presentation

Pitched LONG Golar LNG (GLNG). Has an upstream, midstream and downstream business. Management used to run Seadrill and were real money makers. Thinks the base case for the Legacy Golar business is worth north of $30.

However, MLP (FLNG) is where the real upside potential exists; FLNG #1 $20, FLNG #2 $5, FLNG#3 $0 (to be conservative). Valuation is using current spot day rates, assumes no growth in the legacy business, no benefit from existing MLP, which he admitted is very unlikely to happen.

Overall, believes the business could be worth $90, if all 3 vessels were contracted out. Recently, Golar’s share price has suffered due to the selloff in commodities, allowing for the opportunity.

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

Shawn Foley's 2 Stock Picks at 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 Shawn Foley of Avenue Capital Group who pitched long YRC Worldwide (YRCW) and long Meritor (MTOR).


Shawn Foley's Sohn Canada Presentation

Manages the Avenue Capital US Strategy, distressed debt with US leveraged finance focus with firm wide AUM of $14B.

Pitched LONG YRC Worldwide (YRCW), a asset-light trucking company with recent troubles. Waiting for the story to play out.

Next, pitched LONG Meritor (MTOR) – only a quick overview. 

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

Jody Lanasa's 2 Investment Ideas at 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 Jody Lanasa of Serengeti Asset Management who pitched long Fortress Investment Group (FIG) as well as long Kodak.


Jody Lanasa's Sohn Canada Presentation

$1.6B in assets, utilizes an opportunistic value investing strategy.

Pitched LONG Fortress Investment Group (FIG). A global asset management firm with ~$65B AUM ($5B is permanent capital). Does about $940M in revenue and has grown assets by 11% a year since being public. Currently trades at 6x earnings, a 14% dividend yield, which he believes is sustainable. Without considering the FIG segment (has not maximized incentive fees recently), believes the company it’s worth $10, including, is valued at $12.69.

Next, pitched LONG Kodak. Revenues have suffered recently and they had to file for bankruptcy. During the restructuring, they exited the legacy businesses (the cameras and traditional printers). Today, they have over 7000 patents, with a cumulative cost of $5B to develop. The company has than $1B in debt (< 1x Net Debt-EBITDA) and unfunded pension liability. Believes investors are NOT giving them credit or appreciation for monetizing $10/share in cash of “hidden” assets (property, run-off businesses). In addition, they have a couple fast growing revenue generating business such as creating touch screens 30-50% cheaper than other competitors for tablets, phones, etc. Price target $59 (226% upside) within 12 months.

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

Chuck Akre at 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 Chuck Akre of Akre Capital Management who presented four case studies.


Chuck Akre's Sohn Canada Presentation

He presented four case studies of companies who have a successful capital allocation record and high returns on tangible capital.  Quickly outlined Danaher (DHR), Colfax (CFX), and Berkshire Hathaway (BRK.A), however no specific recommendations were given.  It should be pointed out, however, that CFX has seen quite the drastic sell-off recently and it has been one of Akre's top holdings for some time.

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

Aaron Cowen's Long Burger King & Liberty Global: 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 Aaron Cowen of Suvretta Capital who pitched long Burger King Worldwide (BKW) and long Liberty Global (LBTYA / LBTYK).


Aaron Cowen's Sohn Canada Presentation

Pitched LONG Burger King Worldwide (BKW). Believes the stock has bond like features and can generate $2/share FCF. Mentioned Tim Horton’s deal was a huge “game changer”, especially considering the backers, 3G Capital. Can cut lots of costs within Tim Horton’s and turn it into a more profitability franchiser (similar to early days at BK following 3G deal). Thinks there is a possibility for another deal, a pizza chain perhaps.

Next, pitched LONG Liberty Global (LBTYA / LBTYK). An amazing compounder with legendary management team and board (John Malone). Experiencing topline growth and has the German asset upside. Should trade at a 7.5 yield, resulting in a price target of $60.

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