The Ira Sohn conference took place yesterday at Lincoln Center where every year the “who’s who” of the hedge fund elite present their best stock ideas to raise money for pediatric cancer. In recent years, the Ira Sohn conference has become something of a announcement platform for managers to disclose large activist or short positions.
What follows are some highlights from this year’s conference:
Kyle Bass – Haymann Capital - Dex One Corp. (DEXO) & SuperMedia (SPMD) are two yellow pages companies which went bankrupt. The two have simultaneously come out of bankruptcy and merged to form Dex Media (DXM). An excellent writeup can be found here. Bass is saying Dex One could could be a solid turnaround play over the next three years. “It’s a big event driven idea in our portfolio,” he says. Bass owns about 5 million shares making him the largest hedge fund holder of this name. But Paulson & Co. has had a similar sized position (along with some other notable investors) for quarters:
Keith Meister – Corvex: Meister founded Corvex a few years ago after working for Cark Ichan. He’s a value-investor who typically looks for positive catalysts to unlock value in good companies. He mentioned in this year’s conference that he likes infrastructure assets (pipelines, cell towers, etc) and that the growth of mobile data is “up and to the right”. He also said that “Carl taught me to keep things simple”
His two ideas are TW Telecom (TWTC) and Level 3 (LVLT). He said he’ll soon disclose (via 13D) a 6% position in TWTC and he thinks the company will be bought and that the current business is massively undervalued.
He also owns 3% of Level 3 which he calls “a real estate play”. ”Level 3 reminds me of Sprint,” he says. “When people start believing in the story, we think there’s asymmetry to the risk/return and the downside risk has largely been removed.”
Interestingly, both of these positions are very small within his existing portfolio (unlike most of the other ideas shared by managers). A look at the top 10 holdings (by conviction) is shown below – most of which are common among other hedge funds. The full portfolio report can be found here:
Bill Ackman – Pershing Sq.: Ackman didn’t make one mention of Herbalife (which many were expecting – possibly because participants were limited to 15min each). But he did go into depth on JC Penny (JCP) which hasn’t been a friend to him lately. Pershing Sq.’s full portfolio report can be found here.
Mitchel Julis – Canyon Capital: Julis showed the Noah’s Ark cartoon to the crowd which went over big. His idea this year is Clear Channel Outdoor (CCO). He doesn’t say much other than it’s trading at a depressed multiple. Interestingly, it’s been in his portfolio for years:
Full Canyon Capital Report available here
The top institutional filers are below:
Steven Eisman - Emrys Partners: Eisman is bullish on US real estate but thinks Canadian real estate (and as a result the banks) are in trouble. He thinks the US homebuilders are cheap and specifically calls out Ocwen Financial (OCN) as being especially undervalued.
”Ocwen is the single most powerful play on US housing and the most misunderstood.”
The top institutional holders are: