Hedge Funds Prep Sohn Picks. Here's How Their 2017 Ideas Did
Hedge Funds Prep Sohn Picks. Here's How Their 2017 Ideas Did
(Bloomberg) -- The Sohn Investment Conference opens Monday to a wave of hedge fund industry titans sharing what they hope are money-making ideas.
For 23 years, fund bigwigs have taken to the New York stage to reveal to peers their highest-conviction trades, just as they will do again today. But after last year’s crowds dispersed and the spotlight faded, did those wagers, in fact, win?
Here is a look at how some of the most prominent picks from the 2017 conference fared.
To follow our by-the-minute coverage of today’s event, head to our Top Live blog here starting at noon Eastern time.
David Einhorn, Greenlight Capital
His call: Short oilfield-service company Core Laboratories NV. Low oil prices were crimping its business opportunities outside the U.S. and hurting revenue. The stock, which closed on May 8 at $110.75, was really worth $62.30 with the company poised to miss earning estimates for the next several years, Einhorn said at last year’s conference.
What happened: Uh oh. Core Laboratories shares ended up returning 11 percent since the event, including dividends. They closed at $121.50 on April 20 in New York. The company’s earnings beat or matched Wall Street estimates over the rest of 2017, though management guided down forecasts for this year’s first quarter.
Jeffrey Gundlach, DoubleLine Capital
His call: A pair trade going long the iShares MSCI Emerging Markets exchange-traded fund and short the SPDR S&P 500 ETF with one turn of leverage. The widespread thinking that rising interest rates would surely lead to a stronger dollar was a myth, he said, adding that the S&P 500 Index was underperforming emerging markets. His call was a relative-value play -- not a forecast that the S&P 500 would fall -- he later told CNBC.
What happened: The MSCI ETF returned 20 percent, including reinvested dividends, and the SPDR ETF rose 13 percent. Gundlach’s trade would have produced a gain of 13 percent through April 20, not including costs.
Larry Robbins, Glenview Capital Management
His call: Buy post-merger companies DXC Technology Co., FMC Corp. and Quintiles IMS Holdings Inc. Their growth potential was being overlooked by the market, as they had been “left for dead” in a regulatory environment that hampered merger activity, Robbins said. DXC’s share price could double, from about $78, in the coming years, he added.
What happened: Looks like a win-win-win, with all three stocks up double digits. DXC rallied 33 percent, with dividends, to about $103.51. FMC gained 14 percent and Quintiles, renamed Iqvia Holdings Inc., returned 16 percent.
Bill Ackman, Pershing Square Capital Management
His call: The billionaire reiterated his bullish view on real estate group Howard Hughes Corp. -- one of his longest-held positions. Stock of the company, of which Pershing Square is one of the largest shareholders, traded at a big discount to the underlying net asset value, he said. “This is one of the most attractive times in the history of the company to invest.”
What happened: The stock has risen about 8 percent.
That’s at least one bright spot for Ackman, who isn’t presenting at this year’s conference and has seen investors yank cash as his fund failed to perform.
--With assistance from John Gittelsohn and Alan Mirabella
To contact the reporter on this story: Hema Parmar in New York at hparmar6@bloomberg.net.
To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Josh Friedman, Dan Reichl
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