Here's Everything Hedge Funds Pitched at Capitalize for Kids
(Bloomberg) -- PPG Industries Inc., Cigna Corp. and Marriott Vacations Worldwide Corp. are among the companies pitched at the Capitalize for Kids Investors Conference in Toronto. Here are the key takeaways:
BlackRock Inc.’s Mark McKenna recommended Cigna, as he sees an up to 80 percent upside from the purchase of Express Scripts Holding Co. in the 18 months after the deal closes. He added that a few states still need to approve the deal, which is “much easier” to get at this point. McKenna still sees an upside of as much as 40 percent even if the deal doesn’t close.
Trian Fund Management’s Ed Garden pitched PPG Industries, noting that the company needs a change in leadership.
Starboard Value Chief Executive Officer Jeff Smith said on Wednesday that the market is missing Marvell Technology Group Ltd.’s upside. Smith discussed confidence in management and misconceptions about its acquisition of Cavium Inc. last month.
ValueAct Capital Management Chief Executive Officer Jeff Ubben said the fund took a stake in Hawaiian Electric Industries Inc. in a bid to push the company to use more renewable energy.
Waratah Advisors’ Brad Dunkley pitched Canada’s Premium Brands Holdings Corp. as a long idea, calling it the Berkshire Hathaway of the meat business. He sees big opportunities in convenience stores with contracts that have much higher margins than typical customers.
Ardinall Investment’s Maria Jelescu endorsed Tellurian Inc., pointing to potential for shares to gain 25 percent in the next 12 months. She sees increased demand for liquefied natural gas around the world, with India and South America continuing to be significant drivers.
Asturias Capital’s Francis Cueto said to short Belden Inc., which has 40 percent to 50 percent downside to his target of $34 per share. Short interest is 14 percent of the float, according to S3 Partners.
Waypoint Investment’s Ryan Marr sees a 45 percent upside to his price target of C$10 per share for Canada’s Chorus Aviation Inc., adding that investors may misunderstand the company’s relationship with Air Canada. Chorus trades at a substantial discount despite above average returns relative to peers, which Marr expects will allow the airline to take market share from competitors.
FrontFour Capital’s Zachary George recommended Marriott Vacations Worldwide, calling for 100 percent upside from its current level, with shares soaring to $195 by 2020. Analyst estimates may not reflect full potential of the deal with ILG, which will create a global leader in branded vacation ownership.
Under Armour Undervalued
Burgundy Asset’s Andrew Iu said he likes Australia’s QMS Media Ltd., citing an upgrade to higher-margin digital panels. He also pitched Hostelworld Group Plc, which trades in London, as a long investment.
Wellington Management’s Evan Hornbuckle pitched Under Armour Inc., calling it undervalued and noting that 2018 and 2019 estimates appear much too low.
Chilton Investment’s Jennifer Foster recommended Hasbro Inc. as a long investment, which has 48 percent potential upside to her target of $140 per share in the next 12-18 months. She said the game Magic: The Gathering may be worth 30 cents to $1 in incremental earnings per share and sees opportunities for the Power Rangers brand.
Atlantic Investment’s Alex Roepers repeated his call from last month for Owens-Illinois Inc. to sell its European business. He sees potential upside to $42 a share, or 155 percent based on Thursday’s close. He also pitched Huntsman Corp. as a potential takeover target and sees almost 170 percent upside to $55 a share. G4S Security Services was also pitched and seen as an M&A target, especially for a large private equity firm.
JC Clark’s Colin Stewart pitched Canada’s Information Services Corp., calling for upside of as much as 95 percent. He says the company has a “monopoly-like” position in its core land registry business in Saskatchewan. He added that the business could eventually be bought by a private equity firm or an infrastructure company.
Tudor Investment’s Ulrike Hoffmann-Burchardi endorsed MongoDB Inc, which has an upside to $120 a share in the next 12 months with the potential to hit $8 billion in revenue by 2025.
Craig Noble, CIO of Brookfield Asset’s public securities group, pitched Targa Resources Corp.
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