Stock Picks From Some Top Money Managers at the Sohn Conference
Sohn Conference Roundup: Stock Picks of Some Top Money Managers
(Bloomberg) -- Here’s a roundup of pitches by the biggest hedge fund managers that presented Monday at the 23rd annual Sohn Investment Conference, one of the industry’s marquee events.
Many of this year’s bets were tech focused as presenters talked about privacy concerns in social media and embracing artificial intelligence. DoubleLine Capital’s Jeffrey Gundlach recommended shorting Facebook Inc. and going long an ETF that tracks oil and gas exploration and production stocks. Hedge fund manager Li Ran of Half Sky Capital touted GrubHub Inc., and Light Street Capital Management’s Glen Kacher discussed cyber-security company Palo Alto Networks Inc.
Larry Robbins, head of Glenview Capital Management, FaceTimed with his mom while on stage and there was even a segment with a Wall Street mentalist -- who led some audience members in an interactive exercise.
Here’s a list of the conference’s biggest takeaways:
Jeffrey Gundlach, DoubleLine Capital
Gundlach, best known for managing bond funds, recommended going long the SPDR S&P Oil & Gas Exploration & Production ETF and shorting Facebook. Bearish bets against Facebook have increased since a data-privacy scandal engulfed the social-media giant in March.
Gundlach has been touting commodities as one of his favorite investments this year, because they historically rally late in economic cycles. He recommended against using leverage for the paired trade.
Li Ran, Half Sky Capital
The founder and chief investment officer of this hedge fund was bullish on GrubHub. The digital food-delivery company has reached less than 5 percent of the U.S. population, so there’s significant room for growth, she said. Her firm surveyed restaurant managers and found that GrubHub orders were expected to accelerate in every city.
Shares of the company have risen 42 percent this year.
Glen Kacher, Light Street Capital Management
Palo Alto Networks’s growing cloud security portfolio means the stock may have a potential upside of 164 percent, said Kacher, founder and chief investment officer of Light Street.
“A key part of the story here is a shift to subscription services,” he said, noting that subscriptions are rising. He sees total subscription revenue growth quadrupling over the next four years.
Chamath Palihapitiya, Social Capital
Box Inc. shares surged the most in more than three years after the venture capitalist said investors interested in tapping into artificial intelligence plays should “go long” in the stock.
Box, a Redwood City, California-based company that helps businesses manage content in the cloud, jumped as much as 16 percent Monday. Last October, Box unveiled AI skills that let its file-storage customers use image recognition and text, audio and video-searching tools from companies like Google, Microsoft and IBM.
David Einhorn, Greenlight Capital
Shares of Assured Guaranty Ltd. sank after Einhorn recommended shorting the bond insurer. He said the company’s exposure to Puerto Rico’s debt may be just the tip of the iceberg for the stock. The idea he pitched is an existing position in his portfolio, he said.
Assured Guaranty said in a statement that "we strongly disagree" with Einhorn’s assertions and that he displays a "fundamental lack of understanding" of its business model and the municipal debt markets. Assured Guaranty is "well reserved for its municipal exposures" and doesn’t face liquidity risks, according to the statement.
Larry Robbins, Glenview Capital Management
The hedge fund manager, who has long invested in health care, reiterated past calls in favor of McKesson Corp., CVS Health Corp. and Express Scripts Holding Co. He rebuffed fears that Amazon.com Inc. will enter the pharmacy-benefits industry, saying competition from the online retailer is unlikely to materialize.
Amazon steers away from highly regulated businesses that have too high risk for their reward, said Robbins. Likewise, Amazon wouldn’t want to be involved in pharmaceuticals, he said.
John Khoury, Long Pond Capital
Khoury said he believes there’s 63 percent upside to the stock of homebuilder D.R. Horton Inc.
“DHI is a high quality builder, which is well positioned both geographically and by price point,” he said.
D.R. Horton is transforming into a pure-play manufacturer of homes, Khoury said. This transformation will result in higher returns, greater free cash flow, faster earnings growth, greater downside protection and a higher trading multiple, he said.
To see how some of last year’s picks fared, see here.
--With assistance from Martin Z. Braun John Gittelsohn and Joshua Fineman
To contact the reporters on this story: Katia Porzecanski in New York at kporzecansk1@bloomberg.net, Hema Parmar in New York at hparmar6@bloomberg.net, Kristy Westgard in New York at kwestgard1@bloomberg.net.
To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Alan Mirabella
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