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Here’s What Hedge Funds Pitched at the Sohn London Conference

Here’s What Hedge Funds Pitched at the Sohn London Conference

(Bloomberg) -- Hedge fund bears regained a dose of confidence at an annual gathering of industry managers in London on Thursday.

While most of the bets at the Sohn investment conference were long, three were short ideas and one was an arbitrage play. That’s slightly more bearish than last year, when only one speaker braved going short. Those investors that acted on 2018’s stock tips would have been largely rewarded -- eight out of 10 are in the money a year later.

James Hanbury, a portfolio manager at Crispin Odey’s investment firm, closed the conference with the final buy recommendation: trading platform Plus500 Ltd. He cited the “exceptional” offering that allows customers 200 times leverage and limited losses, and its ‘impeccable” cash conversion.

Here are the rest of Thursday’s recommendations, broken down by sector:

Entertainment

SpringOwl Asset Management co-founder Jason Ader pitched Playtech Plc, claiming it’s the most undervalued gaming firm on the planet. He said the stock, which has been on the activist firm’s radar for some time, is a perfect buyout target. The stock had a monster rally between 2011 and 2017, before slumping as much as 65% from its peak.

Lucerne Capital Management founder Pieter Taselaar suggested media and telecoms group Altice Europe NV. Despite the share price’s recent surge, up more than 200% this year, he reckons it’s still cheap and could triple to 15 euros ($16.50). The company is misunderstood by the market, and both the sell-side and buy-side aren’t doing thorough research on it, he says.

Words are still popular, was the reassuring opener from Lucy MacDonald, chief investment officer of global equities at Allianz Global Investors. She’s a fan of Bloomsbury Publishing Plc, publisher of the iconic Harry Potter books which she says are still selling nicely.

Industrial

Among the short ideas presented at the conference, Bodenholm Capital founder Per Johansson picked commercial printing firm Koenig & Bauer AG. Short sellers have piled into the stock and shares are down about 13% this year.

Lombard Odier Asset Management’s Arnaud Langlois also pitched a short: industrial gases firm Air Products & Chemicals Inc., a recommendation he confirmed on the sidelines of the conference.

Trian Fund Management partner Brian Baldwin tipped buying plumbing goods distributor Ferguson Plc, saying the shares are mispriced. The firm has $20 billion in sales but minimal coverage in its specialist U.S. market, he said, predicting the shares could get to 80 pounds ($103) from under 70 pounds now.

Food & Accommodation

CIAM founding partner Catherine Berjal recommended buying European hotel group Accor SA, saying the firm is substantially undervalued. She says a private-equity deal would allow investors to unlock value for a double-digit return, and sees more than 50% upside in a such a takeover.

Makuria Investment Management founder Mans Larsson pitched Swedish food retailer ICA Gruppen AB as a short bet.

Shipping

Tamas Eisenberger, portfolio manager at Sikra Capital, says the shipping industry is coming out of an 11-year bear market. He likes two companies: Star Bulk Carriers Corp., of which 10% is owned by insiders and whose shares trade at a 40% discount to net asset value. The second is Scorpio Tankers Inc., which boasts a young, diversified fleet and good management, he says.

Health

Bodenholm’s Johansson offered a second tip, this time going long medical technology firm LivaNova Plc. The shares are undervalued and the company could be a potential target for acquisition, he says. In a base-case scenario, the shares could rise 40%, but could potentially surge as much as 150%, he said, highlighting the firm’s studies with depression patients.

The Outlier

Amwal Capital Partners Chief Investment Officer Fadi Arbid flagged a “simple but lucrative” idea: a merger arbitrage bet. He recommended shorting Kuwait Finance House KSCP and going long Ahli United Bank BSC. Arbid’s firm is based in Riyadh and focuses on the Middle East and North Africa.

To contact the reporter on this story: Chris Bourke in London at cbourke4@bloomberg.net

To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Melissa Karsh

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