The annual Ira Sohn Investment Conference was held in New York
on Wednesday. At the event, which supports the treatment and cure
of pediatric cancer, many of the world's most successful hedge
fund managers and other noteworthy investors pitch stock ideas to
their colleagues. The investment ideas presented at Ira Sohn
frequently cause large price moves in the individual stocks being
discussed, and the 2012 conference was no exception.
Among the heavy-hitters that presented this year were
Greenlight Capital founder David Einhorn, Pershing Square founder
Bill Ackman and Paulson & Co. chief John Paulson. Below,
Benzinga recounts the stocks they discussed in their
presentations and how those names are faring on Thursday.
David Einhorn
- In today's markets, this boyish looking hedge fund manager may
be the most influential voice when it comes to individual stocks.
Einhorn's short bets on companies such as Lehman Brothers and
Green Mountain Coffee Roasters (NASDAQ:
GMCR
) have brought him great sway on Wall Street. While Einhorn isn't
always right, when he is, it is usually in dramatic fashion.
When the Greenlight Capital manager did not mention Herbalife
(NYSE:
HLF
) as a potential short candidate, that stock skyrocketed on
Wednesday. Herbalife shares finished up 16.66% to $49.51. On
Thursday, however, HLF is retracing some of yesterday's gains and
at last check was trading down 6.00% to $46.53.
Previously, HLF had plunged after Einhorn asked some pointed
question on an earnings conference call. The presence of the
hedge fund manager on the call was enough to spook investors who
had feared that Einhorn may be targeting the company on the short
side.
Other companies that he addressed included Amazon.com (NASDAQ:
AMZN
) whose future he described as a "riddle." While Amazon has been
tremendously successful, its earnings multiple is also
stratospheric for such a large company.
The hedge fund manager made bearish comments on a couple of
other names including Martin Marietta (NYSE:
MLM
) and Dick's Sporting Goods (NYSE:
DKS
). Both of those stocks are continuing to fall on Thursday. At
last check, MLM was down 1.30% to $67.71 after falling yesterday
during Einhorn's speech and DKS had shed another 4.63% to
$45.72.
On the bullish side, Einhorn had only positive things to say
about Apple (NASDAQ:
AAPL
). Of course, this makes sense, seeing as how Greenlight has a
massive $878 million position in the company, which accounts for
around 16% of the fund's long equity portfolio.
John Paulson
- best known for making billions for himself and his investors by
betting against the housing market before the crash, Paulson also
spoke at Ira Sohn. Unlike Einhorn, who loves to talk about shorts
despite the fact that he is a long-oriented value investor,
Paulson talked about his long ideas. He said that he owns shares
of Caesars Entertainment (NASDAQ:
CZR
), which went public in February. According to Paulson, the
company's social gaming platform Lakita is worth $8 per share
alone. On Thursday, CZR shares have added 1.63% in a bad market
tape and were last trading at $13.70. The company came public at
$9.00 per share.
Another long idea that the hedge fund manager spoke about is
long-term Paulson & Co. position AngloGold Ashanti Limited
(NYSE:
AU
). This stock is a bit of a dog, but the billionaire is convinced
that it will eventually be a big money maker. Over the last year,
AU shares are down more than 27% and over the course of the last
five years the stock has lost 24% despite skyrocketing gold
prices.
Paulson told the audience that AngloGold is "firing on all
cylinders" and that current prices make an attractive entry
point. He also added that it is cheaper to get exposure to gold
through AU than through an ETF or futures. Paulson said that he
thinks AU may have as much as 75% upside from current levels. On
Thursday, AU has jumped 3.13% to $32.66 on the back of the hedge
fund manager's considerable sway in the investment community.
The final stock that Paulson talked about was CVR Energy
(NYSE:
CVI
), a company in which his hedge fund recently bought a 9.9%
stake. Paulson thinks that CVR could be worth as much as $36.00
per share. On Thursday, the stock has climbed 0.63% to $30.54.
While that may not seem like much, it is not bad considering that
the broader stock market is getting blasted once again.
Bill Ackman
- The final speaker at Ira Sohn was the always interesting Bill
Ackman. Attendees were likely sitting on the edge of their seats
to hear what Ackman had to say about his largest holding, J.C.
Penney (NYSE:
JCP
). Earlier in the day, the stock had suffered its worst
percentage loss ever on the back of a disastrous quarterly
report.
Although the market was closed by the time Ackman came up to
speak, his hedge fund had lost hundreds of millions of dollars on
its over-sized JCP position on Thursday as the stock finished
down nearly 20%. While the exact amount of Pershing Square's
losses on the position cannot be known, the fund held 38.7
million JCP shares as of its last 13-F filing. Given that JCP
fell $6.57 during Thursday's trading session, the total damage
done could have been in excess of $250 million. Ouch!
In any event, Ackman didn't sound like he was thinking about
unloading his stake at current prices, so maybe he isn't that
worried. Ackman talked about the appointment of former Apple exec
Ron Johnson as CEO of J.C. Penney. He said that he thinks Johnson
thought JCP was the best turnaround story that he could
participate in.
He also praised the CEO's new ideas in transforming the brand
by focusing less on promotional activity and coupons in favor of
more straightforward pricing. Ackman added that JCP is a
well-known brand and is not fundamentally broken. In fact, the
noted investor thinks JCP could earn $6.00 per share by 2015 and
that the stock could trade as high as $77.00 to $125.00.
Ackman's efforts to defend J.C. Penney at Ira Sohn may have
stemmed the losses in the stock in the very near-term. On
Thursday, JCP shares are trading up marginally after rising more
than 4% early in the session.
(c) 2012 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.