market folly

We're posting up notes from the Sohn Canada Investment Conference 2015 (Capitalize For Kids.)  Next up is Daniel Dreyfus from 3G Capital who pitched a long of Reliance Steel & Aluminum (RS).

Daniel Dreyfus' Capitalize For Kids Presentation

-    Finds opportunities where profit margins are low and average valuation is applied
-    Wants something levered to US economy to shield global worries
-    Long Reliance Steel & Aluminum  (RS)
-    FCF yield 9.2% 2014
-    $6Bn EV, $53 stock price
-    Distribution business, levered to US
-    Largest buyer of steel, cut it to fit for client and deliver
-    Basically activity increases and falls with US economy
-    Size is their moat
-    Volume game, low margins
-    1 quarter since 1994 IPO with lost money so it’s a cash machine
-    Serves non-residential construction
-    Sees oil recovery as a free option in stock as it will see huge upside if the oil producers start building again


Be sure to check out the rest of the presentations from the Capitalize For Kids Conference.