market folly

We're posting up notes from the Sohn Canada Investment Conference 2015 (Capitalize For Kids.)  Next up is David Lorber from FrontFour Capital who pitched long Ubisoft.

David Lorber's Capitalize For Kids Presentation

-    Value event-driven fund
-    Long – Ubisoft (French listed video game country) 
-    Levered to game development industry (XBOX one and PS4 coming out)
-    Higher margin point of sale, and upgrades add additional margin
-    Shift from physical to digital sales has increased margins
-    Strong North American footprint and have prices pegged to USD
-    3/10 of the top 10 best sellers in 2014
-    Strong pipeline of games to come
-    Valuation is cheaper than EA & Blizzard
-    77% upside to 32 euros/share
-    “For Honour” (new game to come out) looks to be a possible home run with very high quality multi-player play modes
-    Brand extensions will provide additional opportunity through licensing and royalties
-    Secular tailwinds, cheapness of company compared to comps and industry consolidation provide opportunity to get into a great business with lots of upside.


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