market folly

We're posting up notes from the Sohn Canada Investment Conference 2015 (Capitalize For Kids.)  Next up is Philip Hilal from Clearfield Capital.  He pitched SS&C Technologies (SSNC) as a long.

Philip Hilal's Capitalize For Kids Presentation

-    Special situations such as companies undergoing transformation.  Previously worked at Kingdon and Bill Ackman is reportedly an investor
-    LONG SS&C Technologies (SSNC)
-    Market Cap $7Bn, sees 40% upside
-    Serves the financial services industry with administration for hedge funds among other services
-    Sell side doesn’t follow closely, under appreciates the synergies in the 3 most recent acquisitions
-    They have mission critical software – regulation will drive more business going forward
-    Highly recurring revenue with 90% retention
-    High margins over 40% EBITDA margin and high FCF
-    Bill Stone is CEO, has completed 40 acquisitions and owns 12MM shares
-    Has a history of improving acquired businesses
-    Still small in industry and has room to expand
-    These 3 transformative acquisitions stand to double EBITDA
-    Advent acquisition should be 25% accretive and Citi Fund services should be 18% accretive
-    $5 earnings forecast for 2017 and a 20x multiple applied puts stock at $100, compared to current levels ~$70
-    Catalyst: Nov 4 2015, investor day, may refresh guidance on synergies in acquisitions
-    Risks: Integration (mitigant: long history of integrating businesses), Organic growth decline (mitigant: possible but most likely temporary), and leverage (successful history of deleveraging)


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