market folly

We're posting up notes from the 2017 London Value Investor Conference.  Next up is Ben Preston of Orbis who pitched long Samsung SDI (KRX: 006400).


Ben Preston's Presentation at London Value Investor Conference

Long Samsung SDI (KRX: 006400) 

Samsung SDI is one of the few companies globally that can make good quality electric car batteries. The stock is trading at close to book value.

He expects the electric car market to grow quickly. In Norway where they are subsidised, electric vehicles already have 29% market share. Electric vehicles only have 1% market share globally. As technology allows electric vehicles to come down in price to compete with the internal combustion engine expect sales to rise.

Competitors in the market include: Panasonic, LG Chem, Tesla Gigafactory, BYD

Will there be enough batteries to go around? He thinks demand could outstrip supply.

Sum of the parts valuation: net cash and financial investments + chemical business + Samsung Display (which makes screens for smart phones) = $8-14bn  + battery business – if he is right about the growth of electric vehicles it could be worth a lot.

Samsung SDI’s market cap today = $8bn. If they are wrong they don’t lose much and if they are right it could be a big winner.

Ben Preston also pitched Long MercadoLibre (MELI).


Be sure to check out the rest of the presentations from the London Value Investor Conference.