market folly

We're posting up notes from the Ira Sohn Conference.  Eagle Capital Partners' Meryl Witmer gave a presentation on going long Viacom (VIA.B) and Gildan (GIL).

She started with Michael Price and is a Barron's Roundtable member.  She seeks out excellent management teams, great capital allocation, FCF machines, strong balance sheets.

Long Viacom (VIAB): Media Networks, Filmed Entertainment. Bear case is NICK ratings collapse, 20-30% per Nielsen, but VIAB says it's not that bad. Bull case is they won't take as big of an eps hit on NICK. Says affiliate fees grow, gets $6.72 per share by 2015, 14x multiple, $94.13 stock price by then, 94% upside from current levels.


Long Gildan (GIL): Gold-toe Sock maker. Co-founder owns 8%, low cost producer, earnings temporarily depressed due to cotton price spike, high cost inventory gone in a quarter or two. Could earn $3.30 to $3.50 per share by 2014/2015. Took share from Fruit of the Loom, Hanes and others. Management allocates capital well, ROIC above 15% As cotton went up from $0.80 to $2.00, GIL absorbed some of the increase instead of passing it all on to customers. Speaker believes this is a "debt of goodwill." Stock to $39.50 in 2013, $51 by 2014.


P.S. - Don't miss other presentations from David Einhorn, John Paulson, Bill Ackman & more: notes from Ira Sohn Conference 2012.