market folly

Below we're posting up notes from the Next Wave Sohn New York Conference 2017.  This is the lead-in event to the main Sohn Conference and features emerging managers pitching their latest investment ideas to benefit cancer research.  We've also posted up notes from the main Sohn Conference here.


Next Wave Sohn New York 2017 Notes


Neal Nathani (Totem Point): Long Xilinx (XLNX)

Sees 70% return in shares.  Secular tailwinds in data center and automotive/industrial markets.  AI and machine learning the next big opportunity in tech.  Strong balance sheet and returns on capital, strategic asset.  Thinks they take share from Altera and grow 11% versus FPGA market growth rate of 7%.  Also notes if the company levers up it could repurchase over $6 billion in stock over the next few years, around 37% of market cap.  70% upside is achieved via 17.5x CY20 EPS of $5.39 plus net cash.



David Copley (Trafalgar Copley): Short JBH and NZD

Said that if China has a credit problem, then Australia and New Zealand definitely have a big problem.  Thinks there's a residential housing supply bubble in Australia



Li Ran (Half Sky Capital):  Long Fever-Tree (FEVR:LN)

Expansion to mass market retail has boosted volume. Attractive due to solid consumer messaging and long runway for growth opportunity.  Prior to founding Half Sky, worked at Lone Pine Capital.



Jack Franke (Blockhouse Capital): Long MPLX (MPLX)

Thinks volume growth will accelerate due to pipeline additions.  Argued stock could return 40% over next two years.  Dividend could grow to $3 per share by 2019 and could close valuation gap to peers.



Dave Thomas (Atalan Capital): Long Gigamon (GIMO)

GIMO has 90% customer retention, dominant player in network visibility software.  Says the total addressable market for GIMO is multiples higher than sell-side estimates.  Thinks it is more of a software company than hardware.  Price target $45 or 4x 2018 sales.



Mark Moore (ThornTree Capital): Long Formula 1 (FWONA)

Sport is growing revenue around 4-5% annually.  The injection of Chase Carey into the team has helped rebuild the company/brand and invest in the fans.


Be sure to also check out the notes from the main Sohn Conference New York 2017.