market folly

We're posting up notes from the Sohn New York Investment Conference.  Next up is Scott Goodwin of Diameter Capital Partners who presented a short of PlastiPak unsecured bonds and a long of Constellium equity.


Scott Goodwin's Sohn New York Presentation

•    Credit investor - Secular shift in plastic packaging. 50 year bull run in the use of plastic packaging.
•    Many single use plastics being banned. Creating huge problems in oceans and landfills. Not easy to recycle. Thinks use of plastic will decline and will be a secular decline. Cliff is coming
•    Short PlastiPak unsecured bonds. 4% EBIT margins. Peer group has 10% to 12% margins. Bond trades at 95 cents. Heavily levered. Likely to be worth close to zero in bankruptcy
•    Long Constellium equity (aluminum). Much easier to recycle aluminum and higher recycling rates


Be sure to check out the rest of the Sohn New York conference presentations.