This is the time of year when investment managers release their quarterly holdings, and yesterday was also the annual gathering of the Ira Sohn investment conference in New York City. Over the past couple of years, this conference has become a spawning ground for some of the most closely watched ideas.
This year was no different. Once again, one of most highly anticipated presentations was by David Einhorn, regarding his latest target. Many analysts suspected it would be the health care marketing company Herbalife (HLF), since Einhorn expressed some concerns on the company's latest conference call. But it turns out that Einhorn's latest target was the concrete and cement company Martin Marietta (MLM).
Since Einhorn omitted Herbalife from his presentation yesterday, that sent Herbalife shares up 17%, while Martin Marietta immediately dropped nearly 10%.
Einhorn labeled Martin Marietta as a company that has a lot of problems and took the company's CEO to task, accusing him of considering his own interests before those of shareholders with respect to his desire in acquiring rival Vulcan Materials (VMC).
Einhorn's short picks have garnered him a loyal following. After a well-timed short call on Lehman Brothers a few years ago, he recently shorted Green Mountain Coffee Roasters (GMCR), questioning the company's accounting policies and how it books revenue. Since Einhorn made the call, shares have declined by over 60%.
John Paulson made his bullish case for Caesars Entertainment (CZR), arguing that after a long economic slump, the hotel and gaming industry is finally on the mend. Caesars shares are trading for $13.60, and the company currently generates no free cash flow or profit. The market cap of $1.7 billion is dwarfed by the enterprise value of $20 billion.
Another brilliant investor, Steve Mandel of Lone Pine Capital, made a bullish case for retailer Kohl's (KSS). He suggested that those who feel that the company is "yesterday's news" in today's retail world are only serving value-seeking investors. Shares in Kohl's trade for 11x earnings and yield 2.7%.
Speaking of retailers, activist Bill Ackman defended his bullish stance on JCPenney (JCP). Earlier this week, JCPenney surprised analysts with very disappointing results along with somewhat of an admission from new CEO Ron Johnson that turning the company around is going to be a difficult task. But both Johnson and Ackman feel confident in JCPenney's long-term value. Shares are now trading for $27, down 30% over the past year. Investors can now get in at similar prices to Ackman's if they believe in the story.
Interestingly enough, I didn't come across any financial stock ideas at the Ira Sohn. Last year, a pitch was made for Goldman Sachs (GS) which is down about 30% since then. If the thesis is still the same, maybe Goldman and the other financials are even more compelling today. For those investors who want to do a little more digging, other names with bullish pitches included Tenet Healthcare (THC), Viacom (VIA) and Westlake Chemical (WLK).