The annual gathering of the Ira Sohn Investment Conference took place earlier this week in the famed Lincoln Center in New York City. Unlike previous gatherings, this year saw the first of what was dubbed the New Wave Sohn -- a showcase of up-and-coming fund managers' investment ideas.
Following that, however, was the main draw -- the public investment presentations of some today's most vocal investors.
David Einhorn, who really made ripples back at the 2008 gathering when he recommended shorting Lehman Brothers, was at it again this year. He recommended a short of AthenaHealth (ATHN). The company is a technology stock that offers record keeping and other administrative services to doctors and hospitals. The company has a market cap of $4.1 billion, $800 million in net debt\ and no current earnings to speak of.
Einhorn emphasized that AthenaHealth is "well meaning" stock that he doesn't want to fail. But he said that it has just simply gotten caught up in the bubble with all the other high flying tech stocks surging today.
Einhorn noted that ATHN has been missing targets while the stock has continued to soar. As of now, ATHN still trades for over 80x forward earnings. Einhorn concluded by saying that the stock could fall by 80%, or more.
Bill Ackman, another regular fixture at Sohn, reiterated his bullish view on the common stock of Fannie Mae (FNMA) and Freddie Mac (FMCC). While members of Congress continue to advocate for a wind down of the two entities, Ackman believes that doing so with cause severe damage to the housing and mortgage market. That would be a fallout no politician can afford to risk.
Fannie and Freddie are "essential to preserving the housing market" according to Ackman. Never known to be bashful, Ackman man suggests Fannie and Freddie are worth $23 to $47 a share, up from $4 today.
A very interesting pick came from Jim Grant, author of Grant's Interest Rate Observer. Grant's recommendation was to go long Russian oil giant Gazprom which trades as an ADR in London under the symbol OGZD. "There's no more reviled business than Gazprom" commented Grant saying the company trades for less than 3x forward earnings.
Don't take these ideas as gospel; they are merely ideas from experienced investors who are not perfect. Indeed, last year Mr. Market has the last laugh. The average return of all the picks at last year's Sohn gathering was a negative 3.8% vs. a 15% rise in the S&P 500.