A legion of Stanford MBAs descended on the ballroom of the Hyatt Regency in San Francisco on Monday for the ninth annual Sohn San Francisco Investment Conference, where their employers paid thousands of dollars a ticket for them to listen to a roster of A-list hedge fund managers share their latest big investment plays. As stocks erased most of their early gains in afternoon trading, the steady patter of calls failed to elicit the same boost to the company’s shares as is often seen at Sohn New York, a phenomenon that has been described by some as the “Sohn effect”. As one might expect given the location, tech plays were prominently featured in presentations, though one investor had the temerity to advise the audience to short tech as volatility climbs.
Bloomberg compiled a list of highlights from the event, which featured Gil Simon, CIO at SoMa Equity Partners, and Kevin Oram, co-founder of Praesidium Investment Management among the crowd of A-list speakers (see the full roster below):
- Mayor London N. Breed, Mayor of the City and County of San Francisco
- Alex Gleser, Portfolio Manager, TPG Public Equity Partners
- Glen Kacher, President and Chief Investment Officer, Light Street Capital
- Mick McGuire, Founder and Managing Partner, Marcato Capital Management
- Dan Morehead, Chief Executive Officer, Pantera Capital/Chairman, Bitstamp
- Kevin Oram, Co-Founder and Co-Portfolio Manager, Praesidium Investment Management Company, LLC
- Jeff Osher, CFA, Portfolio Manager, No Street Capital
- Andrew Parmentier, Partner, Chief Strategy Officer, and Head of Thematic Investing, Highland Capital Management, L.P.
- Michael McLochlin, Portfolio Manager, Highland Capital Management
- Shashin Shah, Founder and Portfolio Manager, Think Investments
- Jeff Shen, PhD, Managing Director, Co-CIO of Active Equity and Co-Head of Systematic Active Equity, BlackRock
- Gil Simon, Chief Investment Officer and Managing Partner, SoMa Equity Partners
- Vineer Bhansali, PhD, Founder and CIO, Long Tail Alpha
- Marcelo Desio, CFA, Portfolio Manager, Lucha Capital Management L.P.
- Daniel Kozlowski, Founder and CIO, Plaisance Capital, LLC
- Franklin Parlamis, Chief Investment Officer, Aequim Alternative Investments
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Here’s a quick rundown of the various calls:
Marcato Capital Management Founder Mick McGuire (CorePoint Lodging Inc. and Extended Stay America Inc.): McGuire expects to see price-to-earnings multiples expand for lodging and hospitality focused brands. They could also present attractive acquisition targets as a wave of consolidation in the hotel industry continues.
Praesidium Investment Management Co-Founder Kevin Oram (Cornerstone OnDemand Inc.): Oram is pushing both companies to improve corporate governance and overhaul sales practices, which he believes that, if successful, would help both companies draw interest from potential acquirers. Oram named Microsoft Corp., Oracle Corp. and Salesforce.com Inc. as possible suitors.
Lucha Capital Management Portfolio Manager Marcelo Desio (Talend SA): Continuing with the merger-arbitrage theme, Desio pitched the big data-focused software company as an attractive acquisition target that should benefit from increasing demand for data integration. He believes the stock could climb 80% by 2020.
Light Street Capital Management President Glen Kacher (Farfetch Ltd): Kacher believes the company is poised to benefit as luxury apparel buying migrates online. The stock may double over the next several years as margins rise and the total market expands.
Highland Capital Management Portfolio Manager Michael McLochlin (Marvell Technology): McLochlin said sales will likely expand faster than Wall Street expects, as will gross margins. Marvell’s return to strong secular growth could lead the stock to double in the next 12 months.
Think Investments Founder Shashin Shah (Radico Khaitan Ltd.): Shah believes Radico is well-positioned to benefit from rising alcoholic-beverage consumption in India as the country’s culture changes and the market for branded alcoholic beverages expands. Radico could even be an attractive acquisition target for a larger company that wants to enter the Indian market.
TPG Public Equity Partners Founder Alex Gleser (Royal Philips NV): Gleser believes Royal Philips is undervalued compared with peers and projections for margin expansion. He sees the stock rising 85% in the next two years.
Plaisance Capital Founder Daniel Kozlowski (Pure Cycle Corp.): The Denver-based utility could rise more than 10-fold in the next 10 to 15 years, Kozlowski believes.
SoMa Equity Partners’ Gil Simon (the New York Times): Simon touted the company’s evolution into a subscription Internet platform from an advertising dependent broadsheet newspaper. He projected the stock could double in the next two years as total subscribers rise and recurring revenue accounts for a larger share of total sales.
No Street Capital Portfolio Manager Jeff Osher (Trupanion Inc.): Osher recommended shorting the pet insurance company, which he said is in the first inning of a “rate spiral.” Osher criticized the company’s distribution model and said the stock could fall as much as 77%.
Longtail Alpha Founder Vineer Bhansali (short FAANG): Bhansali recommended avoiding technology stocks as market volatility could rise further, he said. Financial and small cap stocks with low leverage ratios would make good long plays as they’re poised to benefit as the yield curve steepens.
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After Simon’s presentation, he sat for an interview with CNBC’s Leslie Picker (herself a former Times employee), where he explained how the rising interest in political news and the NYT’s shift toward more stable subscription revenue would ultimately benefit its business model.
“Newspapers are mostly dead, but the news isn’t dead,” Gil Simon, SoMa’s founder and chief investment officer, said during an interview with CNBC’s Leslie Picker at the Sohn conference in San Francisco.
“What you’ve actually seen is a pretty significant evolution in the business model of news, and really, The New York Times is at the forefront of that.”
Watch that interview below:
Praesidium founder Kevin Oram explains his bet in the cloud software industry from CNBC.
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