Bill Ackman renewed his short attack on Herbalife Ltd. (NYSE:HLF) today at the Robin Hood Investors Conference. While his presentation was closed to media, he later discussed it on Bloomberg TV. Most of what he said was old news, except for his snide remark at the age of Herbalife holders, “it is interesting that all people who are long Herbalife are 80 year old”. Now that says something about Kyle Bass who jumped aboard team Herbalife Ltd. (NYSE:HLF) in the last quarter.
More interesting hedge fund gurus are scheduled to speak today, including the activist Larry Robbins from Glenview Capital, Stanley Druckenmiller from Duqenese Family office, Paul Tudor Jones and Julian Robertson. Tiger cub John Griffin, who serves on the board of Robin Hood Foundation, will also share his best idea today.
Robin Hood Conference has all-star lineup
While we wait for more coverage of the event, it is a good time to look at what speakers from yesterday touted:
David Einhorn – Long Micron Technology
The co-founder of Greenlight Capital pitched long in Micron Technology, Inc. (NASDAQ:MU) at the conference. Later he told CNBC that his reason for being bullish on Micron is the consolidation of the DRAM industry, He said that Micron Technology has come up as one of three main players in the sector, the other two being Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) and SK Hynix Inc (KRX:000660). Einhorn sees a lot of potential upside in the stock even though the shares are already up 200% this year.
Interestingly, as Einhorn pitched a long in Micron, BAML downgraded the stock from Buy to Neutral today. Summit Research maintains a bullish rating on the company, seeing that demand will easily exceed supply in the next year. Susquehanna Financial Group raised the price target on Micron yesterday based on better than expected DRAM ASP trends.
Dan Loeb – Long Softbank
The aggressive activist known for writing stingy letters to company boards went long Softbank Corp (TYO:9984) (OTCMKTS:SFTBF) at the Robin Hood Conference yesterday. Loeb said he had built a $1 billion bet in the Japanese telecom and internet group, which amounts to a 1% position in the stock.
Loeb said that his long bet is meant to benefit from the large stake Softbank holds in Alibaba and Sprint Corporation (NYSE:S). The Japanese company owns a 36.7% stake in Alibaba, which would surely give the company a major boost when Alibaba debuts on the market after its IPO.
Nomura raised their target price to JPY 8,920 in a report released yesterday; the firm has a Buy rating on the stock. The raised PT was based on increased earnings forecasts at Sprint and raised profit forecasts for Alibaba Group Holdings. The report went on to say,
We still think that Softbank will leverage its strengths in communications networks, handset distribution, and content on a global stage, thereby enabling it to outperform the market in share price terms.
Richard Chilton – Long W.R. Grace
Richard Chilton presented long case on W.R. Grace & Co. (NYSE:GRA). Chilton said that he would not sell shares of W.R. Grace until the price hits $175-$200 – shares currently trade around $95. The company is Chilton’s top holding according to the public portfolio.
While speaking to Bloomberg, Chilton said that he expects the company to return a lot of cash to shareholders in the coming period. He also said that GRA can trade at 18x forward earnings which would give it a share price of $175. Chilton intends to stay in the holding for the long term.
Take a look at Chilton’s interview about W.R. Grace on Bloomberg TV.
Goldman Sachs rates W.R. Grace & Co. (NYSE:GRA) at Buy, and an analyst note released after GRA’s Q3 earnings call noted,
“GRA’s 3Q2013 earnings report alleviated many investor concerns that there was ‘another shoe to drop’ in refining catalysts as EBIT slightly exceeded expectations and management guided for sequential improvement. While investor focus in recent quarters has mostly been on refining catalysts, we think the strong outperformance in all other GRA divisions should not be overlooked.”
Meryl Witmer – Long Wyndham Worldwide
Meryl Witmer of Eagle Capital pitched long in Wyndham Worldwide Corporation (NYSE:WYN) at the conference. The company owns a chain of hotels and resorts and is a major player in the hospitality industry.
Witmer is a general partner at Eagle Capital and also serves on Berkshire Hathaway’s board. JPMorgan rates Wyndham at Overweight, and the analysts note that lodging is Wyndham’s strongest business. The company is also in the process of launching new yield management tools which will help it in European rental markets and will also allow it to move in new regions.
Anthony Bozza – Short Opko Health
Lakewood Capital’s Anthony Bozza presented his short thesis on Opko Health Inc.(NYSE:OPK) at the Robin Hood Conference. The company is involved in pharmaceutical research and also develops diagnostic tests. There was some misinformation on financial blogs and Twitter that the short was endorsed by David Einhorn, which is entirely incorrect. Einhorn merely introduced Bozza in his role as a moderator during the Lightning Round of the conference.
Bozza sees a 75-100% downside in Opko’s share price, meaning that he is implying a zero price target. Bozza said that Opko has become a little more than a day-trading vehicle these days. OPK dropped 10% in response to Bozza’s short call. Lakewood Capital did not do well in Q3; the fund suffered a 0.5% net loss in the quarter which was mostly caused due to detraction in the short portfolio. The short book generated a loss of -16% in Q3, according to a investor letter obtained by ValueWalk. Other short bets of Lakewood include Westport Innovations Inc. (NASDAQ:WPRT), InterOil Corporation (NYSE:IOC) and Fusion-IO, Inc. (NYSE:FIO).
Jefferies rates Opko Health at Buy, and the company reported a net loss in the last quarter attributable to one time non-cash charges from January 2013 convertible senior notes. Jefferies increased PT to $11.5 on November 15, based on a hemophilia drug which will begin Phase II clinical trials in 2014.
Steve Kuhn – Short Progressive Corp
The MBS guru Steve Kuhn pitched short in The Progressive Corporation (NYSE:PGR), an automobile insurance company. Interestingly, Kuhn had all good words to say about Progressive’s management. He said the management is very smart and runs the company well. The snag however is that Progressive is overvalued in the market. Kuhn said that the stock is trading at 18x of fair valuation and its business is in danger of becoming obsolete.
Kuhn’s short thesis was even more interesting – he said that automobile insurance would make less money in the future because cars will drive themselves in 2025. Even before this futuristic scenario is realized, cars will become dramatically safer which would reduce the