Alex Roepers is the Founder and CIO of Atlantic Investment Management, Inc., a 25-year-old global alternative investment firm founded by Alex Roepers in 1988. Atlantic, a $2 billion firm, aims to generate strong long-term performance through the creation of concentrated portfolios of the firm’s highest conviction, global equity ideas using a value-driven investment approach. Alex Roepers spoke today at the Capitalize For Kids Conference in Toronto and presented his favorite idea. Below are some (very) informal notes from Roepers who talks about Owens-Illinois Inc (NYSE:OI), Triumph Group Inc (NYSE:TGI) and

Also see: Jeff Smith Bullish On Yahoo, Darden, MeadWestvacoJamie Dinan Likes TWC As Merger Arb Idea; TAP As Event Driven IdeaGuy Gottfried Pitches Long Tree Island Steel At Capitalize For Kids and Lee Ainslie Pitches Long Qihoo 360 At Capitalize For Kids, Vanshap Likes Keck Seng, Fleetwood; BHR Capital Long GLNG, Frank Brosens Of Taconic Sees Value In JOSB, MW Saga, Jacob Doft Of Highline Explains The Bullish Case For ICE, Jeff Hales Of Alignvest Capital Bullish On Corby Spirit And Wine and Capitalize For Kids: Aaron Cowen Long BKW, LBTYA; Jody LaNasa Likes FIG, KODK

 

Alex Roepers

Atlantic Investment Management

 

Get in at 7-8x ev/ebit

Get out at 10-12x ev/ebit

12-24 month holding period

 

Constructive shareholder activism

Pushing an agenda –maintaining liquidity

 

Ideas:

Alex Roepers on Owens-Illinois Inc (NYSE:OI)

Glass bottle maker

Price target $45 (71% upside)

Un-economical to ship more than 300 miles away

It takes $200b to build a plant in the US

Own 90 buildings in the US

$13b replacement value

$3.25 in eps for 2015

Basis  14x 2015 eps

Has traded in an out of OI several times

 

Alex Roepers on Triumph Group Inc (NYSE:TGI)

Price target $100

Upside 62%

Basis 11x fy2016 EBIT

Self-help, operational improvements, share repurchase and M&A will lead to solid EPS growth

 

Alex Roepers on Harman International Industries Inc./DE/ (NYSE:HAR)

Price Target $141

Upside 46%

infotainment segment has a 24% global market share

Penetration rate is very high

Microsoft Corporation (NASDAQ:MSFT) and Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) should buy them

HAR has most of the large carmaker player

30% EPS CAGR, multi year growth phase triggering return to higher multiple

Basis 14x FY2016 EBIT

Could earn $7 in eps

Alex Roepers Pitches TGI, OI, And HAR As Long Ideas

Stephen Shapiro

Steven Shapiro sits on GoldenTree’s Executive Committee and is responsible for overseeing GoldenTree’s distressed investments and the firm’s investments in media and communications. In addition, Mr. Shapiro works closely with Mr. Tananbaum managing GoldenTree’s absolute return portfolios. Stephen Shapiro pitches CO OPERATIVE (OTCMKTS:COOBF)

GoldenTree Asset Management

Pitching CO OPERATIVE (OTCMKTS:COOBF), 7th largest bank in the UK based on deposits

thinks it can double from here

 

Book value .56x

They have done 2 rights offering in the past 2 year, raising significant capital

 

Concerns

25% of the b/s are correlated to the UK real estate market

Potential large pension liability

Payment protection insurance issue

 

Reduced non core assets by 1b pounds

The banks portion of the pension deficit is small

Now comfortable with payment protection issue

 

Significant franchise value

Co-op bank price at 2.60 pounds  (around rights offering)

 

Healthy well capitalized bank

Basel 3 compliant

Co-op is currently operating at much lower levels than peers

Liquidity ratio is high

 

Assumptions

2-3% growth

C/I Ratio drops from 96% to 62.5%

NIM increases from 158bps to 215bps

 

Random comments after his pitch

 

People are chasing yield, seeing a lot of similar behavior to 2007/2008

Could see 4% 10 year yield in a couple years

Would not short the 10 year here

 

John Thiessen

Mr. John Thiessen is a founding partner and director of Vertex One Asset Management. Mr. Thiessen has overall responsibility for the investment and trading decisions affecting the Vertex Fund and Vertex Growth Fund. John Thiessen pitches Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) (LON:RBS).

Vertex One Asset Management

Active/Unconstrained/Opportunistic/Absolute — The Negative Optimist

$2.2B AUM

looking for a catalyst/event over next 12 months

 

Focus on per share metrics

 

He will not investment with management teams that wear Rolex watches and cuff links!!  tell tell sign that they will not be careful of spending

listen to what management says about their competitors, if they ever talk positive about another company, you should listen carefully… typically they don’t like other companies

 

Short a basket of levered ETF’s — these are TERRIBLE long vehicles

VelocityShares 3X Long Natural Gas ETN linked to the S&P GSCI Natural Gas Index Excess Return (NYSEARCA:UGAZ), Credit Suisse AG – VelocityShares Daily 2x VIX Short Term ETN (NASDAQ:TVIX), Hori. Beta. NYMEX Nat. Gas Bl. Pl. (ETF) (TSE:HNU), ProShares Trust II (NYSEARCA:KOLD), VelocityShares 3X Inverse Natural Gas ETN linked to the S&P GSCI Natural Gas INdex Excess Return (NYSEARCA:DGAZ)

Hedge with ProShares UltraShort Silver (ETF) (NYSEARCA:ZSL), Arian Silver Corp (LON:AGQ)

 

Best idea: Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) (LON:RBS)

Trades at .67x book

 

Current M&A opportunities

Athlon Energy Inc (NYSE:ATHL), getting acquired Encana Corporation (NYSE:ECA), 17% return potential

CareFusion Corporation (NYSE:CFN), getting acquired by Becton, Dickinson and Co. (NYSE:BDX), 8% return potential