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, MeadWestvaco, Jamie Dinan Likes TWC As Merger Arb Idea; TAP As Event Driven Idea, Guy 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
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
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
