Whitney Tilson is the Founder and Portfolio Manager of Kase Capital, a value-oriented hedge fund. He is the Chairman of Value Investor Insight and the co-author of The Art of Value Investing. He is co-founder and Chairman Emeritus of the Value Investing Congress.
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Whitney Tilson spoke at the 9th Annual Value Investing Congress, also see Whitney Tilson shorts montage technology, NQ Mobile Inc (ADR) (NYSE:NQ). Below are notes from his presentation.
Editors note: We earlier reported that Tilson would be announcing that he was long SODA and short ONVO at VIC. There is a media embargo which just ended. However, since this information was obtained through a reader, we posted it before the embargo ended. Readers can find the presentation here.
Highlights from Whitney Tilson’s presentation
Long Idea: Sodastream International Ltd (NASDAQ:SODA)
Beaten down with high short interest
Its not a fad
Bought 4% position at $37.65
Issue: deceleration in U.S. sales growth but it was 16% last year which is good
Gross margin dropped as they discounted heavily in Q4 to make money on consumables and tough market
Large global market
2% of sparkling water
7 million installed base and 4.4 million in 2013 alone
Healthy balance sheet
In Switzerland 25% margin; in US it’s only 5%
As consumables business grows in US that will change
Has a moat. Global manufacturing
Stock $43, market cap, $923M, EV $900M, EPS $2
Not cheap on PE and EV to EBITDA
Western Europe business alone worth $35 or more
Co2 consumables business alone worth market cap, so you’re getting the rest of the business for free
Does not see Ko Keurig as being successful as higher likely prices for their machines – what’s the value add over a can of coke?