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Morgan Stanley Investment Leadership Conference – Lancaster Short Idea

Notes from the Morgan Stanley Investment Leadership Conference which took place on the 28th of June, 2018. There was a killer line up and we have notes on the full conference stay tuned for more – below is the panel consisting of Simon Hillary of Lancaster Investment Management.

The full list of speakers as follows

List of Speakers

  • David Craigen, Partner at Lansdowne Partners
  • Joshua David Samuelson, Vice Chairman at PointState Capital
  • Robert S. Pitts, Limited Partner at Steadfast Capital Management
  • Keith Meister, Corvex Management
  • Parag Vora, HG Vora Capital Management
  • Richard McGuire, Marcato Capital Management
  • Nitin Saigal, Kora Management
  • Vikram Kumar, Kuvari Partners
  • Vivian Lau, One Tusk Investment Partners
  • Jasjit Rekhi, Sandro Capital
  • Brad Gerstner, Altimeter Capital Management
  • Nathaniel August, Mangrove Partners
  • Alex Gleser, TPG Public Equity Partners
  • Simon Hillary, Lancaster Investment Management
  • Seth Rosen, Nitorum Capital
  • David Rosen, Rubric Capital Management
  • Josh Clark, Southpoint Capital Management
  • David Thomas, Atalan Capital Partners
  • Tomoko Fortune, Criterion Capital Management
  • Dennis Puri, Hunt Lane Capital
  • Gil Simon, SoMa Equity Partners
  • Christian Leone, Luxor Capital
  • Leon Shaulov, Maplelane Capital
  • Munib Islam, Third Point

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Morgan Stanley Investment Leadership Conference - Lancaster

The panelists for discussion 5 were as follows:

  • Simon Hillary, Lancaster Investment Management
  • Seth Rosen, Nitorum Capital
  • David Rosen, Rubric Capital Management
  • Josh Clark, Southpoint Capital Management

Lancaster suggests an M&A driven portfolio:

Lancaster recommends buying stock of Bayer, based on Bayer’s recent acquisition of Monsanto. The combined business of seeds and trade offers good potential in the future.

Lancaster instead suggests selling the stock of Evoqua Water Technologies, manufacturer of water and wastewater treatment systems, with $2.5 billion market capitalisation. The company has not earned any cash since 2014 and the management is using policies to manipulate the information. The company is declining, when the management has reported growth and the margins have increased to 16-17% compared to 8% in the past.

Another recommendation of Lancaster is to long the stock of Avaya. The company is expected to grow after it has shed its declining handset business. Avaya has recently been relisted after emerging healthier after a bankruptcy. The earnings per share is $4 and it is trading at 4-5 times of the EPS.

Read the full article here.