In the first part of the presentation, that was held during the International Value Investing Conference in Luxembourg, Alexander J. Roepers discusses the question: Is it now an excellent entry point for Value stocks?
Alexander J. Roepers: Is it time for Value now?
Alexander J. Roepers on his strategy and Owens-Illinois, Avnet and Atos
This is the second part of the presentation of Alexander J. Roepers held during the International Value Investing Conference 2018 in Luxembourg. In this talk he disusses his strategy and process and sheds light on some interesting stocks.
Q3 hedge fund letters, conference, scoops etc
Transcript
Good morning everybody. Thanks to Timco for inviting me back to this second annual conference. Pleasure to be here. Name is Alex whoopers from Atlantic investments. Also first of all thank you professor for giving this very interesting overview and tutorial. It's certainly very helpful maybe we should tour together you know be good to have you as you know to start everybody off with regard to the Against Malaria Foundation. I was very impressed with the work that's being done and Atlantic is pleased to donate 4000 euros at this conference for that call. So happy to do that. Great great efforts and very well organized so well done. What I'd like to do they've given me a full hour. I'm very honored with that is to walk you through a bunch of things.
First of all you can see my title. Excellent points for value stocks I'm trying to completely bottom take this correction that's going on. You might not think it's a big correction in the overall stock markets. There's been depressions bear markets and massive corrections in many many individual sectors and stocks all throughout the last eight or nine years and particularly in the last few years. And if you're in individual stock picker and you're looking for value you'll see that I will have five stories to talk about. All those companies are massively undervalued and have detracted from their highs by 30 40 50 percent and trading at all time low valuations in what is still supposedly a bull market the bull market is of course reflected by the index an index like the S&P 500 or the Nasdaq which are the big ones for the United States. Our market capitalization weighted indexes. That's a mouthful. That glass of wine after that but basically let's take Apple and Amazon about a trillion dollar market values each day are up quite a bit this year. They have a huge disproportionate impact. The companies we look at are between 1 and 20 billion dollars.
Average 6 or 7 billion. If all of them will go up on 2 percent you won't even notice it in the index. Whereas Apple or Amazon going up 10 20 percent has a massive impact on the index so you really got to understand what are the largest components of the index. How are they trading in terms of valuation. And then you determine are we in a bull market or not. And frankly you can always invest in the index Paju should really look at the underlying stocks and what's out there. So what I'd like to do today is a few things quick introduction about Atlantic. Talk about the equity market dynamics. You know this is the what's going on in the markets. What's driving the market is given the opportunity to talk about our investment process. Atlantic's approach to value investing. You know everybody has different ways of skinning the cat looking at different valuation metrics. We're very much indeed cash flow oriented sustainable predictable cash flows high barriers to entry et cetera so I'll walk you through all that and then we get into compelling current investments these are five stories. And last year I had a bunch of stories this year I've got stories we always have stories. These are highest conviction ideas at this moment. We'll tell you about what these companies do where to trading and what we think the Kallista are to unlock the value. So that's the idea. I started Atlantic in 1988 and originally Dutch grew up in the Netherlands. Did my name wrote a business degree got lucky to get accepted at Harvard Business School. Did my MBA in 1982 84 I work before that for a conglomerate publicly traded industrial conglomerate called Dover's corporation where I got involved in buying and selling industrial companies. From the kind of private equity perspective. After Harvard I got I was hired by Teson board and a group TVG a very large privately held conglomerate from Europe that at the time introduced quite large. About 3 4 billion dollars in size with 80 different companies and 40 different industries. I was in a New York office and involved in corporate development buying and selling companies there. From that experience I learned a few things about valuing companies about the process of buying and selling companies.
