Jason Karp – Tourbillion Capital Partners – long on SunOpta On Millenials

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ValueWalk is at the NYSSA  Annual Ben Graham Conference today. Below are notes from the speakers. Check back as we will have a lot more in the coming hours. These notes are from one of our favorite hedge fund managers: Jason Karp – Tourbillion Capital Partners on his best ideas he pitched a long thesis for SunOpta

Rupal Bhansali – informal notes  from his pitch at the Annual Ben Graham Conference below

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Millennials - more health conscious and less concerned about price; more quality conscious and less brand conscious

-peak spending is between ages of 40-50 and in fifteen years peak spending;
-organic is 12% growth over last ten years; expect share of natural and organic to go up dramatically; rise of in home and carried from home;
-huge shift from generic to private label but quality has gone up
-pitching long on SunOpta (STKL); largest source of organic ingredients; they make private lable organic products;
-13 D filer and oak tree took 11% stake in the company;  massive insider buying
-at nadir they were doing .5 billion of revenue on 1% margin versus competitors at 8% margin;
-expect market to grow 3x
-expects ebitda to double; incremental margin is 25%;
-expects to go from $80mm in ebitda in 2017 to 200mm in ebitda in 2020
-50% of shares locked up

Annual Ben Graham Conference- other speakers

Thomas Russo
-like family controlled b/c sometimes trade at discount and usually family controlled companies generate lots of cash which allows families to hang onto them

-you need to avoid agency costs among the management;

Chris Davis
- a good farmer farms for his children; sometimes long term vision
-Investing is the art of the specific...nav gap is not necessarily good if there are major problems

Aswath Damodaran - Professor of Finance at NYU

-Valuation is not a science but a craft; you learn valuation by doing but not by reading about it in books;
-85% of all intangible assets is goodwill which is a plug asset;
-balance sheet records the past and very rule driven but a valuation mindset is forward looking
-we can't think about value as assets in place
-simple way to check valuation is to see if assumptions of growth, risk, and reinvestment make sense
-need to separate words price and value; value is cash flows, growth, and risk; price is supply and demand and who knows what that is; we need to stop using the two terms interchangeably
-you need faith that price will reflect your value; proof means you can't prove it

Annual Ben Graham Conference  Ben Graham

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