Chris Shumway Goes Long Moody's, Shares Tick Higher
Shares of Moody's (NYSE: MCO) jump following comments from Chris Shumway at the Ira Sohn Conference.
The founder and managing partner of Shumway Capital Partners LLC, Shumway was recognized as a Top 10 performing manager by Barron's Magazine. He is a board member of the McIntire School of Commerce Foundation and the Connecticut Coalition for Achievement Now. Prior to founding his firm in 2002, Shumway was Senior Managing Director and Management Committee member at Tiger Management. Shumway received an M.B.A. from Harvard Business School and a B.S. from the McIntire School of Commerce at the University of Virginia.
Shumway's presented the “Hammered Index” at the Ira Sohn Conference, of the worst-performing stocks this year. He emphasized that the biggest issue investors currently face is China. Shumway said that he is fearful of the slowing GDP in the country as China lacks the tools to cope with slowing growth. He focused on a cheaper currency to allow the Chinese government to bolster growth and avoid problems in the banking sector.
Near the end of his presentation, Shumway said to go long on Moody's. With an 81 percent return on capital and over 100 years of five percent pricing power, Moody's is “a great business […] which possesses a strong moat.”
He said that the company is a 10 to 13 percent revenue grower and sees long-term growth of 19 to 22 percent per year.
Shares of Moody's closed at $78.58 on Friday. Following Shumway's comments, the stock jumped approximately 1.5 percent. Shares are currently trading at $79.60, up approximately 1.30 percent.
The Ira Sohn Investment Conference supports initiatives to raise funds for the treatment of pediatric cancers. he conference gives hedge fund managers the opportunity to share investment ideas and stock picks. Speakers at the Sohn Conference this year include Michael Novogratz, Chris Shumway, Jeffrey Gundlach, Philippe Laffont, Larry Robbins, Bill Ackman, Joel Greenblatt and David Einhorn.
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