Previewing This Week's Value Investing Congress

On Monday morning, the 8th annual New York Value Investing Congress will kick off at the Marriott Marquis in Times Square. The event, which CNBC described as the "Super Bowl of Value Investing," has become well-known for its market moving presentations from some of the best investors in the world. Headlining this year's event are Pershing Square Capital Management's Bill Ackman and Greenlight's Capital's David Einhorn, two hedge fund managers that have previously made splashes at the Value Investing Congress. Other notable speakers include Barry Rosenstein of JANA Partners, and Whitney Tilson of T2 Partners, along with a host of other investors. The format for the event is for noted investors to give the audience a presentation on a long or short investment idea. Over the years, some very memorable (and profitable) ideas have been presented. Business Insider recently recapped some of last year's picks. David Einhorn, for example, gave a detailed presentation on why he was shorting Green Mountain Coffee Roasters GMCR. His thesis has proven to be spot on over the last year, as GMCR has fallen around 70 percent since his October 17, 2011 presentation at the Value Investing Congress. Although Einhorn is known as a value investor and his hedge fund owns a lot of seemingly "cheap" stocks such as Marvell Technology MRVL and Seagate Technology STX, he seems to prefer presenting short ideas at the annual conference. In 2007, his short pick was Lehman Brothers, which ended up being one of the all-time great trades in the hedge fund world and shot Einhorn to super-stardom. In 2010, the Greenlight manager detailed his short thesis on The St. Joe Company JOE, which is a major landholder and real estate developer in Florida. That stock fell very sharply in the days after Einhorn revealed he was short at the event. The stock has continued to fall over the last couple of years and closed Friday at $19.50. While it is pure speculation at this point, if Einhorn continues with his tradition of outlining short ideas, he could potentially focus on a number of different companies. There have been rumors that his hedge fund is shorting Herbalife HLF, Lululemon LULU and Qihoo 360 Technology QIHU. In his second-quarter letter to his limited partners in Greenlight, Einhorn wrote about an "undisclosed" short position that has been generating profits. Could it be one of these companies? At this point, there is little to substantiate the "Einhorn is short" rumors surrounding these stocks, but he could validate at least one of them at the Value Investing Congress. The other well-known hedge fund superstar that will be presenting at the event is Bill Ackman. Last year, Ackman pitched Fortune Brands Home & Security FBHS as a long idea. Subsequently, the stock has risen more than 87 percent since he outlined his thesis on the stock. In 2010, the Pershing Square founder elaborated on his massive stake in J.C. Penney JCP. That investment has been difficult for Pershing Square, with shares falling a little more than 9 percent over the last year versus a return for the S&P 500 of more than 27 percent. Given that Ackman likes to make fairly long-term bets on stocks where he thinks he can influence management, his long-equity portfolio is extremely concentrated. Pershing Square only owned 8 stocks at the end of the second-quarter. For this reason, it seems less likely that he will surprise the audience with an investment idea that he has not shared before. He will likely touch on his newest out-sized position in Proctor & Gamble PG, which makes up ~25 percent of Pershing Square's U.S. long equity portfolio and was valued at around $2 billion at the end of the second-quarter. Investors will also be interested in hearing more about Ackman's outlook for J.C. Penney, which he continues to tout, despite the stock's poor performance. While some of the lesser-known speakers at this year's event aren't likely to move the markets dramatically with their picks, do not be surprised if at least one development from the Value Investing Congress causes major volatility in a stock. The most likely candidate to trigger a major move in an individual name is Einhorn. In fact, if he uses his presentation to highlight a short position that his fund holds, but hasn't previously disclosed, it is a near-certainty that the stock will plunge. Furthermore, some names could be active if Einhorn doesn't mention them. His reputation for sniffing out short-selling opportunities is so well respected that stocks such as Herbalife and Lululemon could experience relief rallies if they aren't targeted by the Greenlight manager during the Value Investing Congress.