Market Overview

Top Ideas From The 2018 Sohn Conference: Box, Bitcoin, Facebook, Palo Alto And More

Top Ideas From The 2018 Sohn Conference: Box, Bitcoin, Facebook, Palo Alto And More

The Ira Sohn Investment Conference moved multiple stocks Monday as the Street’s most prosperous and prescient investors proposed their best trades. Here’s what they had to say.

Oleg Nodelman

Ecor1 Capital’s managing director likes Ascendis Pharma A/S (NASDAQ: ASND) and its growth hormone deficiency drug. Nodelman said Ascendis could be targeted by 10 potential buyers, including Eli Lilly And Co (NYSE: LLY) and Pfizer Inc (NYSE: PFE).

John Khoury

The Long Pond Capital managing partner sees 60-percent upside in D.R. Horton Inc (NYSE: DHI), considering housing affordability and job growth offsetting interest-rate risks.

Li Ran

The Half Sky Capital CIO sees 60-percent upside in GrubHub Inc (NYSE: GRUB) for its large addressable market, positive unit economics and restaurant buy-in. While conceding strong competition in the category, Ran considers recent management decisions buffering rivalry risks.

Jeffrey Gundlach

DoubleLine’s CIO is short Facebook Inc. (NASDAQ: FB), noting potential regulations would be a big event. Reflecting on the firm’s recent data privacy scandals, he said “there’s never just one cockroach in the kitchen.”

"When I hear 2.2 billion users, I hear 2.2 billion compliance breaches,” Gundlach said.

Considering the energy sector has lagged, he is long SPDR S&P Oil & Gas Explore & Prod. (ETF) (NYSE: XOP).

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Chamath Palihapitiya

The founder and CEO of Social Capital said his firm “still believes” in Tesla Inc (NASDAQ: TSLA) and considers CEO Elon Musk a “Modern Edison.”

Palihapitiya is also long Box Inc (NYSE: BOX), which he called a “really interesting disruptive company” and his favorite way to play artificial intelligence. He anticipates 10-times upside in 10 years for Box’s stable core business, consistent revenue growth and market fit.

Glen Kacher

The Light Street Capital founder and CIO bolstered the ETF MANAGERS Tr/ETFMG PRIME CYBER S (NYSE: HACK) thesis by pondering the U.S.’s insufficient spending on cyber defense. Kacher said, in a worst case scenario, a cyber attack creating “systemic panic” could catalyze the next major financial crisis.

While merely mentioning FireEye Inc (NASDAQ: FEYE), he definitively said he is long Palo Alto Networks Inc (NYSE: PANW) for its improving fundamentals and business model, which yields four times the customer revenue of its competitors. He expects subscription growth and an expanding portfolio to drive 90 percent upside in two years with high-end potential of 164 percent.

Kacher was also said to have positively mentioned Wayfair Inc (NYSE: W) on the sidelines of the conference.

Seth Stephens-Davidowitz

Stephens-Davidowitz, a visiting lecturer at The Wharton School and New York Times op-ed contributor, asserted Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL)’s data is superior to that of Facebook’s.

John Pfeffer

The Pfeffer Capital founder said bitcoin is the first viable candidate to replace gold and remains a good bet despite its risk. Pfeffer put a $700,000 price target on the cryptocurrency.

Bill Gurley

Benchmark's general partner called Tesla too risky and too leveraged. Gurley is similarly bearish on Hertz Global Holdings Inc (NYSE: HTZ), which he said must confront a number of issues including a "systemic used car problem" and "massive" oversupply in the industry.

Larry Robbins

The CEO of Glenview Capital said he believes Express Scripts Holding Co (NADSAQ: ESRX), McKesson Corporation (NYSE: MCK) and CVS Health Corp (NYSE: CVS) will do well over the next 10 years, and, Inc. (NASDAQ: AMZN)'s entry into the pharmacy business is "not imminent."

David Einhorn

The founder and president of Greenlight Capital talked about a short idea in Assured Guaranty (NYSE: AGO), saying pre-tax income is likely to "collapse." He also highlighted Assured Guaranty insured $12.2 billion in below-investment grade bonds.

Foreign Trades

The following presenters proposed plays off the U.S. exchanges:

  • Scott Ferguson, managing partner of Sachem Head Capital, is long Whitbread plc;
  • Dylan Adelman is long Vostok New Ventures Ltd considering “enormous” growth runway in Russia’s online classifieds business; and
  • Alex Captain, managing partner and founder of Cat Rock Capital, called NV a market winner in Europe’s online food delivery.

Related Links:

Ira Sohn 2017 Conference: Everything You Need To Know

Sohn Strategy: Go Long The Shorts, Short The Longs


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